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Willdan Reports First Quarter 2008 Financial Results
ANAHEIM, Calif., May 08, 2008 (BUSINESS WIRE) -- Willdan Group, Inc. ("Willdan") (NASDAQ:WLDN) announces financial results for its first quarter ended March 28, 2008.
For the first quarter of 2008, Willdan reported total contract revenue of $17.8 million and net income of $0.1 million, or $0.02 per basic and diluted share.
Tom Brisbin, Willdan's Chief Executive Officer, stated: "While revenue in our first quarter was down, we generated positive cash flow from operations and contained our costs. I'm confident that the operational changes we made last year to improve productivity and position Willdan to win new and different kinds of work will translate into growth and improved performance in 2008. In spite of difficult economic conditions, our outlook for 2008 remains unchanged."
First Quarter 2008 Results
For the first quarter of fiscal 2008, revenue was $17.8 million, down $1.5 million, or 7.7%, from revenue of $19.3 million for the comparable period last year. On a sequential basis, revenue was down $0.9 million, or 4.8% from the fourth quarter of 2007. Income from operations was slightly greater than break-even at $43,000 for the first quarter of fiscal 2008, up $1.1 million from a loss from operations of $1.1 million for the comparable period last year. On a sequential basis, income from operations was down $0.2 million, or 84.9% over the fourth quarter of 2007.
Net income was $0.1 million for the first quarter of fiscal 2008, up $0.4 million from the comparable period last year and down $0.2 million, or 59.0%, on a sequential basis.
Basic and diluted earnings per share for the first quarter of fiscal 2008 were $0.02 as compared to basic and diluted loss per share of $0.03 for the comparable period last year.
Willdan generated cash flow from operations of $1.0 million in the first quarter of fiscal year 2008 and its balance sheet at March 28, 2008 reflected cash, cash equivalents and liquid investments of $17.4 million, working capital of $30.6 million and stockholders' equity of $35.9 million.
Three Months Ended
-------------------
Mar. 28, Mar. 30,
In thousands (except EPS data) 2008 2007
--------- ---------
Revenue $17,776 $19,268
-------------------
Income (loss) from operations 43 (1,077)
Interest expense reversal, net 20 574
Interest income and other, net 148 180
Income tax expense (benefit) 95 (73)
--------- ---------
Net income $ 116 $ (250)
========= =========
Basic and diluted earnings (loss) per share $ 0.02 $ (0.03)
========= =========
Weighted average shares outstanding:
Basic and diluted 7,155 7,148
========= =========
Outlook
The following statement is based on current expectations. This statement is forward-looking and actual results could differ materially from current expectations. This outlook should be read in conjunction with the information on forward-looking statements at the end of this press release.
Willdan continues to expect to report revenue between $80 and $83 million for fiscal year 2008.
Conference Call and Webcast
Chief Executive Officer Thomas Brisbin and Chief Financial Officer Kimberly Gant plan to host a conference call on May 8, 2008 at 5:00 p.m. Eastern/2:00 p.m. Pacific to further discuss Willdan's financial results and business developments.
Interested parties may access the conference call by dialing 800-218-0713 (303-262-2211 for international callers). When prompted, ask for the "Willdan Group Investor Conference Call." The conference call will be webcast simultaneously on Willdan's website at www.willdan.com under Investors: Events.
The telephonic replay of the conference call may be accessed approximately two hours after the call through May 22, 2008, by dialing 800-405-2236 (303-590-3000 for international callers). The replay access code is 11113786#. The webcast replay will be archived for 12 months.
About Willdan Group, Inc.
Founded over 40 years ago, Willdan Group, Inc. is a leading provider of outsourced services to public agencies located primarily in California and other western states. Willdan Group, Inc. assists cities and other government agencies with a broad range of services, including civil engineering, building and safety services, geotechnical engineering, financial and economic consulting, and disaster preparedness and homeland security. www.willdan.com.
Forward-Looking Statements
Safe Harbor Statement: Statements in this press release which are not purely historical, including statements regarding Willdan Group's intentions, hopes, beliefs, expectations, representations, projections, estimates, plans or predictions of the future are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The forward-looking statements involve risks and uncertainties including, but not limited to, the risk that the Company will not be able to expand its services or meet the needs of customers in markets in which it operates. It is important to note that the Company's actual results could differ materially from those in any such forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to, a slowdown in the local and regional economies of the states where Willdan conducts business and the loss of or inability to hire additional qualified professionals. The Company's business could be affected by a number of other factors, including the risk factors listed from time to time in the Company's SEC reports including, but not limited to, the Form 10-K annual report for the year ended December 28, 2007 filed on March 27, 2008. The Company cautions investors not to place undue reliance on the forward-looking statements contained in this press release. Willdan Group, Inc. disclaims any obligation, and does not undertake to update or revise any forward-looking statements in this press release.
WILLDAN GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
March 28, December 28,
2008 2007
------------ ------------
Assets (unaudited)
Current assets:
Cash and cash equivalents $ 13,095,000 $ 15,511,000
Liquid investments 4,265,000 1,300,000
----------- ------------
Cash, cash equivalents and liquid
investments 17,360,000 16,811,000
Accounts receivable, net of allowance for
doubtful accounts of $424,000 and
$372,000 at March 28, 2008 and December
28, 2007, respectively 12,988,000 15,090,000
Costs and estimated earnings in excess of
billings on uncompleted contracts 8,303,000 7,336,000
Other receivables 121,000 157,000
Prepaid expenses and other current assets 1,717,000 2,067,000
----------- ------------
Total current assets 40,489,000 41,461,000
Equipment and leasehold improvements, net 3,121,000 3,354,000
Goodwill 2,911,000 2,911,000
Other assets 500,000 500,000
----------- ------------
Total assets $ 47,021,000 $ 48,226,000
=========== ============
Liabilities and Stockholders' Equity
Current liabilities:
Excess of outstanding checks over bank
balance $ 838,000 $ 633,000
Accounts payable 1,553,000 1,136,000
Accrued liabilities 3,953,000 5,314,000
Billings in excess of costs and
estimated earnings on uncompleted
contracts 706,000 941,000
Notes payable 653,000 1,088,000
Current portion of capital lease
obligations 178,000 176,000
Current portion of deferred income taxes 2,002,000 2,002,000
----------- ------------
Total current liabilities 9,883,000 11,290,000
Capital lease obligations, less current
portion 238,000 283,000
Deferred lease obligations 603,000 606,000
Deferred income taxes, net of current
portion 395,000 395,000
----------- ------------
Total liabilities 11,119,000 12,574,000
----------- ------------
Commitments and contingencies
Stockholders' equity:
Preferred stock, $0.01 par value,
10,000,000 shares authorized, no shares
issued and outstanding -- --
Common stock, $0.01 par value,
40,000,000 shares authorized: 7,156,000
and 7,150,000 shares issued and
outstanding at March 28, 2008 and
December 28, 2007, respectively 71,000 71,000
Additional paid-in capital 32,930,000 32,796,000
Retained earnings 2,901,000 2,785,000
----------- ------------
Total stockholders' equity 35,902,000 35,652,000
----------- ------------
Total liabilities and
stockholders' equity $ 47,021,000 $ 48,226,000
=========== ============
WILLDAN GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
Three Months Ended
-----------------------
March 28, March 30,
2008 2007
---------- -----------
Contract revenue $17,776,000 $19,268,000
---------- -----------
Direct costs of contract revenue:
Salaries and wages 5,544,000 6,484,000
Production expenses 315,000 344,000
Subconsultant services 1,275,000 1,059,000
---------- -----------
Total direct costs of contract
revenue 7,134,000 7,887,000
---------- -----------
General and administrative expenses:
Salaries and wages, payroll taxes and
employee benefits 6,442,000 7,371,000
Facilities 1,148,000 1,102,000
Stock-based compensation 93,000 16,000
Depreciation and amortization 394,000 447,000
Other 2,522,000 3,522,000
---------- -----------
Total general and administrative
expenses 10,599,000 12,458,000
---------- -----------
Income (loss) from operations 43,000 (1,077,000)
---------- -----------
Other income (expense):
Interest expense reversal, net 20,000 574,000
Interest income and other, net 148,000 180,000
---------- -----------
Total other income 168,000 754,000
---------- -----------
Income (loss) before income tax
expense 211,000 (323,000)
Income tax expense (benefit) 95,000 (73,000)
---------- -----------
Net income (loss) $ 116,000 $ (250,000)
========== ===========
Earnings (loss) per share:
Basic and diluted $ 0.02 $ (0.03)
========== ===========
Weighted-average shares outstanding:
Basic and diluted 7,155,000 7,148,000
========== ===========
WILLDAN GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
Three Months Ended
-------------------------
March 28, March 30,
2008 2007
------------ -----------
Cash flows from operating activities:
Net income (loss) $ 116,000 $ (250,000)
Adjustments to reconcile net income (loss)
to net cash provided by (used in)
operating activities:
Depreciation and amortization 394,000 447,000
Loss on sale of equipment 39,000 9,000
Allowance for doubtful accounts 52,000 35,000
Stock-based compensation 93,000 16,000
Changes in operating assets and
liabilities:
Accounts receivable 2,050,000 198,000
Costs and estimated earnings in
excess of billing on uncompleted
contracts (967,000) (519,000)
Other receivables 36,000 3,276,000
Prepaid expenses and other current
assets 350,000 110,000
Other assets (7,000) 10,000
Accounts payable 417,000 69,000
Accrued liabilities (1,361,000) (9,450,000)
Billings in excess of costs and
estimated earnings on uncompleted
contracts (235,000) (65,000)
Deferred lease obligations (3,000) (7,000)
----------- -----------
Net cash provided by (used in)
operating activities 974,000 (6,121,000)
----------- -----------
Cash flows from investing activities:
Purchase of equipment and leasehold
improvements (193,000) (356,000)
Proceeds from sale of equipment -- 27,000
Purchase of liquid investments (7,100,000) --
Proceeds from sale of liquid investments 4,135,000 --
----------- -----------
Net cash used in investing
activities (3,158,000) (329 ,000)
----------- -----------
Cash flows from financing activities:
Changes in excess of outstanding checks
over bank balance 205,000 473,000
Payments on notes payable (435 ,000) (344,000)
Principal payments on capital leases (43,000) (45,000)
Proceeds from sales of common stock under
employee stock purchase plan 41,000 --
Distributions to holders of redeemable
common stock -- (3,150,000)
Payment of offering costs -- (11,000)
----------- -----------
Net cash used in financing
activities (232,000) (3,077,000)
----------- -----------
Net decrease in cash and cash
equivalents (2,416,000) (9,527,000)
Cash and cash equivalents at beginning of the
period 15,511,000 20,633,000
----------- -----------
Cash and cash equivalents at end of the
period $13,095,000 $11,106,000
=========== ===========
Supplemental disclosures of cash flow
information:
Cash paid during the period for:
Interest $ 27,000 $ 31,000
Income taxes 385,000 378,000
Supplemental disclosure of noncash investing
and financing activities:
Equipment acquired under capital leases $ -- $ 1,000
Use of Non-GAAP Financial Measures: Adjusted EBITDA
Adjusted EBITDA is a supplemental measure used by our management to measure our operating performance. We define Adjusted EBITDA as net income plus net interest expense, income tax expense (benefit), depreciation and amortization and loss (gain) on sales of assets. Our definition of Adjusted EBITDA may differ from those of many companies reporting similarly named measures. This measure should be considered in addition to, and not as a substitute for or superior to, other measures of financial performance prepared in accordance with U.S. generally accepted accounting principles, or GAAP, such as operating income and net income. We believe Adjusted EBITDA enables management to separate non-recurring income and expense items from our results of operations to provide a more normalized and consistent view of operating performance on a period-to-period basis. We use Adjusted EBITDA to evaluate our performance for, among other things, budgeting, forecasting and incentive compensation purposes. We also believe Adjusted EBITDA is useful to investors, research analysts, investment bankers and lenders because it removes from our operational results the impact of certain non-recurring income and expense items, which may facilitate comparison of our results from period-to-period.
Adjusted EBITDA is not a recognized term under GAAP and does not purport to be an alternative to operating income or net income as an indicator of operating performance or any other GAAP measure.
For the three months ended March 28, 2008, Adjusted EBITDA was $0.5 million as compared to $(0.6) million for the comparable period last year.
The following is a reconciliation of net income to Adjusted EBITDA (in thousands):
Three Months Ended
--------------------
March 28, March 30,
2008 2007
--------- ---------
Net income (loss) $ 116 $ (250)
Interest income (148) (180)
Interest expense reversal ( 20) (574)
Income tax expense (benefit) 95 (73)
Depreciation and amortization 394 447
Loss on sale of assets 39 9
--------- ---------
Adjusted EBITDA $ 476 $ (621)
========= =========
SOURCE: Willdan Group, Inc.
Willdan Group, Inc. Kimberly Gant, Chief Financial Officer, 714-940-6329 kgant@willdan.com or Financial Profiles, Inc. Moira Conlon, 310-277-4907 mconlon@finprofiles.com
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