SEC Filing | Willdan Group, Inc.

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):

November 8, 2007

WILLDAN GROUP, INC.

(Exact Name of Registrant as Specified in Its Charter)

Delaware		001-33076		14,195112
(State or other Jurisdiction of Incorporation or Organization)		(Commission File Number)		(IRS Employer Identification Number)

2401 East Katella Avenue, Suite 300, Anaheim, California 92806

(Address of Principal Executive Office and Zip Code)

(800) 424-9144

(Registrant’s Telephone Number, Including Area Code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. Results of Operations and Financial Condition.

On November 8, 2007, Willdan Group, Inc. (the “Registrant”) reported its results of operations for its third quarter ended September 28, 2007. A copy of the press release issued by the Registrant concerning the foregoing is furnished herewith as Exhibit 99.1 and is incorporated herein by reference.

The information contained herein and in the accompanying exhibit shall not be incorporated by reference into any filing of the Registrant, whether made before or after the date hereof, regardless of any general incorporation language in such filing, unless expressly incorporated by specific reference to such filing. The information in this Current Report, including the exhibit hereto, shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section or Sections 11 and 12(a)(2) of the Securities Act of 1933, as amended.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits

99.1 Press Release, dated November 8, 2007, reporting the results of operations for the Registrant’s third quarter ended September 28, 2007.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

		WILLDAN GROUP, INC.


Date:	November 8, 2007	By:	/s/ Thomas D. Brisbin
			Thomas D. Brisbin
			Chief Executive Officer

Exhibit 99.1

FOR IMMEDIATE RELEASE

Willdan Reports Third Quarter 2007 Financial Results

ANAHEIM, Calif., – (BUSINESS WIRE)–November 8, 2007–Willdan Group, Inc. (“Willdan”) (NASDAQ:WLDN), announces financial results for its third quarter ended September 28, 2007.

For the third quarter of 2007, Willdan reported total contract revenue of $19.7 million and net income of $1.1 million, or $0.15 per basic and diluted share.

Key Operational Highlights for the Third Quarter 2007

• Increased profitability and positive cash flow from operations; and

• Strengthened our business development team through the appointments of Crescent Wells as Director of Marketing Support.

Third Quarter Results

For the third quarter of fiscal 2007, revenue was $19.7 million, down $1.3 million, or 6.0%, from revenue of $21.0 million for the comparable period last year. On a sequential basis, revenue was down $1.5 million, or 7.0% from the second quarter of 2007. Income from operations was $1.7 million for the third quarter of fiscal 2007, down $1.3 million, or 43.1% from the comparable period last year. On a sequential basis, income from operations was flat over the second quarter of 2007 at $1.7 million. Net income was $1.1 million for the third quarter of fiscal 2007, down $1.6 million, or 61.0% from the comparable period last year and was flat on a sequential basis. Our net income decreased in the third quarter of fiscal 2007 compared to the third quarter of fiscal 2006 in part because of a one-time $1.0 million reduction of a litigation accrual the Company recognized in the third quarter of fiscal 2006 related to a favorable litigation judgment. Further, prior to the Company’s initial public offering, or IPO, of its common stock in November 2006, the Company was considered a qualified S Corporation for federal and state income tax purposes. Upon the completion of the IPO, the Company’s S Corporation status terminated and the Company became subject to federal and state income taxes as a C Corporation. Pro forma net income for the third quarter of fiscal 2006 would have been $1.6 million assuming the Company had been taxed during that period as a C Corporation. Basic and diluted earnings per share for the third quarter of fiscal 2007 was $0.15 as compared to $0.57 for the comparable period last year or $0.35 on a pro forma basis giving effect to additional income tax expense.

Willdan generated cash flow from operations of $2.5 million in the third fiscal quarter of 2007.

Nine Months Results

For the nine months ended September 28, 2007, revenue was $60.1 million, up $1.1 million, or 1.8% from revenue of $59.0 million for the comparable period last year. Income from operations was $2.2 million for the first nine months of fiscal 2007, down $3.5 million, or 61.2%, from the comparable period last year. Net income was $1.9 million for the first nine months of fiscal 2007, down $5.6 million, or 75.1% from the comparable period last year. Our net income decreased in the third quarter of fiscal 2007 compared to the third quarter of fiscal 2006 in part because the Company recognized one-time income of $2.3 million for life insurance proceeds received as a result of the death of its former Chief Executive Officer during the nine months ended September 29, 2006 and a one-time $1.0 million reduction of a litigation accrual during the nine months ended September 29, 2006, as previously mentioned. Further, giving effect to additional income tax expense, pro forma net income for the nine months ended September 29, 2006 would have been $5.4 million. Basic and diluted earnings per share for the first nine months of fiscal 2007 was $0.26 as compared to $1.58 for the comparable period last year or $1.15 on a pro forma basis.

	Three Months Ended						Nine Months Ended
In thousands (except EPS data)	Sept 28, 2007			Sept 29, 2006			Sept 28, 2007		Sept 29, 2006
Revenue	$	19,687		$	20,954		$	60,135	$	59,047

Income from operations	1,657			2,912			2,238		5,771
Interest expense	(23		)	(185		)	527		(596		)
Interest income and other, net	197			13			525		2,368
Income tax expense	778			41			1,429		79
Net income	$	1,053		$	2,699		$	1,861	$	7,464

Basic and Diluted EPS:
Net income	$	0.15		$	0.57		$	0.26	$	1.58

Weighted average shares outstanding:
Basic	7,150			4,713			7,148		4,712
Diluted	7,161			4,713			7,154		4,712

Pro Forma Data (1):
Pro forma income tax expense				$	1,096				$	2,117
Pro forma net income				$	1,644				$	5,426

Pro forma EPS, basic and diluted				$	0.35				$	1.15

(1) Assumes the Company was taxed as a C corporation during the three and nine months ended September 29, 2006.

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 revises its previously disclosed outlook of $86 million to $90 million in revenue for its fiscal year 2007 and now expects to report revenue between $78 and $80 million for fiscal year 2007.

Conference Call and Webcast

Chief Executive Officer Thomas Brisbin, Chief Operations Officer Mallory McCamant and Chief Financial Officer Kimberly Gant plan to host a conference call on November 8, 2007 at 5:00 p.m. Eastern/2:00 p.m. Pacific to further discuss the Company’s financial results and business developments.

Interested parties may access the conference call by dialing 800-218-0204 (303-262-2191 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.willdangroup.com under Investor Relations: Events.

The telephonic replay of the conference call may be accessed approximately two hours after the call through November 22, 2007, by dialing 800-405-2236 (303-590-3000 for international callers). The replay access code is 11101325#. 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.willdangroup.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 29, 2006 filed on March 27, 2007. 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.

Contact:

Mallory McCamant

Chief Operations Officer

Tel: 714-940-6327

mallory@willdangroup.com

Kimberly Gant

Chief Financial Officer

Tel: 714-940-6329

kgant@willdangroup.com

WILLDAN GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

	December 29, 2006		September 28, 2007
			(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	20,633,000	$	6,207,000
Liquid investments	—		9,000,000
Cash, cash equivalents and liquid investments	20,633,000		15,207,000
Accounts receivable, net of allowance for doubtful accounts of $492,000 and $650,000 at December 29, 2006 and September 28, 2007, respectively	14,270,000		14,364,000
Costs and estimated earnings in excess of billings on uncompleted contracts	7,960,000		7,738,000
Other receivables	4,505,000		1,376,000
Prepaid expenses and other current assets	1,858,000		1,025,000
Total current assets	49,226,000		39,710,000
Equipment and leasehold improvements, net	4,372,000		3,690,000
Goodwill	2,911,000		2,911,000
Other assets	599,000		525,000
Total assets	$	57,108,000	$	46,836,000

Liabilities and Stockholders’ Equity
Current liabilities:
Excess of outstanding checks over bank balance	$	257,000	$	1,089,000
Borrowings under line of credit	—		31,000
Accounts payable	1,270,000		1,003,000
Accrued liabilities	14,106,000		5,477,000
Billings in excess of costs and estimated earnings on uncompleted contracts	1,222,000		1,112,000
Accrued final distribution payable to holders of redeemable common stock	3,150,000		—
Current portion of notes payable	993,000		23,000
Current portion of notes payable to related parties	75,000		—
Current portion of capital lease obligations	170,000		178,000
Current portion of deferred income taxes	1,693,000		1,693,000
Total current liabilities	22,936,000		10,606,000

Notes payable to related parties, less current portion	46,000		—
Capital lease obligations, less current portion	348,000		300,000
Deferred lease obligations	547,000		658,000
Deferred income taxes, net of current portion	398,000		398,000

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: 7,148,000 and 7,150,000 shares issued and outstanding at December 29, 2006 and September 28, 2007 respectively	71,000		71,000
Additional paid-in capital	32,552,000		32,732,000
Retained earnings	210,000		2,071,000
Total stockholders’ equity	32,833,000		34,874,000
Total liabilities and stockholders’ equity	$	57,108,000	$	46,836,000

WILLDAN GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	Three Months Ended						Nine Months Ended
	September 29, 2006			September 28, 2007			September 29, 2006			September 28, 2007

Contract revenues	$	20,954,000		$	19,687,000		$	59,047,000		$	60,135,000

Direct costs of contract revenues:
Salaries and wages	6,412,000			6,414,000			18,570,000			19,815,000
Production expenses	381,000			432,000			1,149,000			1,229,000
Subconsultant services	1,206,000			1,187,000			3,166,000			3,438,000
Total direct costs of contract revenues	7,999,000			8,033,000			22,885,000			24,482,000

General and administrative expenses:
Salaries and wages, payroll taxes and employee benefits	6,616,000			5,916,000			19,661,000			19,260,000
Facilities	1,116,000			1,145,000			2,979,000			3,405,000
Depreciation and amortization	414,000			439,000			1,137,000			1,335,000
Litigation accrual reversal	(1,049,000		)	—			(1,049,000		)	—
Other	2,946,000			2,497,000			7,663,000			9,415,000
Total general and administrative expenses	10,043,000			9,997,000			30,391,000			33,415,000
Income from operations	2,912,000			1,657,000			5,771,000			2,238,000

Other income (expense):
Interest expense	(185,000		)	(23,000		)	(596,000		)	527,000
Interest income and other, net	13,000			197,000			2,368,000			525,000
Total other income (expense)	(172,000		)	174,000			1,772,000			1,052,000
Income before income tax expense	2,740,000			1,831,000			7,543,000			3,290,000

Income tax expense	41,000			778,000			79,000			1,429,000
Net income	$	2,699,000		$	1,053,000		$	7,464,000		$	1,861,000

Net income per share:
Basic and diluted	$	0.57		$	0.15		$	1.58		$	0.26

Weighted-average shares outstanding:
Basic	4,713,000			7,150,000			4,712,000			7,148,000
Diluted	4,713,000			7,161,000			4,712,000			7,154,000

Pro Forma Data:
Pro forma provision for income taxes	$	1,096,000					$	2,117,000
Pro forma net income	$	1,644,000					$	5,426,000
Pro forma income per common share, basic and diluted	$	0.35					$	1.15

WILLDAN GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Nine Months Ended
	September 29, 2006			September 28, 2007
Cash flows from operating activities:
Net income	$	7,464,000		$	1,861,000
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization	1,138,000			1,342,000
Loss (gain) on sale of equipment	(13,000		)	4,000
Allowance for doubtful accounts	406,000			194,000
Stock-based compensation	—			145,000
Changes in operating assets and liabilities:
Accounts receivable	(2,301,000		)	(288,000		)
Costs and estimated earnings in excess of billing on uncompleted contracts	(800,000		)	222,000
Other receivables	(1,030,000		)	3,129,000
Prepaid expenses and other current assets	424,000			833,000
Other assets	(60,000		)	52,000
Accounts payable	906,000			(267,000		)
Accrued liabilities	(517,000		)	(8,629,000		)
Billings in excess of costs and estimated earnings on uncompleted contracts	144,000			(110,000		)
Deferred income taxes	48,000			—
Deferred lease obligations	141,000			111,000
Net cash provided by (used in) operating activities	5,950,000			(1,401,000		)

Cash flows from investing activities:
Purchase of equipment and leasehold improvements	(2,418,000		)	(582,000		)
Proceeds from sale of equipment	4,000			28,000
Purchase of other assets	(100,000		)	—
Purchase of liquid investments	—			(16,100,000		)
Proceeds from sale of liquid investments	—			7,100,000
Net cash used in investing activities	(2,514,000		)	(9,554,000		)

Cash flows from financing activities:
Changes in excess of outstanding checks over bank balance	(78,000		)	832,000
Payments on notes payable	(1,128,000		)	(1,091,000		)
Proceeds from borrowings under line of credit	11,655,000			378,000
Repayments of line of credit	(11,655,000		)	(347,000		)
Principal payments on capital leases	(117,000		)	(127,000		)
Payments on liabilities to stockholders	(3,000		)	—
Proceeds from stockholders receivables	34,000			—
Proceeds from issuance of redeemable common stock	18,000			—
Proceeds from employee stock purchase plan	—			24,000
Distributions to holders of redeemable common stock	(2,334,000		)	(3,150,000		)
(Payment) refund of offering costs	(1,051,000		)	10,000
Net cash used in financing activities	(4,659,000		)	(3,471,000		)
Net decrease in cash and cash equivalents	(1,223,000		)	(14,426,000		)
Cash and cash equivalents at beginning of the period	3,066,000			20,633,000
Cash and cash equivalents at end of the period	$	1,843,000		$	6,207,000

Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest	$	126,000		$	63,000
Income taxes	55,000			875,000
Supplemental disclosures of noncash investing and financing activities:
Equipment acquired under capital leases	$	349,000		$	120,000
Note payable issued in connection with acquisition of assets	150,000			—