0001558370-23-008172 | 10-Q | XBRL Viewer

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Document and Entity Information - shares	3 Months Ended
Document and Entity Information - shares	Mar. 31, 2023	May 03, 2023
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Mar. 31, 2023
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		13,489,111
Current Fiscal Year End Date	--12-29
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2023
Entity Central Index Key	0001370450
Amendment Flag	false

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 30, 2022
Current assets:
Cash and cash equivalents	$ 17,853	$ 8,806
Restricted cash		10,679
Accounts receivable, net of allowance for doubtful accounts of $336 and $640 at March 31, 2023 and December 30, 2022, respectively	51,917	60,202
Contract assets	75,241	83,060
Other receivables	4,782	4,773
Prepaid expenses and other current assets	5,431	6,454
Total current assets	155,224	173,974
Equipment and leasehold improvements, net	24,495	22,537
Goodwill	130,124	130,124
Right-of-use assets	12,750	12,390
Other intangible assets, net	38,861	41,486
Other assets	14,152	10,620
Deferred income taxes, net	17,761	18,543
Total assets	393,367	409,674
Current liabilities:
Accounts payable	29,312	28,833
Accrued liabilities	40,548	59,110
Contingent consideration payable	4,000	4,000
Contract liabilities	15,526	12,585
Notes payable	16,436	16,903
Finance lease obligations	1,105	1,113
Lease liability	4,435	4,625
Total current liabilities	111,362	127,169
Notes payable	85,361	90,544
Finance lease obligations, less current portion	1,354	1,601
Lease liability, less current portion	9,796	8,599
Other noncurrent liabilities	259	259
Total liabilities	208,132	228,172
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; 13,489 and 13,296 shares issued and outstanding at March 31, 2023 and December 30, 2022, respectively	135	133
Additional paid-in capital	180,517	177,718
Retained earnings	4,583	3,651
Total stockholders' equity	185,235	181,502
Total liabilities and stockholders' equity	$ 393,367	$ 409,674

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 30, 2022
Accounts receivable, allowance for doubtful accounts
Accounts receivable, allowance for doubtful accounts	$ 336	$ 640
Preferred stock
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized (in shares)	10,000,000	10,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	40,000,000	40,000,000
Common stock, shares issued (in shares)	13,489,000	13,296,000
Common stock, shares outstanding (in shares)	13,489,000	13,296,000

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2023	Apr. 01, 2022
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Contract revenue	$ 102,603	$ 91,838
Direct costs of contract revenue (inclusive of directly related depreciation and amortization):
Salaries and wages	20,410	18,810
Subcontractor services and other direct costs	40,912	41,668
Total direct costs of contract revenue	61,322	60,478
General and administrative expenses:
Salaries and wages, payroll taxes and employee benefits	22,385	19,357
Facilities and facility related	2,278	2,398
Stock-based compensation	1,533	3,305
Depreciation and amortization	4,200	4,409
Other	6,871	7,499
Total general and administrative expenses	37,267	36,968
Income (Loss) from operations	4,014	(5,608)
Other income (expense):
Interest expense, net	(2,466)	(751)
Other, net	140	197
Total other expense, net	(2,326)	(554)
Income (Loss) before income taxes	1,688	(6,162)
Income tax (benefit) expense	756	(2,389)
Net income (loss)	932	(3,773)
Other comprehensive income (loss):
Net unrealized income (loss) on derivative contracts		38
Comprehensive income (loss)	$ 932	$ (3,735)
Earnings (loss) per share:
Basic (in dollars per share)	$ 0.07	$ (0.30)
Diluted (in dollars per share)	$ 0.07	$ (0.30)
Weighted-average shares outstanding:
Basic (in shares)	13,266	12,786
Diluted (in shares)	13,470	12,786

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands	Common Stock	Additional Paid-in Capital	Accumulated Other Comprehensive Income (Loss)	Retained Earnings	Total
Balance at Dec. 31, 2021	$ 128	$ 167,032	$ (38)	$ 12,099	$ 179,221
Balance (in shares) at Dec. 31, 2021	12,804
Increase (Decrease) in Stockholders' Equity
Shares of common stock issued in connection with employee stock purchase plan	$ 1	1,560			1,561
Shares of common stock issued in connection with employee stock purchase plan (in shares)	52
Shares of common stock issued in connection with incentive stock plan		23			23
Shares of common stock issued in connection with incentive stock plan (in shares)	4
Shares used to pay taxes on stock grants		(837)			(837)
Shares used to pay taxes on stock grants (in shares)	(27)
Issuance of restricted stock award and units	$ 3	(3)
Issuance of restricted stock award and units (in shares)	373
Stock-based compensation expense		3,305			3,305
Net income (loss)				(3,773)	(3,773)
Net unrealized gain (loss) on derivative contracts			$ 38		38
Balance at Apr. 01, 2022	$ 132	171,080		8,326	179,538
Balance (in shares) at Apr. 01, 2022	13,206
Balance at Dec. 30, 2022	$ 133	177,718		3,651	$ 181,502
Balance (in shares) at Dec. 30, 2022	13,296				13,296
Increase (Decrease) in Stockholders' Equity
Shares of common stock issued in connection with employee stock purchase plan	$ 1	1,391			$ 1,392
Shares of common stock issued in connection with employee stock purchase plan (in shares)	92
Shares used to pay taxes on stock grants		(124)			(124)
Shares used to pay taxes on stock grants (in shares)	(7)
Issuance of restricted stock award and units	$ 1	(1)
Issuance of restricted stock award and units (in shares)	108
Stock-based compensation expense		1,533			1,533
Net income (loss)				932	932
Balance at Mar. 31, 2023	$ 135	$ 180,517		$ 4,583	$ 185,235
Balance (in shares) at Mar. 31, 2023	13,489				13,489

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Apr. 01, 2022
Cash flows from operating activities:
Net income (loss)	$ 932	$ (3,773)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization	4,200	4,409
Deferred income taxes, net	782	(973)
(Gain) loss on sale/disposal of equipment	(10)	(36)
Provision for doubtful accounts	81	64
Stock-based compensation	1,533	3,305
Accretion and fair value adjustments of contingent consideration		80
Changes in operating assets and liabilities, net of effects from business acquisitions:
Accounts receivable	8,204	17,670
Contract assets	7,819	104
Other receivables	(9)	(1,505)
Prepaid expenses and other current assets	1,108	253
Other assets	(3,532)	437
Accounts payable	479	(16,778)
Accrued liabilities	(7,883)	(8,488)
Contract liabilities	2,941	(2,431)
Right-of-use assets	647	(92)
Net cash (used in) provided by operating activities	17,292	(7,754)
Cash flows from investing activities:
Purchase of equipment, software, and leasehold improvements	(3,488)	(2,103)
Proceeds from sale of equipment	13	39
Net cash (used in) provided by investing activities	(3,475)	(2,064)
Cash flows from financing activities:
Payments on contingent consideration		(10,206)
Payment on restricted cash	(10,679)
Payments on notes payable	(485)	(701)
Borrowings under term loan facility and line of credit		20,000
Repayments under term loan facility and line of credit	(5,250)	(3,250)
Principal payments on finance leases	(303)	(342)
Proceeds from stock option exercise		23
Proceeds from sales of common stock under employee stock purchase plan	1,392	1,561
Cash used to pay taxes on stock grants	(124)	(837)
Net cash (used in) provided by financing activities	(15,449)	6,248
Net increase (decrease) in cash, cash equivalents and restricted cash	(1,632)	(3,570)
Cash, cash equivalents and restricted cash at beginning of period	19,485	11,221
Cash, cash equivalents and restricted cash at end of period	17,853	7,651
Cash paid (received) during the period for:
Interest	2,424	699
Income taxes	(77)	446
Supplemental disclosures of noncash investing and financing activities:
(Gain) loss on cash flow hedge valuations, net of tax		38
Equipment acquired under finance leases	$ 48	$ 1,048

ORGANIZATION AND OPERATIONS OF THE COMPANY

3 Months Ended

Mar. 31, 2023

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 resource and infrastructure needs undergo continuous change, the Company helps organizations and their communities evolve and thrive by providing a wide range of technical services for energy solutions, greenhouse gas reduction, 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 for our clients.

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 30, 2022. 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 30, 2022. 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 June 30, September 30, and December 31 and the 13 or 14-week period ending on the Friday closest to March 31, as applicable. Fiscal year 2023, which ends on December 29, 2023, will be comprised of 52 weeks, with all quarters consisting of 13 weeks each. Fiscal year 2022, which ended on December 30, 2022, was comprised of 52 weeks, with all quarters consisting of 13 weeks each. 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 assets and liabilities at the date of the consolidated financial statements. Estimates also affect the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

RECENT ACCOUNTING PRONOUNCEMENTS

3 Months Ended

Mar. 31, 2023

RECENT ACCOUNTING PRONOUNCEMENTS

RECENT ACCOUNTING PRONOUNCEMENTS

2. RECENT ACCOUNTING PRONOUNCEMENTS

As of March 31, 2023, there were no accounting pronouncements recently issued, or with future effective dates, that are either applicable nor are expected to have an impact to the Company’s 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

3 Months Ended

Mar. 31, 2023

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 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. The Company also 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.

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 March 31, 2023 and December 30, 2022, contract assets included retainage of approximately $10.3 million and $8.5 million, respectively.

- 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.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-URI https://asc.fasb.org/topic&trid=49130388

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
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-Paragraph 10
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+ Details

SUPPLEMENTAL FINANCIAL STATEMENT DATA

3 Months Ended

Mar. 31, 2023

SUPPLEMENTAL FINANCIAL STATEMENT DATA

SUPPLEMENTAL FINANCIAL STATEMENT DATA

4. SUPPLEMENTAL FINANCIAL STATEMENT DATA

Restricted Cash

The following table provides a reconciliation of cash and cash equivalents, and restricted cash reported within the condensed consolidated balance sheets to the total cash, cash equivalents, and restricted cash shown in the consolidated statements of cash flows:


	March 31,		December 30,
	2023		2022
	(in thousands)
Cash and cash equivalents	$	17,853	$	8,806
Restricted cash		—		10,679
Total cash, cash equivalents, and restricted cash shown in the consolidated statement of cash flows	$	17,853	$	19,485

Under certain utility contracts, the Company periodically receives cash deposits to be held in trust for the payment of energy incentive rebates to be sent directly to the utility’s end-customer on behalf of the utility. The Company acts solely as the utility’s agent to distribute these funds to the end-customer and, accordingly, the Company classifies these contractually restricted funds as restricted cash. Because these funds are held in trust for pass through to the utility’s customers and have no impact on the Company’s working capital or operating cash flows, these cash receipts are presented in the consolidated statement of cash flows as financing cash inflows, “Receipt of restricted cash”, with the subsequent payments classified as financing cash outflows, “Payment of restricted cash.”

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 three months ended March 31, 2023 and April 1, 2022, the Company did not sell any trade accounts receivable.

Equipment and Leasehold Improvements


	March 31,		December 30,
	2023		2022
	(in thousands)
Furniture and fixtures	$	4,176	$	4,062
Computer hardware and software		38,172		35,635
Leasehold improvements		3,832		3,097
Equipment under finance leases		5,434		5,503
Automobiles, trucks, and field equipment		3,199		3,134
Subtotal		54,813		51,431
Accumulated depreciation and amortization		(30,318)		(28,894)
Equipment and leasehold improvements, net	$	24,495	$	22,537

Included in accumulated depreciation and amortization is $0.3 million and $1.1 million of amortization expense related to equipment held under finance leases for the three months ended March 31, 2023 and for fiscal year 2022, respectively.

Accrued Liabilities


	March 31,		December 30,
	2023		2022
	(in thousands)
Accrued subcontractor costs	$	20,456	$	28,374
Accrued bonuses		9,720		8,470
Employee withholdings		3,664		2,571
Compensation and payroll taxes		3,540		2,340
Rebate and other		768		14,643
Accrued accounting and taxes		2,400		2,712
Total accrued liabilities	$	40,548	$	59,110

Goodwill


	December 30,		Additional		Additions /		March 31,
	2022		Purchase Cost		Adjustments		2023
	(in thousands)
Reporting Unit:
Energy	$	129,375	$	—	$	—	$	129,375
Engineering and Consulting		749		—		—		749
	$	130,124	$	—	$	—	$	130,124

The Company tests its goodwill at least annually for possible impairment. The Company completes its annual testing of goodwill as of the last day of the first month of its fourth fiscal quarter each year to determine whether there is a potential impairment. In addition to the Company’s annual test, it regularly evaluates whether events and circumstances have occurred that may indicate a potential impairment of goodwill. During the quarter ended March 31, 2023, although the Company experienced declines in the market price of its stock, such decreases did not result in the Company’s market capitalization decreasing below book value. The Company evaluated the current economic environment and noted that it does not believe it is more likely than not that goodwill was impaired as of March 31, 2023.

Intangible Assets


	March 31, 2023				December 30, 2022
	Gross		Accumulated		Gross		Accumulated		Amortization
	Amount		Amortization		Amount		Amortization		Period
	(in thousands)								(in years)
Finite:
Tradename	$	15,911	$	11,488	$	15,911	$	10,990	2.5	-	6.0
Developed technology		15,810		12,602		15,810		11,871	8.0
Customer relationships		58,149		26,919		58,149		25,523	5.0	-	8.0
Total intangible assets	$	89,870	$	51,009	$	89,870	$	48,384

DEBT OBLIGATIONS

3 Months Ended

Mar. 31, 2023

DEBT OBLIGATIONS

DEBT OBLIGATIONS

5. DEBT OBLIGATIONS

Debt obligations, excluding obligations under finance leases (see Note 6, Leases, below), consisted of the following:


	March 31,		December 30,
	2023		2022
	(in thousands)
Outstanding borrowings on Term A Loan	$	62,500	$	65,000
Outstanding borrowings on Revolving Credit Facility		—		—
Outstanding borrowings on Delayed Draw Term Loan		38,250		41,000
Other debt agreements		1,473		1,958
Total debt		102,223		107,958
Issuance costs and debt discounts		(426)		(511)
Subtotal		101,797		107,447
Less current portion of long-term debt		16,436		16,903
Long-term debt portion	$	85,361	$	90,544

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, the Second Amendment, dated as of November 6, 2019, the Third Amendment, dated as of May 6, 2020, the Fourth Amendment, dated April 30, 2021, the Fifth Amendment, dated March 8, 2022, the Sixth Amendment, dated August 2, 2022, and the Seventh Amendment, dated November 1, 2022, the “Credit Agreement”) with a syndicate of financial institutions as lenders and BMO Harris Bank, N.A., as administrative agent (the “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.

Pursuant to the terms of the Seventh Amendment to the Credit Agreement (the “Seventh Amendment”), among other things, (A) aggregate borrowings under the Revolving Credit Facility were restricted to no more than $10.0 million at any time during the period from November 1, 2022 through the date on which financial statements and compliance documents were received by the Administrative Agent for the fiscal quarter ending March 31, 2023, and (B) access to the accordion feature of the Credit Agreement was limited to periods when the Company’s Total Leverage Ratio (as defined in the Credit Agreement) was less than 3.0.

The Credit Agreement requires the Company to comply with certain financial covenants, including a Total Leverage Ratio and a Fixed Charge Coverage Ratio (as defined in the Credit Agreement). The Credit Agreement also contains customary events of default and contains other customary restrictive covenants.

As of March 31, 2023, the Company was in compliance with all covenants contained in the Credit Agreement.

Other Debt Agreements

The Company’s other debt agreements are related to financed insurance premiums, a financed software agreement, and a utility customer agreement and are immaterial to the Company’s Condensed Consolidated Financial Statements.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

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+ Details

LEASES

3 Months Ended

Mar. 31, 2023

LEASES

LEASES

6. 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 2027.

From time to time, the Company enters into non-cancelable leases for some of its 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 typically 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 the Company is typically liable to the lessor for the remaining lease payments under the term of the lease. Additionally, all of the Company’s month-to-month leases are cancelable by the Company or the lessor, at any time, and are not included in the Company’s right-of-use asset or lease liability. As of March 31, 2023, 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. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that it 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 Company’s lease expense:


	Three Months Ended
	March 31,		April 1,
	2023		2022
	(in thousands)
Operating lease cost	$	1,493	$	1,578
Finance lease cost:
Amortization of assets		311		233
Interest on lease liabilities		22		14
Total net lease cost	$	1,826	$	1,825

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


	March 31,			December 30,
	2023			2022
	(in thousands)
Operating leases:
Right-of-use assets	$	12,750		$	12,390

Lease liability	$	4,435		$	4,625
Lease liability, less current portion		9,796			8,599
Total lease liabilities	$	14,231		$	13,224

Finance leases (included in equipment and leasehold improvements, net):
Equipment and leasehold improvements, net	$	5,434		$	5,503
Accumulated depreciation		(3,024)			(2,830)
Total equipment and leasehold improvements, net	$	2,410		$	2,673

Finance lease obligations	$	1,105		$	1,113
Finance lease obligations, less current portion		1,354			1,601
Total finance lease obligations	$	2,459		$	2,714

Weighted average remaining lease term (in years):
Operating Leases		3.52			3.35
Finance Leases		2.48			2.66

Weighted average discount rate:
Operating Leases		5.10	%		4.25	%
Finance Leases		3.59	%		3.47	%

Rent expense was $1.6 million for the three months ended March 31, 2023 and April 1, 2022, respectively.

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


	Three Months Ended
	March 31,		April 1,
	2023		2022
	(in thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flow from operating leases	$	1,570	$	1,670
Operating cash flow from finance leases		22		14
Financing cash flow from finance leases		303		342

Right-of-use assets obtained in exchange for lease liabilities:
Operating leases	$	2,120	$	525

The following is a summary of the maturities of lease liabilities as of March 31, 2023:


	Operating		Finance
	(in thousands)
Fiscal year:
Remainder of 2023	$	3,691	$	949
2024		4,233		997
2025		3,410		399
2026		2,877		172
2027		1,050		58
2028 and thereafter		461		—
Total lease payments		15,722		2,575
Less: Imputed interest		(1,491)		(116)
Total lease obligations		14,231		2,459
Less: Current obligations		4,435		1,105
Noncurrent lease obligations	$	9,796	$	1,354

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

3 Months Ended

Mar. 31, 2023

COMMITMENTS AND VARIABLE INTEREST ENTITIES

COMMITMENTS AND VARIABLE INTEREST ENTITIES

7. 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’s defined contribution plan (the “Plan”) covers employees who have completed three months of service and who have attained 21 years of age. The Company elects to make matching contributions equal to 50% of the participants’ contributions to the Plan, up to 6% of the individual participant’s compensation, and subject to a maximum of $3,000 per employee. Under the Plan, the Company may make discretionary matching contributions to employee accounts.

During the three months ended March 31, 2023 and April 1, 2022, the Company made matching contributions of $1.0 million.

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 March 31, 2023, the Company had one VIE — Genesys.

SEGMENT AND GEOGRAPHICAL INFORMATION

3 Months Ended

Mar. 31, 2023

SEGMENT AND GEOGRAPHICAL INFORMATION

SEGMENT AND GEOGRAPHICAL INFORMATION

8. 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 months ended March 31, 2023 and April 1, 2022. 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 and reconciliation to the amounts reported in the Company’s Condensed Consolidated Financial Statements is as follows:


			Engineering		Unallocated				Consolidated
	Energy		& Consulting		Corporate		Intersegment		Total
	(in thousands)
Fiscal Three Months Ended March 31, 2023
Contract revenue	$	83,285	$	19,318	$	-	$	-	$	102,603
Depreciation and amortization		3,924		276		-		-		4,200
Interest expense, net		2		-		2,464		-		2,466
Segment profit (loss) before income tax expense		2,771		2,587		(3,670)		-		1,688
Income tax expense (benefit)		1,241		1,158		(1,643)		-		756
Net income (loss)		1,530		1,428		(2,026)		-		932
Segment assets ⁽¹⁾		323,578		23,587		69,332		(23,130)		393,367
Fiscal Three Months Ended April 1, 2022
Contract revenue	$	74,886	$	16,952	$	-	$	-	$	91,838
Depreciation and amortization		4,157		252		-		-		4,409
Interest expense, net		4		-		747		-		751
Segment profit (loss) before income tax expense		(4,353)		2,107		(3,916)		-		(6,162)
Income tax expense (benefit)		(1,687)		817		(1,519)		-		(2,389)
Net income (loss)		(2,665)		1,290		(2,398)		-		(3,773)
Segment assets ⁽¹⁾		336,957		22,979		35,931		(23,130)		372,737

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

The following tables provide information about disaggregated revenue by contract type, client type and geographical region:


	Three months ended March 31, 2023
	Energy		Engineering and Consulting		Total
	(in thousands)
Contract Type
Time-and-materials	$	7,709	$	14,554	$	22,263
Unit-based		44,927		3,616		48,543
Fixed price		30,649		1,148		31,797
Total⁽¹⁾	$	83,285	$	19,318	$	102,603

Client Type
Commercial	$	6,719	$	1,164	$	7,883
Government		26,075		18,095		44,170
Utilities⁽²⁾		50,491		59		50,550
Total⁽¹⁾	$	83,285	$	19,318	$	102,603

Geography ⁽³⁾
Domestic	$	83,285	$	19,318	$	102,603


	Three months ended April 1, 2022
	Energy		Engineering and Consulting		Total
	(in thousands)
Contract Type
Time-and-materials	$	8,818	$	13,001	$	21,819
Unit-based		42,957		2,984		45,941
Fixed price		23,110		968		24,078
Total ⁽¹⁾	$	74,886	$	16,952	$	91,838

Client Type
Commercial	$	8,089	$	1,478	$	9,567
Government		18,359		15,453		33,812
Utilities ⁽²⁾		48,437		21		48,458
Total ⁽¹⁾	$	74,886	$	16,952	$	91,838

Geography ⁽³⁾
Domestic	$	74,886	$	16,952	$	91,838

(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 not material for the three months ended March 31, 2023 and April 1, 2022.

Geographical Information

Substantially all of the Company’s consolidated revenue was derived from its operations in the U.S. The Company operates through a network of offices spread across 22 U.S. states, the District of Columbia, and Canada. Revenues from the Company’s Canadian operations were not material for the three months ended March 31, 2023 nor the three months ended April 1, 2022.

Customer Concentration

For the three months ended March 31, 2023 and April 1, 2022, the Company’s top 10 customers accounted for 52.2%, and 54.2%, respectively, of the Company’s consolidated contract revenue. For the three months ended March 31, 2023, and April 1, 2022, the Company had one customer, the Los Angeles Department of Water and Power (“LADWP”), that accounted for 11.1% and 17.1% of its consolidated contract revenues, respectively.

On a segment basis, the Company had individual customers that accounted for more than 10% of its segment contract revenues. For the three months ended March 31, 2023, the Company derived 13.7% of its Energy segment revenues from one customer, LADWP. For the three months ended March 31, 2023, no single customer accounted for 10% or more of its Engineering and Consulting segment revenues. For the three months ended April 1, 2022, the Company derived 32.1% of its Energy segment revenues from two customers, LADWP and Duke Energy. For the three months ended April 1, 2022, no single customer accounted for 10% or more of its Engineering and Consulting segment revenues.

On a geographical basis, the Company’s largest clients are based in California and New York. For the three months ended March 31, 2023 and April 1, 2022, services provided to clients in California accounted for 42.4% and 43.6%, respectively, of the Company’s contract revenue and services provided to clients in New York accounted for 24.5% and 19.0%, respectively, of the Company’s 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
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+ Details

INCOME TAXES

3 Months Ended

Mar. 31, 2023

INCOME TAXES

INCOME TAXES

9. INCOME TAXES

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences of temporary differences between the financial reporting basis and tax basis of the Company’s assets and liabilities, subject to a judgmental assessment of the recoverability of deferred tax assets. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is recorded when it is more likely than not that some of the deferred tax assets may not be realized. Significant judgment is applied when assessing the need for valuation allowances and includes the evaluation of historical income (loss) adjusted for the effects of non-recurring items and the impact of recent business combinations. Areas of estimation include the Company’s consideration of future taxable income which is driven by verifiable signed contracts 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.

At the end of fiscal year 2022, the Company’s total valuation allowance was $1.2 million, remaining unchanged from the end of fiscal year 2021. As of March 31, 2023, 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 March 31, 2023, 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 three months ended March 31, 2023.

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. During the three months ended March 31, 2023 and three months ended April 1, 2022, the Company did not record a liability for uncertain tax positions.

Based on the Company’s estimates and determination of an effective tax rate for the year, the Company recorded an income tax expense of $0.8 million for the three months ended March 31, 2023, as compared to an income tax benefit of $2.4 million for the three months ended April 1, 2022. During the three months ended March 31, 2023, the difference between the effective tax rate and the federal statutory rate was primarily attributable to state taxes, non-deductible stock compensation, nondeductible executive compensation, research and development tax credits, and the commercial building energy efficiency deduction. During the three months ended April 1, 2022, the difference between the effective tax rate and the federal statutory rate was primarily attributable to state taxes, non-deductible stock compensation, nondeductible executive compensation, research and development tax credits, and the commercial building energy efficiency deduction.

- 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

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
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+ Details

EARNINGS PER SHARE (EPS)

3 Months Ended

Mar. 31, 2023

EARNINGS PER SHARE (EPS)

EARNINGS PER SHARE (EPS)

10. 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
	March 31,		April 1,
	2023		2022
	(in thousands, except per share amounts)
Net income (loss)	$	932	$	(3,773)
Weighted-average common shares outstanding		13,266		12,786
Effect of dilutive stock options and restricted stock awards		204		—
Weighted-average common shares outstanding-diluted		13,470		12,786
Earnings (Loss) per share:
Basic	$	0.07	$	(0.30)
Diluted	$	0.07	$	(0.30)

For the three months ended March 31, 2023, the Company excluded 397,000 common shares subject to outstanding equity awards from the calculation of diluted shares because their impact would have been anti-dilutive. For the three months ended April 1, 2022, the Company reported a net loss, and accordingly, all outstanding equity awards have been excluded from such periods because including them would have been anti-dilutive.

CONTINGENCIES

3 Months Ended

Mar. 31, 2023

CONTINGENCIES

CONTINGENCIES

11. CONTINGENCIES

Claims and Lawsuits

The Company is subject to claims and lawsuits from time to time, including those alleging professional errors or omissions that arise in the ordinary course of business against firms that operate in the engineering and consulting professions. The Company carries professional liability insurance, subject to certain deductibles and policy limits, for such claims as they arise and may from time to time establish reserves for litigation that is considered probable of a loss.

In accordance with accounting standards regarding loss contingencies, the Company accrues an undiscounted liability for those contingencies where the incurrence of a loss is probable and the amount can be reasonably estimated, and discloses the amount accrued and an estimate of any reasonably possible loss in excess of the amount accrued, if such disclosure is necessary for the Company’s financial statements not to be misleading. The Company does not accrue liabilities when the likelihood that the liability has been incurred is probable but the amount cannot be reasonably estimated, or when the liability is believed to be only reasonably possible or remote.

Because litigation outcomes are inherently unpredictable, the Company’s evaluation of legal proceedings often involves a series of complex assessments by management about future events and can rely heavily on estimates and assumptions. If the assessments indicate that loss contingencies that could be material to any one of the Company’s financial statements are not probable, but are reasonably possible, or are probable, but cannot be estimated, then the Company will disclose the nature of the loss contingencies, together with an estimate of the possible loss or a statement that such loss is not reasonably estimable. While the consequences of certain unresolved proceedings are not presently determinable, and a reasonable estimate of the probable and reasonably possible loss or range of loss in excess of amounts accrued for such proceedings cannot be made, an adverse outcome from such proceedings could have a material adverse effect on the Company’s earnings in any given reporting period. However, in the opinion of the Company’s management, after consulting with legal counsel, and taking into account insurance coverage, the ultimate liability related to current outstanding claims and lawsuits is not expected to have a material adverse effect on the Company’s financial statements.

SUBSEQUENT EVENTS

3 Months Ended

Mar. 31, 2023

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS

12. SUBSEQUENT EVENTS

On April 28, 2023, the Company delivered to the Administrative Agent the required financial statements and compliance documents for the fiscal quarter ending March 31, 2023, reflecting full compliance with the restrictive covenants under the Credit Agreement, and thus effectively terminating the limitations on borrowing capacity and other restrictions imposed under the terms set by the Seventh Amendment.

Effective April 28, 2023, which is the date that the Administrative Agent received the required financial statements and compliance documents for the fiscal quarter ending March 31, 2023, borrowings under the Credit Agreement bear interest at either a Base Rate (as defined in the Credit Agreement) or the Secured Overnight Financing Rate (“SOFR”), at the Company’s option, and in each case, plus an applicable margin, which applicable margin ranges from 0.125% to 1.25% with respect to Base Rate borrowings and 1.125% to 2.25% with respect to SOFR borrowings, depending on the Total Leverage Ratio; provided, that SOFR cannot be less than 0.00%, with the specific pricing reset on each date on which the Administrative Agent receives the required financial statements under the Credit Agreement for the fiscal quarter then ended. The Company must also pay a commitment fee for the unused portion of the Revolving Credit Facility and the Delayed Draw Term Loan under the Credit Agreement, which ranges from 0.15% to 0.40% per annum depending on the Total 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 1.688% per annum, in each case, depending on whether such letter of credit is a performance or financial letter of credit and the Total Leverage Ratio.

The Credit Agreement requires the Company to comply with certain financial covenants, including requiring that the Company maintain a (i) Total Leverage Ratio of at least 3.25 to 1.00, and (ii) Fixed Charge Coverage Ratio of not less than 1.20 to 1.00, in each case tested quarterly.

ORGANIZATION AND OPERATIONS OF THE COMPANY (Policies)

3 Months Ended

Mar. 31, 2023

ORGANIZATION AND OPERATIONS OF THE COMPANY

Basis of Presentation

Fiscal Years

Fiscal Years

Use of Estimates

Use of Estimates

Accounting Pronouncements Recently Adopted

Revenue Recognition

3. REVENUES

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

- Definition

Disclosure of accounting policy for revenue from contract with customer.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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+ Details

REVENUES (Tables)

3 Months Ended

Mar. 31, 2023

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)

3 Months Ended

Mar. 31, 2023

SUPPLEMENTAL FINANCIAL STATEMENT DATA

Schedule of reconciliation of cash and cash equivalents, and restricted cash


	March 31,		December 30,
	2023		2022
	(in thousands)
Cash and cash equivalents	$	17,853	$	8,806
Restricted cash		—		10,679
Total cash, cash equivalents, and restricted cash shown in the consolidated statement of cash flows	$	17,853	$	19,485

Schedule of equipment and leasehold improvements


	March 31,		December 30,
	2023		2022
	(in thousands)
Furniture and fixtures	$	4,176	$	4,062
Computer hardware and software		38,172		35,635
Leasehold improvements		3,832		3,097
Equipment under finance leases		5,434		5,503
Automobiles, trucks, and field equipment		3,199		3,134
Subtotal		54,813		51,431
Accumulated depreciation and amortization		(30,318)		(28,894)
Equipment and leasehold improvements, net	$	24,495	$	22,537

Schedule of accrued liabilities


	March 31,		December 30,
	2023		2022
	(in thousands)
Accrued subcontractor costs	$	20,456	$	28,374
Accrued bonuses		9,720		8,470
Employee withholdings		3,664		2,571
Compensation and payroll taxes		3,540		2,340
Rebate and other		768		14,643
Accrued accounting and taxes		2,400		2,712
Total accrued liabilities	$	40,548	$	59,110

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


	December 30,		Additional		Additions /		March 31,
	2022		Purchase Cost		Adjustments		2023
	(in thousands)
Reporting Unit:
Energy	$	129,375	$	—	$	—	$	129,375
Engineering and Consulting		749		—		—		749
	$	130,124	$	—	$	—	$	130,124

Schedule of gross amounts and accumulated amortization of acquired identifiable intangible assets with finite useful lives


	March 31, 2023				December 30, 2022
	Gross		Accumulated		Gross		Accumulated		Amortization
	Amount		Amortization		Amount		Amortization		Period
	(in thousands)								(in years)
Finite:
Tradename	$	15,911	$	11,488	$	15,911	$	10,990	2.5	-	6.0
Developed technology		15,810		12,602		15,810		11,871	8.0
Customer relationships		58,149		26,919		58,149		25,523	5.0	-	8.0
Total intangible assets	$	89,870	$	51,009	$	89,870	$	48,384

- Definition

Tabular disclosure of goodwill by reportable segment and in total which includes a rollforward schedule.

+ References

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+ Details

DEBT OBLIGATIONS (Tables)

3 Months Ended

Mar. 31, 2023

DEBT OBLIGATIONS

Schedule of debt obligations, excluding obligations under capital leases


	March 31,		December 30,
	2023		2022
	(in thousands)
Outstanding borrowings on Term A Loan	$	62,500	$	65,000
Outstanding borrowings on Revolving Credit Facility		—		—
Outstanding borrowings on Delayed Draw Term Loan		38,250		41,000
Other debt agreements		1,473		1,958
Total debt		102,223		107,958
Issuance costs and debt discounts		(426)		(511)
Subtotal		101,797		107,447
Less current portion of long-term debt		16,436		16,903
Long-term debt portion	$	85,361	$	90,544

LEASES (Tables)

3 Months Ended

Mar. 31, 2023

LEASES

Summary of the Lease Expense


	Three Months Ended
	March 31,		April 1,
	2023		2022
	(in thousands)
Operating lease cost	$	1,493	$	1,578
Finance lease cost:
Amortization of assets		311		233
Interest on lease liabilities		22		14
Total net lease cost	$	1,826	$	1,825

Summary of Lease Information Presented on the Condensed Consolidated Balance Sheet


	March 31,			December 30,
	2023			2022
	(in thousands)
Operating leases:
Right-of-use assets	$	12,750		$	12,390

Lease liability	$	4,435		$	4,625
Lease liability, less current portion		9,796			8,599
Total lease liabilities	$	14,231		$	13,224

Finance leases (included in equipment and leasehold improvements, net):
Equipment and leasehold improvements, net	$	5,434		$	5,503
Accumulated depreciation		(3,024)			(2,830)
Total equipment and leasehold improvements, net	$	2,410		$	2,673

Finance lease obligations	$	1,105		$	1,113
Finance lease obligations, less current portion		1,354			1,601
Total finance lease obligations	$	2,459		$	2,714

Weighted average remaining lease term (in years):
Operating Leases		3.52			3.35
Finance Leases		2.48			2.66

Weighted average discount rate:
Operating Leases		5.10	%		4.25	%
Finance Leases		3.59	%		3.47	%

Summary of Other Information and Supplemental Cash Flow Information Related to Finance and Operating Leases


	Three Months Ended
	March 31,		April 1,
	2023		2022
	(in thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flow from operating leases	$	1,570	$	1,670
Operating cash flow from finance leases		22		14
Financing cash flow from finance leases		303		342

Right-of-use assets obtained in exchange for lease liabilities:
Operating leases	$	2,120	$	525

Summary of the Maturities of Operating Lease Liabilities


	Operating		Finance
	(in thousands)
Fiscal year:
Remainder of 2023	$	3,691	$	949
2024		4,233		997
2025		3,410		399
2026		2,877		172
2027		1,050		58
2028 and thereafter		461		—
Total lease payments		15,722		2,575
Less: Imputed interest		(1,491)		(116)
Total lease obligations		14,231		2,459
Less: Current obligations		4,435		1,105
Noncurrent lease obligations	$	9,796	$	1,354

Summary of the Maturities of Finance Lease Liabilities


	Operating		Finance
	(in thousands)
Fiscal year:
Remainder of 2023	$	3,691	$	949
2024		4,233		997
2025		3,410		399
2026		2,877		172
2027		1,050		58
2028 and thereafter		461		—
Total lease payments		15,722		2,575
Less: Imputed interest		(1,491)		(116)
Total lease obligations		14,231		2,459
Less: Current obligations		4,435		1,105
Noncurrent lease obligations	$	9,796	$	1,354

SEGMENT AND GEOGRAPHICAL INFORMATION (Tables)

3 Months Ended

Mar. 31, 2023

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 March 31, 2023
Contract revenue	$	83,285	$	19,318	$	-	$	-	$	102,603
Depreciation and amortization		3,924		276		-		-		4,200
Interest expense, net		2		-		2,464		-		2,466
Segment profit (loss) before income tax expense		2,771		2,587		(3,670)		-		1,688
Income tax expense (benefit)		1,241		1,158		(1,643)		-		756
Net income (loss)		1,530		1,428		(2,026)		-		932
Segment assets ⁽¹⁾		323,578		23,587		69,332		(23,130)		393,367
Fiscal Three Months Ended April 1, 2022
Contract revenue	$	74,886	$	16,952	$	-	$	-	$	91,838
Depreciation and amortization		4,157		252		-		-		4,409
Interest expense, net		4		-		747		-		751
Segment profit (loss) before income tax expense		(4,353)		2,107		(3,916)		-		(6,162)
Income tax expense (benefit)		(1,687)		817		(1,519)		-		(2,389)
Net income (loss)		(2,665)		1,290		(2,398)		-		(3,773)
Segment assets ⁽¹⁾		336,957		22,979		35,931		(23,130)		372,737

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

Schedule of disaggregation of revenue


	Three months ended March 31, 2023
	Energy		Engineering and Consulting		Total
	(in thousands)
Contract Type
Time-and-materials	$	7,709	$	14,554	$	22,263
Unit-based		44,927		3,616		48,543
Fixed price		30,649		1,148		31,797
Total⁽¹⁾	$	83,285	$	19,318	$	102,603

Client Type
Commercial	$	6,719	$	1,164	$	7,883
Government		26,075		18,095		44,170
Utilities⁽²⁾		50,491		59		50,550
Total⁽¹⁾	$	83,285	$	19,318	$	102,603

Geography ⁽³⁾
Domestic	$	83,285	$	19,318	$	102,603


	Three months ended April 1, 2022
	Energy		Engineering and Consulting		Total
	(in thousands)
Contract Type
Time-and-materials	$	8,818	$	13,001	$	21,819
Unit-based		42,957		2,984		45,941
Fixed price		23,110		968		24,078
Total ⁽¹⁾	$	74,886	$	16,952	$	91,838

Client Type
Commercial	$	8,089	$	1,478	$	9,567
Government		18,359		15,453		33,812
Utilities ⁽²⁾		48,437		21		48,458
Total ⁽¹⁾	$	74,886	$	16,952	$	91,838

Geography ⁽³⁾
Domestic	$	74,886	$	16,952	$	91,838

(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 not material for the three months ended March 31, 2023 and April 1, 2022.

EARNINGS PER SHARE (EPS) (Tables)

3 Months Ended

Mar. 31, 2023

EARNINGS PER SHARE (EPS)

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


	Three months ended
	March 31,		April 1,
	2023		2022
	(in thousands, except per share amounts)
Net income (loss)	$	932	$	(3,773)
Weighted-average common shares outstanding		13,266		12,786
Effect of dilutive stock options and restricted stock awards		204		—
Weighted-average common shares outstanding-diluted		13,470		12,786
Earnings (Loss) per share:
Basic	$	0.07	$	(0.30)
Diluted	$	0.07	$	(0.30)

ORGANIZATION AND OPERATIONS OF THE COMPANY - Segment Information (Details) - segment	3 Months Ended
	Mar. 31, 2023	Apr. 01, 2022
Segment Information
Number of reporting segments	2	2

ORGANIZATION AND OPERATIONS OF THE COMPANY - Fiscal Years (Details)	3 Months Ended				12 Months Ended
	Dec. 29, 2023	Sep. 29, 2023	Jun. 30, 2023	Mar. 31, 2023	Dec. 29, 2023
Entity Information
Length of fiscal period	91 days	91 days	91 days	91 days	364 days
Minimum
Entity Information
Length of fiscal period				91 days	364 days
Maximum
Entity Information
Length of fiscal period				98 days	371 days

REVENUES - Segment Information (Details) - segment	3 Months Ended
REVENUES - Segment Information (Details) - segment	Mar. 31, 2023	Apr. 01, 2022
Segment Information
Number of reporting segments	2	2

REVENUES - General Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Apr. 01, 2022	Dec. 30, 2022
Revenue
Payroll taxes, bonuses and employee benefit costs for all Company personnel	$ 22,385	$ 19,357
Revenue of the entity recorded in which it acts solely in the capacity of an agent	0
Retained accounts receivable	$ 10,300
Accounts receivable
Revenue
Retained accounts receivable			$ 8,500
Maximum
Revenue
Percent of revenue (as a percent)	3.00%
Minimum
Revenue
Percent of revenue (as a percent)	2.00%
Cost of Sales
Revenue
Payroll taxes, bonuses and employee benefit costs for all Company personnel	$ 0
Allocation of facilities costs to contract revenue	$ 0

SUPPLEMENTAL FINANCIAL STATEMENT DATA - Restricted Cash (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 30, 2022	Apr. 01, 2022	Dec. 31, 2021
Cash, Cash Equivalents, Restricted Cash, and Restricted Cash Equivalents
Cash and cash equivalents	$ 17,853	$ 8,806
Restricted cash		10,679
Total cash, cash equivalents, and restricted cash shown in the consolidated statement of cash flows	$ 17,853	$ 19,485	$ 7,651	$ 11,221
Restricted Cash, Statement of Financial Position	Restricted cash	Restricted cash

SUPPLEMENTAL FINANCIAL STATEMENT DATA - Accounts Receivable (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Apr. 01, 2022
SUPPLEMENTAL FINANCIAL STATEMENT DATA
Cash proceeds from sale of trade receivables	$ 0	$ 0

SUPPLEMENTAL FINANCIAL STATEMENT DATA - Equipment and Leasehold Improvements, Net - Tabular Disclosure (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 30, 2022
Equipment and Leasehold Improvements
Equipment under finance leases	$ 5,434	$ 5,503
Equipment and leasehold improvements, gross	54,813	51,431
Accumulated depreciation and amortization	(30,318)	(28,894)
Total equipment and leasehold improvements, net	24,495	22,537
Furniture and Fixtures
Equipment and Leasehold Improvements
Equipment and leasehold improvements	4,176	4,062
Computer Hardware and Software
Equipment and Leasehold Improvements
Equipment and leasehold improvements	38,172	35,635
Leasehold Improvements
Equipment and Leasehold Improvements
Equipment and leasehold improvements	3,832	3,097
Automobiles Trucks and Field Equipment
Equipment and Leasehold Improvements
Equipment and leasehold improvements	$ 3,199	$ 3,134

SUPPLEMENTAL FINANCIAL STATEMENT DATA - Equipment and Leasehold Improvements, Net - Depreciation and Amortization Expense (Details) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Mar. 31, 2023	Apr. 01, 2022	Dec. 30, 2022
Amortization Expense
Amortization expense	$ 311	$ 233	$ 1,100

SUPPLEMENTAL FINANCIAL STATEMENT DATA - Accrued Liabilities (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 30, 2022
Accrued Liabilities
Accrued subcontractor costs	$ 20,456	$ 28,374
Accrued bonuses	9,720	8,470
Employee withholdings	3,664	2,571
Compensation and payroll taxes	3,540	2,340
Rebate and other	768	14,643
Accrued accounting and taxes	2,400	2,712
Total accrued liabilities	$ 40,548	$ 59,110

SUPPLEMENTAL FINANCIAL STATEMENT DATA - Goodwill (Details) $ in Thousands	Mar. 31, 2023 USD ($)
Changes in carrying value of goodwill
Goodwill at beginning of period	$ 130,124
Goodwill at end of period	130,124
Energy
Changes in carrying value of goodwill
Goodwill at beginning of period	129,375
Goodwill at end of period	129,375
Engineering and Consulting
Changes in carrying value of goodwill
Goodwill at beginning of period	749
Goodwill at end of period	$ 749

- Definition

Amount after accumulated impairment loss of an asset representing future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized.

+ References + Details

SUPPLEMENTAL FINANCIAL STATEMENT DATA - Finite-lived Intangible Assets - Gross Amounts and Accumulated Amortization (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 30, 2022
Finite-Lived Intangible Assets
Total finite intangible assets	$ 89,870	$ 89,870
Accumulated Amortization	51,009	48,384
Trade Names
Finite-Lived Intangible Assets
Total finite intangible assets	15,911	15,911
Accumulated Amortization	11,488	10,990
Developed Technology Rights
Finite-Lived Intangible Assets
Total finite intangible assets	15,810	15,810
Accumulated Amortization	12,602	11,871
Customer Relationships
Finite-Lived Intangible Assets
Total finite intangible assets	58,149	58,149
Accumulated Amortization	$ 26,919	$ 25,523

SUPPLEMENTAL FINANCIAL STATEMENT DATA - Finite-lived Intangible Assets - Amortization Period (Details)	3 Months Ended
	Mar. 31, 2023
Trade Names \| Minimum
Finite-Lived Intangible Assets
Amortization Period	2 years 6 months
Trade Names \| Maximum
Finite-Lived Intangible Assets
Amortization Period	6 years
Developed Technology Rights
Finite-Lived Intangible Assets
Amortization Period	8 years
Customer Relationships \| Minimum
Finite-Lived Intangible Assets
Amortization Period	5 years
Customer Relationships \| Maximum
Finite-Lived Intangible Assets
Amortization Period	8 years

DEBT OBLIGATIONS - Composition (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 30, 2022
Debt Obligations
Total debt	$ 102,223	$ 107,958
Issuance costs and debt discounts	(426)	(511)
Subtotal - total debt principal	101,797	107,447
Notes Payable to Banks \| Term A Loan
Debt Obligations
Total debt	62,500	65,000
Notes Payable to Banks \| Delayed Draw Term Loan Facility
Debt Obligations
Total debt	38,250	41,000
Notes Payable, Other Payables \| Other Debt
Debt Obligations
Total debt	$ 1,473	$ 1,958

- Definition

Amount, excluding unamortized premium (discount) and debt issuance cost, of long-term debt. Excludes lease obligation.

+ References + Details

DEBT OBLIGATIONS - Classification (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 30, 2022
Debt Obligations
Subtotal	$ 101,797	$ 107,447
Less current portion of long-term debt	16,436	16,903
Long-term debt portion	$ 85,361	$ 90,544

- Definition

Amount, excluding unamortized premium (discount) and debt issuance cost, of long-term debt. Excludes lease obligation.

+ References + Details

DEBT OBLIGATIONS - Credit Facilities (Details) - Notes Payable to Banks $ in Millions	Nov. 01, 2022 USD ($)	Jun. 26, 2019 USD ($)
Term A Loan
Debt Obligations
Initial outstanding principal		$ 100.0
Revolving Credit Facility
Debt Obligations
Maximum borrowing capacity		50.0
Maximum borrowing capacity during the period from November 1, 2022 through the date on which financial statements and compliance documents have been received by the Administrative Agent for the fiscal quarter ending March 31, 2023	$ 10.0
Debt instrument, covenants, Total Leverage Ratio, access to accordion feature, high end of range	3.0
Delayed Draw Term Loan Facility
Debt Obligations
Maximum borrowing capacity		$ 50.0

LEASES - General Information (Details) $ in Thousands	3 Months Ended
LEASES - General Information (Details) $ in Thousands	Mar. 31, 2023 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		12 Months Ended
LEASES - Lease Expense (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Apr. 01, 2022	Dec. 30, 2022
Lease cost
Operating lease cost	$ 1,493	$ 1,578
Amortization of assets	311	233	$ 1,100
Interest on lease liabilities	22	14
Total net lease cost	$ 1,826	$ 1,825

LEASES - Consolidated Balance Sheet (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 30, 2022
Leases
Right-of-use assets	$ 12,750	$ 12,390
Operating leases, lease liabilities
Lease liability	4,435	4,625
Lease liability, less current portion	9,796	8,599
Total lease liabilities	14,231	13,224
Finance leases (included in equipment and leasehold improvements, net):
Equipment and leasehold improvements	5,434	5,503
Accumulated depreciation	(3,024)	(2,830)
Total equipment and leasehold improvements, net	$ 2,410	$ 2,673
Finance Lease, Right-of-Use Asset, Statement of Financial Position	Equipment and leasehold improvements, net	Equipment and leasehold improvements, net
Finance lease obligations
Finance lease obligations	$ 1,105	$ 1,113
Finance lease obligations, less current portion	1,354	1,601
Total finance lease obligations	$ 2,459	$ 2,714

LEASES - Additional Information (Details)	Mar. 31, 2023	Dec. 30, 2022
Leases
Operating leases, weighted average remaining lease term	3 years 6 months 7 days	3 years 4 months 6 days
Finance leases, weighted average remaining lease term	2 years 5 months 23 days	2 years 7 months 28 days
Operating leases, weighted average discount rate	5.10%	4.25%
Finance leases, weighted average discount rate	3.59%	3.47%

LEASES - Rent Expense (Details) - USD ($) $ in Millions	3 Months Ended
LEASES - Rent Expense (Details) - USD ($) $ in Millions	Mar. 31, 2023	Apr. 01, 2022
LEASES
Rent expenses	$ 1.6	$ 1.6

LEASES - Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Apr. 01, 2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flow from operating leases	$ 1,570	$ 1,670
Operating cash flow from finance leases	22	14
Financing cash flow from finance leases	303	342
Right-of-use assets obtained in exchange for lease liabilities for operating leases	$ 2,120	$ 525

LEASES - Operating Leases - Maturities of Lease Liabilities (Details) $ in Thousands	Mar. 31, 2023 USD ($)
Operating
Remainder of 2023	$ 3,691
2024	4,233
2025	3,410
2026	2,877
2027	1,050
2028 and thereafter	461
Total lease payments	$ 15,722

LEASES - Operating Leases - Gross Difference (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 30, 2022
Operating
Total lease payments	$ 15,722
Less: Imputed interest	(1,491)
Total lease liabilities	14,231	$ 13,224
Less: Current obligations	4,435	4,625
Noncurrent lease obligations	$ 9,796	$ 8,599

LEASES - Finance Leases - Maturities of Lease Liabilities (Details) $ in Thousands	Mar. 31, 2023 USD ($)
Finance
Remainder of 2023	$ 949
2024	997
2025	399
2026	172
2027	58
Total lease payments	$ 2,575

LEASES - Finance Leases - Gross Difference (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 30, 2022
Finance
Total lease payments	$ 2,575
Less: Imputed interest	(116)
Total finance lease obligations	2,459	$ 2,714
Less: Current obligations	1,105	1,113
Noncurrent lease obligations	$ 1,354	$ 1,601

COMMITMENTS AND VARIABLE INTEREST ENTITIES - Employee Benefit Plans (Details)	3 Months Ended
	Mar. 31, 2023 USD ($) Y	Apr. 01, 2022 USD ($)
Qualified Cash or Deferred Arrangement
Employee Benefit Plans
Maximum employee contribution as a percentage of compensation under 401(k) Plan (as a percent)	50.00%
Defined Contribution Plan, Tax Status	us-gaap:QualifiedPlanMember
Defined Contribution Plan
Employee Benefit Plans
Service period	3 months
Attained age \| Y	21
Defined contribution plan, employer matching contribution, percent of match (as a percent)	50.00%
Defined contribution plan, employer matching contribution, percent of employees' gross pay (as a percent)	6.00%
Maximum employer contribution per employee	$ 3,000
Employer matching contributions	$ 1,000,000.0	$ 1,000,000.0

COMMITMENTS AND VARIABLE INTEREST ENTITIES - Variable Interest Entities (Details)	3 Months Ended
	Mar. 31, 2023 entity
COMMITMENTS AND VARIABLE INTEREST ENTITIES
Number of VIEs	1

SEGMENT AND GEOGRAPHICAL INFORMATION - Segment Information (Details) - segment	3 Months Ended
	Mar. 31, 2023	Apr. 01, 2022
Segment Information
Number of reporting segments	2	2

SEGMENT AND GEOGRAPHICAL INFORMATION - Statement of Operations (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Apr. 01, 2022
Segment reconciliation
Contract revenue	$ 102,603	$ 91,838
Depreciation and amortization	4,200	4,409
Interest expense, net	2,466	751
Segment profit (loss) before income tax expense	1,688	(6,162)
Income tax expense (benefit)	756	(2,389)
Net income (loss)	932	(3,773)
Energy
Segment reconciliation
Contract revenue	83,285	74,886
Depreciation and amortization	3,924	4,157
Engineering and Consulting
Segment reconciliation
Contract revenue	19,318	16,952
Depreciation and amortization	276	252
Operating Segments \| Energy
Segment reconciliation
Interest expense, net	2	4
Segment profit (loss) before income tax expense	2,771	(4,353)
Income tax expense (benefit)	1,241	(1,687)
Net income (loss)	1,530	(2,665)
Operating Segments \| Engineering and Consulting
Segment reconciliation
Segment profit (loss) before income tax expense	2,587	2,107
Income tax expense (benefit)	1,158	817
Net income (loss)	1,428	1,290
Corporate, Non-Segment
Segment reconciliation
Interest expense, net	2,464	747
Segment profit (loss) before income tax expense	(3,670)	(3,916)
Income tax expense (benefit)	(1,643)	(1,519)
Net income (loss)	$ (2,026)	$ (2,398)

SEGMENT AND GEOGRAPHICAL INFORMATION - Segment Assets (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 30, 2022	Apr. 01, 2022
Segment Reporting
Segment assets	$ 393,367	$ 409,674	$ 372,737
Operating Segments \| Energy
Segment Reporting
Segment assets	323,578		336,957
Operating Segments \| Engineering and Consulting
Segment Reporting
Segment assets	23,587		22,979
Corporate, Non-Segment
Segment Reporting
Segment assets	69,332		35,931
Intersegment Eliminations
Segment Reporting
Segment assets	$ (23,130)		$ (23,130)

- Definition

Sum of the carrying amounts as of the balance sheet date of all assets that are recognized. Assets are probable future economic benefits obtained or controlled by an entity as a result of past transactions or events.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
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Reference 2: http://www.xbrl.org/2003/role/exampleRef
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-Name Accounting Standards Codification
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-Section 55
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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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Reference 5: http://www.xbrl.org/2003/role/disclosureRef
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Reference 6: http://fasb.org/us-gaap/role/ref/legacyRef
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
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Reference 9: http://www.xbrl.org/2009/role/commonPracticeRef
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Reference 10: http://www.xbrl.org/2003/role/disclosureRef
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Reference 11: http://www.xbrl.org/2003/role/disclosureRef
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Reference 12: http://www.xbrl.org/2003/role/disclosureRef
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Reference 13: http://www.xbrl.org/2003/role/disclosureRef
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Reference 22: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

SEGMENT AND GEOGRAPHICAL INFORMATION - Disaggregation of Revenue (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Apr. 01, 2022
Revenue
Revenue	$ 102,603	$ 91,838
Domestic
Revenue
Revenue	102,603	91,838
Energy
Revenue
Revenue	83,285	74,886
Energy \| Domestic
Revenue
Revenue	83,285	74,886
Engineering and Consulting
Revenue
Revenue	19,318	16,952
Engineering and Consulting \| Domestic
Revenue
Revenue	19,318	16,952
Commercial
Revenue
Revenue	7,883	9,567
Commercial \| Energy
Revenue
Revenue	6,719	8,089
Commercial \| Engineering and Consulting
Revenue
Revenue	1,164	1,478
Government
Revenue
Revenue	44,170	33,812
Government \| Energy
Revenue
Revenue	26,075	18,359
Government \| Engineering and Consulting
Revenue
Revenue	18,095	15,453
Utilities
Revenue
Revenue	50,550	48,458
Utilities \| Energy
Revenue
Revenue	50,491	48,437
Utilities \| Engineering and Consulting
Revenue
Revenue	59	21
Time-and-Materials Contract
Revenue
Revenue	22,263	21,819
Time-and-Materials Contract \| Energy
Revenue
Revenue	7,709	8,818
Time-and-Materials Contract \| Engineering and Consulting
Revenue
Revenue	14,554	13,001
Unit-based Contract
Revenue
Revenue	48,543	45,941
Unit-based Contract \| Energy
Revenue
Revenue	44,927	42,957
Unit-based Contract \| Engineering and Consulting
Revenue
Revenue	3,616	2,984
Fixed-Price Contract
Revenue
Revenue	31,797	24,078
Fixed-Price Contract \| Energy
Revenue
Revenue	30,649	23,110
Fixed-Price Contract \| Engineering and Consulting
Revenue
Revenue	$ 1,148	$ 968

SEGMENT AND GEOGRAPHICAL INFORMATION - Geographical Information (Details)	Mar. 31, 2023 state
SEGMENT AND GEOGRAPHICAL INFORMATION
Number of states in which entity operates	22

SEGMENT AND GEOGRAPHICAL INFORMATION - Concentration Risk (Details)	3 Months Ended
	Mar. 31, 2023	Apr. 01, 2022
Revenue from Contract with Customer Benchmark \| Customer Concentration Risk \| Top Ten Customers
Concentration Risk
Concentration risk (as a percent)	52.20%	54.20%
Revenue from Contract with Customer Benchmark \| Customer Concentration Risk \| Los Angeles Department of Water and Power
Concentration Risk
Concentration risk (as a percent)	11.10%	17.10%
Revenue from Contract with Customer Benchmark \| Geographic Concentration Risk \| California
Concentration Risk
Concentration risk (as a percent)	42.40%	43.60%
Revenue from Contract with Customer Benchmark \| Geographic Concentration Risk \| New York
Concentration Risk
Concentration risk (as a percent)	24.50%	19.00%
Revenue from Contract with Customer, Segment Benchmark \| Customer Concentration Risk \| Los Angeles Department of Water and Power \| Energy
Concentration Risk
Concentration risk (as a percent)	13.70%
Revenue from Contract with Customer, Segment Benchmark \| Customer Concentration Risk \| Los Angeles Department of Water and Power, and Duke Energy \| Energy
Concentration Risk
Concentration risk (as a percent)		32.10%

INCOME TAXES - Valuation Allowance (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Dec. 30, 2022	Dec. 31, 2021
INCOME TAXES
Valuation allowance		$ (1,200)	$ (1,200)
Increase (decrease) in valuation allowance	$ 0

INCOME TAXES - Uncertain Tax Positions (Details) $ in Thousands	Mar. 31, 2023 USD ($)
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued
Liability for uncertain tax positions	$ 0

INCOME TAXES - Income Tax Expense (Benefit) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Apr. 01, 2022
INCOME TAXES
Income tax expense (benefit)	$ 756	$ (2,389)

- Definition

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

+ References + Details

EARNINGS PER SHARE (EPS) - Computation (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2023	Apr. 01, 2022
Net income (loss)
Net income (loss)	$ 932	$ (3,773)
Net income (loss) - basic	932	(3,773)
Net income (loss) - diluted	$ 932	$ (3,773)
Weighted-average shares outstanding:
Weighted-average common shares outstanding (in shares)	13,266	12,786
Effect of dilutive stock options and restricted stock awards (in shares)	204
Weighted-average common shares outstanding-diluted (in shares)	13,470	12,786
Earnings (loss) per share:
Basic (in dollars per share)	$ 0.07	$ (0.30)
Diluted (in dollars per share)	$ 0.07	$ (0.30)

EARNINGS PER SHARE (EPS) - Antidilutive Securities (Details) shares in Thousands	3 Months Ended
	Mar. 31, 2023 shares
Share-Based Payment Arrangement
Antidilutive securities
Antidilutive securities excluded from computation of earnings per share (in shares)	397

SUBSEQUENT EVENTS (Details) - Subsequent Event - Notes Payable to Banks	Apr. 28, 2023
Credit Agreement 2019
Subsequent Events
Debt instrument, covenants, total leverage ratio, maximum permitted to maintain	3.25
Debt instrument, covenants, minimum fixed charge coverage ratio	1.20
Credit Agreement 2019 \| Minimum
Subsequent Events
Commitment fee (as a percent)	0.15%
Credit Agreement 2019 \| Maximum
Subsequent Events
Commitment fee (as a percent)	0.40%
Credit Agreement 2019 \| Base Rate \| Minimum
Subsequent Events
Spread on floating interest rate (as a percent)	0.125%
Credit Agreement 2019 \| Base Rate \| Maximum
Subsequent Events
Spread on floating interest rate (as a percent)	1.25%
Credit Agreement 2019 \| Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate \| Minimum
Subsequent Events
Spread on floating interest rate (as a percent)	1.125%
Interest rate (as a percent)	0.00%
Credit Agreement 2019 \| Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate \| Maximum
Subsequent Events
Spread on floating interest rate (as a percent)	2.25%
Letter of Credit \| Minimum
Subsequent Events
Commitment fee (as a percent)	0.84%
Letter of Credit \| Maximum
Subsequent Events
Commitment fee (as a percent)	1.688%