UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, DC  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): May 13, 2010

 


 

WILLDAN GROUP, INC.

(Exact name of registrant as specified in its charter)

 

Delaware

 

001-33076

 

14-1951112

(State of other jurisdiction
of incorporation)

 

(Commission File Number)

 

(IRS Employer
Identification No.)

 

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

(Address of Principal Executive Offices)

 

Registrant’s telephone number, including area code: (800) 424-9144

 

Not Applicable

(Former name or former address, if changed since last report)

 


 

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:

 

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.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 Operation and Financial Condition

 

Willdan Group, Inc. (“Willdan”) issued a press release on May 13, 2010.  The press release announced its financial results for the first quarter ended April 2, 2010.  The press release is filed as Exhibit 99.1 and is hereby incorporated by reference in its entirety.  The information in this Form 8-K and the exhibit attached hereto is being furnished (not filed) under Item 2.02 of Form 8-K.

 

Item 9.01                                             Financial Statements and Exhibits

 

(d)                               Exhibits.

 

99.1                           Press Release of Willdan Group, Inc. dated May 13, 2010 (financial results for the first quarter ended April 2, 2010)

 

2



 

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: May 13, 2010

 

By:

/s/ Kimberly D. Gant

 

 

 

Kimberly D. Gant

 

 

 

Chief Financial Officer

 

3



 

EXHIBIT INDEX

 

Exhibit No.

 

Document

 

 

 

99.1

 

Press Release of Willdan Group, Inc. dated May 13, 2010

 

 

 

 

 

(Financial results for the first quarter ended April 2, 2010)

 

4


Exhibit 99.1

 

 

Willdan Reports First Quarter 2010 Financial Results

 

ANAHEIM, Calif., May 13, 2010 (BUSINESS WIRE) — Willdan Group, Inc. (“Willdan”) (NASDAQ:WLDN), today announced financial results for its first quarter ended April 2, 2010.

 

For the first quarter of 2010, Willdan reported total contract revenue of $17.0 million and net income of $0.4 million, or $0.05 per share.

 

Tom Brisbin, Willdan’s Chief Executive Officer, stated: “We’re pleased with the incremental improvement in our first quarter financial performance.  These results reflect a continued strong contribution from our Engineering Services and Homeland Security Services segments.  Importantly, they also reflect the decisive steps we have taken over the past 24 months to position Willdan for profitable growth.

 

“We believe we have reached an inflection point where our diversified business model will offset weakness in our traditional engineering business.  While the economic recovery is far from complete, we are optimistic that we’ll see continued improvements in our financial performance going forward.”

 

First Quarter 2010 Results

 

For the first quarter of fiscal 2010, revenue was $17.0 million, down $0.2 million, or 1.4%, from revenue of $17.2 million for the comparable period last year.  On a sequential basis, revenue was up $2.6 million, or 17.9%, from the fourth quarter of 2009.  Income from operations was $0.4 million for the first quarter of fiscal 2010, as compared to loss from operations of $0.7 million for the comparable period last year.  On a sequential basis, income from operations was up $4.4 million, or 109.7%, from a loss from operations of $4.0 million for the fourth quarter of 2009.

 

Net income was $0.4 million for the first quarter of fiscal 2010, as compared to a net loss of $0.5 million in the comparable period last year and a net loss of $3.3 million in the fourth quarter of 2009.

 

Basic and diluted income per share for the first quarter of fiscal 2010 was $0.05 as compared to a loss per share of $0.06 for the comparable period last year.

 

Willdan used $1.3 million in cash flow from operations in the first quarter of fiscal year 2010.

 



 

 

 

Three Months Ended

 

In thousands (except per share data)

 

April 2,
2010

 

April 3,
2009

 

Revenue

 

$

16,951

 

$

17,185

 

 

 

 

 

 

 

Income (loss) from operations

 

385

 

(705

)

Interest income

 

5

 

12

 

Interest expense

 

(8

)

(11

)

Other, net

 

10

 

 

Income tax benefit

 

 

(250

)

Net income (loss)

 

$

392

 

$

(454

)

 

 

 

 

 

 

Basic and diluted earnings (loss) per share

 

$

0.05

 

$

(0.06

)

 

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

Basic

 

7,223

 

7,169

 

Diluted

 

7,230

 

7,169

 

 

Use of Non-GAAP Financial Measures

 

Adjusted EBITDA is a supplemental measure used by Willdan’s management to measure its operating performance. Willdan defines Adjusted EBITDA as net income (loss) plus net interest expense, income tax (benefit) expense, depreciation and amortization, goodwill impairment expense, lease abandonment expense, loss (gain) on sales of assets and litigation (reversals) accruals. Willdan’s 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 net income. Willdan believes Adjusted EBITDA enables management to separate unusual or infrequent income and expense items from its results of operations to provide a more normalized and consistent view of operating performance on a period-to-period basis. Willdan uses Adjusted EBITDA to evaluate its performance for, among other things, budgeting, forecasting and incentive compensation purposes. Willdan also believes Adjusted EBITDA is useful to investors, research analysts, investment bankers and lenders because it removes from its operational results the impact of certain unusual or infrequent income and expense items, which may facilitate comparison of its results from period-to-period.

 

Adjusted EBITDA is not a recognized term under GAAP and does not purport to be an alternative to income from operations or net income as an indicator of operating performance or any other GAAP measure.

 

Adjusted EBITDA increased $0.8 million to $0.6 million for the three months ended April 2, 2010 from $(0.2) million for the comparable period last year.

 



 

The following is a reconciliation of net income (loss) to Adjusted EBITDA:

 

 

 

Three Months Ended

 

In thousands

 

April 2,
2010

 

April 3,
2009

 

 

 

 

 

 

 

Net income (loss)

 

$

392

 

$

(454

)

Interest income

 

(5

)

(12

)

Interest expense

 

8

 

11

 

Gain on sale of assets

 

(6

)

 

Income tax benefit

 

 

(250

)

Depreciation and amortization

 

271

 

525

 

Lease abandonment expense, net

 

(11

)

(8

)

Adjusted EBITDA

 

$

649

 

$

(188

)

 

Liquidity and Capital Resources

 

Willdan had $7.3 million in cash and cash equivalents at April 2, 2010, compared with $8.4 million at January 1, 2010. Willdan has a $5.0 million revolving line of credit under a credit agreement with its bank.  At April 2, 2010, there was $1.0 million in outstanding borrowings under this agreement.  Unless otherwise extended, the credit agreement matures on January 1, 2011.

 

Conference Call and Webcast

 

Chief Executive Officer Thomas Brisbin and Chief Financial Officer Kimberly Gant plan to host a conference call on May 13, 2010, at 5:00 p.m. Eastern/2:00 p.m. Pacific to further discuss Willdan’s financial results.

 

Interested parties may participate in the conference call by dialing 888-549-7750 (480-629-9866 for international callers).  When prompted, ask for the “Willdan Group, Inc., First Quarter 2010 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 27, 2010, by dialing 800-406-7325 (303-590-3030 for international callers).  The replay access code is 4290753.  The webcast replay will be available on Willdan’s website for 12 months.

 

About Willdan Group, Inc.

 

Founded over 40 years ago, Willdan is a provider of outsourced services to public and private agencies and utilities located primarily in California and New York. Willdan assists cities, public utilities and other government agencies and, to a lesser extent, private industry with a broad

 



 

range of services, including civil engineering, building and safety services, geotechnical engineering, energy efficiency, water conservation, renewable resource strategy, financial and economic consulting, and disaster preparedness and homeland security. For additional information, visit Willdan’s website at www.willdan.com.

 

Forward-Looking Statements

 

Safe Harbor Statement: Statements in this press release which are not purely historical, including statements regarding Willdan’s intentions, hopes, beliefs, expectations, representations, projections, estimates, plans or predictions of the future are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The forward-looking statements involve risks and uncertainties including, but not limited to, the risk that Willdan 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 Willdan’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. Willdan’s business could be affected by a number of other factors, including the risk factors listed from time to time in Willdan’s SEC reports including, but not limited to, the Form 10-K annual report for the year ended January 1, 2010 filed on March 30, 2010. Willdan cautions investors not to place undue reliance on the forward-looking statements contained in this press release. Willdan disclaims any obligation to, and does not undertake to, update or revise any forward-looking statements in this press release.

 

SOURCE:  Willdan Group, Inc.

 

Contact:

 

Willdan Group, Inc.

Kimberly Gant

Chief Financial Officer

Tel:  714-940-6329

kgant@willdan.com

 

or

 

Financial Profiles, Inc.

Moira Conlon

Tel: 310-478-2700 x11

mconlon@finprofiles.com

 



 

WILLDAN GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

 

 

 

April 2,
2010

 

January 1,
2010

 

 

 

 

 

 

 

Assets

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

 

$

7,292,000

 

$

8,445,000

 

Accounts receivable, net of allowance for doubtful accounts of $1,106,000 and $1,862,000 at April 2, 2010 and January 1, 2010, respectively

 

8,616,000

 

10,097,000

 

Costs and estimated earnings in excess of billings on uncompleted contracts

 

10,442,000

 

6,649,000

 

Income tax receivable

 

51,000

 

51,000

 

Other receivables

 

49,000

 

73,000

 

Prepaid expenses and other current assets

 

1,907,000

 

1,500,000

 

Total current assets

 

28,357,000

 

26,815,000

 

 

 

 

 

 

 

Equipment and leasehold improvements, net

 

1,515,000

 

1,596,000

 

Goodwill

 

10,371,000

 

10,371,000

 

Other intangible assets, net

 

136,000

 

149,000

 

Other assets

 

335,000

 

318,000

 

Deferred income taxes, net of current portion

 

1,083,000

 

1,083,000

 

Total assets

 

$

41,797,000

 

$

40,332,000

 

 

 

 

 

 

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Excess of outstanding checks over bank balance

 

$

816,000

 

$

488,000

 

Accounts payable

 

940,000

 

1,457,000

 

Accrued liabilities

 

5,896,000

 

4,509,000

 

Billings in excess of costs and estimated earnings on uncompleted contracts

 

885,000

 

1,030,000

 

Borrowings under line of credit

 

1,000,000

 

1,000,000

 

Current portion of notes payable

 

8,000

 

23,000

 

Current portion of capital lease obligations

 

121,000

 

125,000

 

Current portion of deferred income taxes

 

1,479,000

 

1,479,000

 

Total current liabilities

 

11,145,000

 

10,111,000

 

 

 

 

 

 

 

Capital lease obligations, less current portion

 

87,000

 

82,000

 

Deferred lease obligations

 

929,000

 

1,022,000

 

Total liabilities

 

12,161,000

 

11,215,000

 

 

 

 

 

 

 

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: 7,229,000 and 7,208,000 shares issued and outstanding at April 2, 2010 and January 1, 2010, respectively

 

72,000

 

72,000

 

Additional paid-in capital

 

33,567,000

 

33,440,000

 

Accumulated deficit

 

(4,003,000

)

(4,395,000

)

Total stockholders’ equity

 

29,636,000

 

29,117,000

 

Total liabilities and stockholders’ equity

 

$

41,797,000

 

$

40,332,000

 

 



 

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

 

 

 

Three Months Ended

 

 

 

April 2,
2010

 

April 3,
2009

 

 

 

 

 

 

 

Contract revenue

 

$

16,951,000

 

$

17,185,000

 

 

 

 

 

 

 

Direct costs of contract revenue (exclusive of depreciation and amortization shown separately below):

 

 

 

 

 

Salaries and wages

 

5,014,000

 

4,790,000

 

Sub-consultant services

 

1,937,000

 

2,426,000

 

Other direct costs

 

1,342,000

 

1,087,000

 

Total direct costs of contract revenue

 

8,293,000

 

8,303,000

 

Gross profit

 

8,658,000

 

8,882,000

 

 

 

 

 

 

 

General and administrative expenses:

 

 

 

 

 

Salaries and wages, payroll taxes and employee benefits

 

4,442,000

 

5,482,000

 

Facilities and facilities related

 

1,094,000

 

1,138,000

 

Stock-based compensation

 

80,000

 

69,000

 

Depreciation and amortization

 

271,000

 

525,000

 

Other

 

2,386,000

 

2,373,000

 

Total general and administrative expenses

 

8,273,000

 

9,587,000

 

Income (loss) from operations

 

385,000

 

(705,000

)

 

 

 

 

 

 

Other income (expense), net:

 

 

 

 

 

Interest income

 

5,000

 

12,000

 

Interest expense

 

(8,000

)

(11,000

)

Other, net

 

10,000

 

 

Total other income, net

 

7,000

 

1,000

 

Income (loss) before income tax expense

 

392,000

 

(704,000

)

 

 

 

 

 

 

Income tax benefit

 

 

(250,000

)

Net income (loss)

 

$

392,000

 

$

(454,000

)

 

 

 

 

 

 

Earnings (loss) per share:

 

 

 

 

 

Basic and diluted

 

$

0.05

 

$

(0.06

)

 

 

 

 

 

 

Weighted-average shares outstanding:

 

 

 

 

 

Basic

 

7,223,000

 

7,169,000

 

Diluted

 

7,230,000

 

7,169,000

 

 



 

WILLDAN GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

 

 

 

Three Months Ended

 

 

 

April 2,
2010

 

April 3,
2009

 

Cash flows from operating activities:

 

 

 

 

 

Net income (loss)

 

$

392,000

 

$

(454,000

)

Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities:

 

 

 

 

 

Depreciation and amortization

 

271,000

 

525,000

 

Lease abandonment expense, net

 

(11,000

)

(8,000

)

Gain on sale of equipment

 

(6,000

)

 

Provision for doubtful accounts

 

39,000

 

158,000

 

Stock-based compensation

 

80,000

 

69,000

 

Changes in operating assets and liabilities:

 

 

 

 

 

Accounts receivable

 

1,442,000

 

1,964,000

 

Costs and estimated earnings in excess of billing on uncompleted contracts

 

(3,793,000

)

(213,000

)

Income tax receivable

 

 

(230,000

)

Other receivables

 

24,000

 

(5,000

)

Prepaid expenses and other current assets

 

(407,000

)

(316,000

)

Other assets

 

(17,000

)

17,000

 

Accounts payable

 

(517,000

)

(225,000

)

Accrued liabilities

 

1,387,000

 

185,000

 

Billings in excess of costs and estimated earnings on uncompleted contracts

 

(145,000

)

232,000

 

Deferred lease obligations

 

(83,000

)

(76,000

)

Net cash (used in) provided by operating activities

 

(1,344,000

)

1,623,000

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

Purchase of equipment and leasehold improvements

 

(140,000

)

(55,000

)

Proceeds from sale of equipment

 

8,000

 

 

Payments for business acquisitions, net of cash acquired

 

 

(6,000

)

Net cash used in investing activities

 

(132,000

)

(61,000

)

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

Changes in excess of outstanding checks over bank balance

 

328,000

 

638,000

 

Payments on notes payable

 

(15,000

)

(12,000

)

Borrowings under line of credit

 

1,943,000

 

 

Repayments of line of credit

 

(1,943,000

)

 

Principal payments on capital lease obligations

 

(37,000

)

(50,000

)

Proceeds from sales of common stock under employee stock purchase plan

 

47,000

 

46,000

 

Net cash provided by financing activities

 

323,000

 

622,000

 

Net (decrease) increase in cash and cash equivalents

 

(1,153,000

)

2,184,000

 

Cash and cash equivalents at beginning of the period

 

8,445,000

 

8,144,000

 

Cash and cash equivalents at end of the period

 

$

7,292,000

 

$

10,328,000

 

 

 

 

 

 

 

Supplemental disclosures of cash flow information:

 

 

 

 

 

Cash paid during the period for:

 

 

 

 

 

Interest

 

$

10,000

 

$

11,000

 

Income taxes

 

2,000

 

2,000

 

Supplemental disclosures of noncash investing and financing activities:

 

 

 

 

 

Equipment acquired under capital lease obligations

 

$

38,000

 

$