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): March 29, 2011

 


 

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 March 29, 2011. The press release announced its financial results for the fourth quarter and fiscal year ended December 31, 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 March 29, 2011 (financial results for the fourth quarter and fiscal year ended December 31, 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: March 29, 2011

 

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 March 29, 2011 (Financial results for the fourth quarter and fiscal year ended December 31, 2010)

 

4


Exhibit 99.1

 

 

Willdan Reports Fourth Quarter 2010 and Fiscal Year 2010 Financial Results

 

ANAHEIM, Calif., March 29, 2011—(BUSINESS WIRE)—Willdan Group, Inc. (“Willdan”) (NASDAQ:WLDN), today announced financial results for its fourth quarter and fiscal year 2010 ended December 31, 2010.

 

For the fourth quarter of 2010, Willdan reported total contract revenue of $19.9 million and net income of $0.3 million, or $0.04 per basic and diluted share.

 

For the fiscal year ended December 31, 2010, Willdan reported total contract revenue of $77.9 million and net income of $2.7 million, or $0.38 per basic share and $0.37 per diluted share.

 

Tom Brisbin, Willdan’s Chief Executive Officer, stated: “During the fourth quarter, we continued to execute on our strategy to diversify our business in order to position Willdan to win new and different types of work. We have made and will continue to make investments to further growth. Looking ahead, we expect outsourcing for engineering to grow in California as cities focus on finding innovative ways to provide services cost effectively and efficiently. We expect to see strong growth in our energy efficiency and sustainability business. Both our homeland security and financial services businesses have optimistic growth potential. Our revenue has returned to pre-recession levels and we expect continued organic growth in 2011. Based upon our planned investments in the first half of the year, we expect higher profitability in the second half of the year.”

 

Fourth Quarter 2010 Results

 

For the fourth quarter of fiscal 2010, revenue was $19.9 million, up $5.5 million, or 38.2%, from revenue of $14.4 million for the comparable period last year. On a sequential basis, revenue was down $0.8 million, or 4.0%, from the third quarter of 2010. Income from operations was $30,000 for the fourth quarter of fiscal 2010, as compared to a loss from operations of $4.0 million for the comparable period last year. On a sequential basis, income from operations decreased $1.4 million from $1.4 million in the third quarter of 2010.

 

Net income was $0.3 million for the fourth quarter of fiscal 2010, as compared to a net loss of $3.3 million in the comparable period last year and net income of $0.8 million in the third quarter of 2010.

 

i



 

Basic and diluted earnings per share for the fourth quarter of fiscal 2010 were $0.04 as compared to basic and diluted loss per share of $0.46 for the comparable period last year.

 

Willdan used $1.2 million in cash flow from operations in the fourth quarter of fiscal year 2010.

Fiscal Year 2010 Results

 

Revenue for fiscal year 2010 was $77.9 million, up $16.3 million, or 26.4%, from revenue of $61.6 million for fiscal year 2009. Income from operations was $3.1 million for fiscal year 2010 as compared to a loss from operations of $7.5 million for fiscal year 2009. Net income was $2.7 million for fiscal year 2010 as compared to a net loss of $5.6 million for fiscal year 2009.

 

Basic and diluted earnings per share for fiscal year 2010 were $0.38 and $0.37, respectively, as compared to basic and diluted loss per share of $0.78 for fiscal year 2009.

 

Willdan generated $0.1 million in cash flow from operations in the twelve months ended December 31, 2010.

 

 

 

Three Months Ended

 

Twelve Months Ended

 

In thousands (except EPS data)

 

December 31,
 2010

 

January 1,
2010

 

December 31,
 2010

 

January 1,
2010

 

Revenue

 

$

19,872

 

$

14,375

 

$

77,896

 

$

61,605

 

 

 

 

 

 

 

 

 

 

 

Income (loss) from operations

 

30

 

(3,970

)

3,074

 

(7,493

)

Interest income

 

3

 

3

 

12

 

30

 

Interest expense

 

(17

)

(9

)

(54

)

(38

)

Other, net

 

15

 

(4

)

32

 

(5

)

Income tax (benefit) expense

 

(251

)

(635

)

344

 

(1,931

)

Net income (loss)

 

$

282

 

$

(3,345

)

$

2,720

 

$

(5,575

)

 

 

 

 

 

 

 

 

 

 

Earnings (loss) per share

 

 

 

 

 

 

 

 

 

Basic

 

$

0.04

 

$

(0.46

)

$

0.38

 

$

(0.78

)

Diluted

 

$

0.04

 

$

(0.46

)

$

0.37

 

$

(0.78

)

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

Basic

 

7,245

 

7,208

 

7,233

 

7,192

 

Diluted

 

7,380

 

7,208

 

7,311

 

7,192

 

 

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 expense (benefit), depreciation and amortization, goodwill impairment expense, lease abandonment (recovery) expense, loss (gains) on sales of assets, and accrued expenses related to a litigation matter. 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

 

ii



 

GAAP, such as net income. Willdan believes Adjusted EBITDA enables management to separate non-recurring 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 non-recurring 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 operating income or net income as an indicator of operating performance or any other GAAP measure.

 

Adjusted EBITDA increased to $4.1 million for fiscal year 2010 from $(3.3) million for fiscal year 2009.

 

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

 

 

 

Twelve Months Ended

 

In thousands

 

December 31,
2010

 

January 1,
2010

 

 

 

 

 

 

 

Net income (loss)

 

$

2,720

 

$

(5,575

)

Interest income

 

(12

)

(30

)

Interest expense

 

54

 

38

 

Income tax expense (benefit)

 

344

 

(1,931

)

Lease abandonment (recovery) expense

 

(68

)

707

 

Goodwill impairment

 

 

2,763

 

Depreciation and amortization

 

1,053

 

1,814

 

(Gain) loss on sale of assets

 

(17

)

6

 

Litigation accrual

 

 

(1,125

)

Adjusted EBITDA

 

$

4,074

 

$

(3,333

)

 

Liquidity and Capital Resources

 

Willdan had $6.6 million in cash and cash equivalents at December 31, 2010, compared with $8.4 million at January 1, 2010. Willdan has a $5.0 million bank revolving line of credit, with $1.0 million in outstanding borrowings at the end of fiscal year 2010.

 

Conference Call and Webcast

 

Chief Executive Officer Thomas Brisbin and Chief Financial Officer Kimberly Gant plan to host a conference call on March 29, 2011 at 5:00 p.m. Eastern/2:00 p.m. Pacific to discuss Willdan’s financial results.

 

Interested parties may participate in the conference call by dialing 866-225-8754 (480-629-9692 for international callers). When prompted, ask for the “Willdan Group, Inc., Fourth Quarter 2010 Conference Call.” The conference call will be webcast simultaneously on Willdan’s website at www.willdan.com under Investors: Events.

 

iii



 

The telephonic replay of the conference call may be accessed approximately two hours after the call through April 12, 2011, by dialing 800-406-7325 (303-590-3030 for international callers).  The replay access code is 4408822. The webcast replay will be archived for 12 months.

 

About Willdan Group, Inc.

 

Founded over 45 years ago, Willdan is a provider of professional technical and consulting services to small and mid-sized public agencies, large public utilities and, to a lesser extent, private industry primarily located in California, New York and Arizona. Willdan provides a broad range of services to clients, including civil engineering and planning, energy efficiency and sustainability, economic and financial consulting, and homeland security and communications and technology. 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 December 31, 2010 filed on March 29, 2011. 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.

 

iv



 

WILLDAN GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

 

 

 

December 31,
2010

 

January 1,
2010

 

Assets

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

 

$

6,642,000

 

$

8,445,000

 

Accounts receivable, net of allowance for doubtful accounts of $959,000 and $1,862,000 at December 31, 2010 and January 1, 2010, respectively

 

14,484,000

 

10,097,000

 

Costs and estimated earnings in excess of billings on uncompleted contracts

 

11,343,000

 

6,649,000

 

Income tax receivable

 

 

51,000

 

Other receivables

 

176,000

 

73,000

 

Prepaid expenses and other current assets

 

1,714,000

 

1,500,000

 

Total current assets

 

34,359,000

 

26,815,000

 

 

 

 

 

 

 

Equipment and leasehold improvements, net

 

1,496,000

 

1,596,000

 

Goodwill

 

12,475,000

 

10,371,000

 

Other intangible assets, net

 

95,000

 

149,000

 

Other assets

 

407,000

 

318,000

 

Deferred income taxes, net of current portion

 

622,000

 

1,083,000

 

Total assets

 

$

49,454,000

 

$

40,332,000

 

 

 

 

 

 

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Excess of outstanding checks over bank balance

 

$

1,223,000

 

$

488,000

 

Borrowings under line of credit

 

1,000,000

 

1,000,000

 

Accounts payable

 

5,380,000

 

1,457,000

 

Accrued liabilities

 

5,985,000

 

4,509,000

 

Billings in excess of costs and estimated earnings on uncompleted contracts

 

1,041,000

 

1,030,000

 

Current portion of notes payable

 

90,000

 

23,000

 

Current portion of capital lease obligations

 

173,000

 

125,000

 

Current portion of deferred income taxes

 

1,407,000

 

1,479,000

 

Total current liabilities

 

16,299,000

 

10,111,000

 

 

 

 

 

 

 

Notes payable, less current portion

 

131,000

 

 

Capital lease obligations, less current portion

 

96,000

 

82,000

 

Deferred lease obligations

 

766,000

 

1,022,000

 

Total liabilities

 

17,292,000

 

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; 7,246,000 and 7,208,000 shares issued and outstanding at December 31, 2010 and January 1, 2010, respectively

 

72,000

 

72,000

 

Additional paid-in capital

 

33,765,000

 

33,440,000

 

Accumulated deficit

 

(1,675,000

)

(4,395,000

)

Total stockholders’ equity

 

32,162,000

 

29,117,000

 

Total liabilities and stockholders’ equity

 

$

49,454,000

 

$

40,332,000

 

 

v



 

WILLDAN GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

 

 

 

Fiscal Year

 

 

 

2010

 

2009

 

2008

 

 

 

 

 

 

 

 

 

Contract revenue

 

$

77,896,000

 

$

61,605,000

 

$

73,190,000

 

 

 

 

 

 

 

 

 

Direct costs of contract revenue:

 

 

 

 

 

 

 

Salaries and wages

 

21,607,000

 

18,130,000

 

21,991,000

 

Subconsultant services

 

16,523,000

 

7,997,000

 

7,750,000

 

Other direct costs

 

3,892,000

 

2,715,000

 

2,973,000

 

Total direct costs of contract revenue

 

42,022,000

 

28,842,000

 

32,714,000

 

Gross profit

 

35,874,000

 

32,763,000

 

40,476,000

 

 

 

 

 

 

 

 

 

General and administrative expenses:

 

 

 

 

 

 

 

Salaries and wages, payroll taxes and employee benefits

 

17,582,000

 

20,325,000

 

24,439,000

 

Facilities and facility related

 

4,290,000

 

4,430,000

 

4,803,000

 

Stock-based compensation

 

235,000

 

272,000

 

214,000

 

Depreciation and amortization

 

1,042,000

 

1,814,000

 

1,978,000

 

Lease (recovery) abandonment, net

 

(68,000

)

707,000

 

742,000

 

Impairment of goodwill

 

 

2,763,000

 

148,000

 

Litigation reversal

 

 

(1,125,000

)

 

Other

 

9,719,000

 

11,070,000

 

10,952,000

 

Total general and administrative expenses

 

32,800,000

 

40,256,000

 

43,276,000

 

Income (loss) from operations

 

3,074,000

 

(7,493,000

)

(2,800,000

)

 

 

 

 

 

 

 

 

Other (expense) income:

 

 

 

 

 

 

 

Interest income

 

12,000

 

30,000

 

313,000

 

Interest expense

 

(54,000

)

(38,000

)

(33,000

)

Other, net

 

32,000

 

(5,000

)

(15,000

)

Total other (expense) income, net

 

(10,000

)

(13,000

)

265,000

 

Income (loss) before income taxes

 

3,064,000

 

(7,506,000

)

(2,535,000

)

 

 

 

 

 

 

 

 

Income tax expense (benefit)

 

344,000

 

(1,931,000

)

(930,000

)

Net income (loss)

 

$

2,720,000

 

$

(5,575,000

)

$

(1,605,000

)

 

 

 

 

 

 

 

 

Earnings (loss) per share:

 

 

 

 

 

 

 

Basic

 

$

0.38

 

$

(0.78

)

$

(0.22

)

Diluted

 

$

0.37

 

$

(0.78

)

$

(0.22

)

 

 

 

 

 

 

 

 

Weighted-average shares outstanding:

 

 

 

 

 

 

 

Basic

 

7,233,000

 

7,192,000

 

7,159,000

 

Diluted

 

7,311,000

 

7,192,000

 

7,159,000

 

 

vi



 

WILLDAN GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

 

 

 

Fiscal Year

 

 

 

2010

 

2009

 

2008

 

Cash flows from operating activities:

 

 

 

 

 

 

 

Net income (loss)

 

$

2,720,000

 

$

(5,575,000

)

$

(1,605,000

)

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

 

 

 

 

 

 

 

Depreciation and amortization

 

1,053,000

 

1,814,000

 

1,978,000

 

Deferred income taxes

 

389,000

 

(1,890,000

)

(112,000

)

Goodwill impairment

 

 

2,763,000

 

148,000

 

Lease (recovery) abandonment expense, net

 

(68,000

)

707,000

 

742,000

 

(Gain) loss on sale of equipment

 

(17,000

)

6,000

 

17,000

 

Provision for doubtful accounts

 

20,000

 

1,829,000

 

585,000

 

Stock-based compensation

 

235,000

 

272,000

 

214,000

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

Accounts receivable

 

(4,407,000

)

936,000

 

3,266,000

 

Costs and estimated earnings in excess of billings on uncompleted contracts

 

(4,694,000

)

1,632,000

 

187,000

 

Income tax receivable

 

51,000

 

905,000

 

(956,000

)

Other receivables

 

(103,000

)

(25,000

)

53,000

 

Prepaid expenses and other current assets

 

(214,000

)

284,000

 

292,000

 

Other assets

 

(89,000

)

55,000

 

50,000

 

Accounts payable

 

3,923,000

 

(654,000

)

(186,000

)

Accrued liabilities

 

1,476,000

 

(959,000

)

(831,000

)

Billings in excess of costs and estimated earnings on uncompleted contracts

 

11,000

 

326,000

 

(236,000

)

Deferred lease obligations

 

(189,000

)

(272,000

)

(60,000

)

Net cash provided by operating activities

 

97,000

 

2,154,000

 

3,546,000

 

 

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

 

 

Purchase of equipment and leasehold improvements

 

(685,000

)

(386,000

)

(552,000

)

Proceeds from sale of equipment

 

40,000

 

 

49,000

 

Purchase of other assets

 

 

 

(75,000

)

Payments related to business acquisitions

 

(2,104,000

)

(2,373,000

)

(10,236,000

)

Purchase of liquid investments

 

 

 

(7,100,000

)

Proceeds from sale of liquid investments

 

 

 

8,400,000

 

Net cash used in investing activities

 

(2,749,000

)

(2,759,000

)

(9,514,000

)

 

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

 

 

Changes in excess of outstanding checks over bank balance

 

735,000

 

40,000

 

(185,000

)

Payments on notes payable

 

(17,000

)

(46,000

)

(1,119,000

)

Proceeds from notes payable

 

214,000

 

 

 

Borrowings under line of credit

 

14,123,000

 

3,553,000

 

 

Repayments of line of credit

 

(14,123,000

)

(2,553,000

)

 

Principal payments on capital leases

 

(173,000

)

(172,000

)

(170,000

)

Proceeds from stock option exercise

 

3,000

 

 

 

Proceeds from sales of common stock under employee stock purchase plan

 

87,000

 

84,000

 

75,000

 

Net cash provided by (used in) financing activities

 

849,000

 

906,000

 

(1,399,000

)

 

 

 

 

 

 

 

 

Net (decrease) increase in cash and cash equivalents

 

(1,803,000

)

301,000

 

(7,367,000

)

Cash and cash equivalents at beginning of the year

 

8,445,000

 

8,144,000

 

15,511,000

 

Cash and cash equivalents at end of the year

 

$

6,642,000

 

$

8,445,000

 

$

8,144,000

 

 

 

 

 

 

 

 

 

Supplemental disclosures of cash flow information:

 

 

 

 

 

 

 

Cash paid during the period for:

 

 

 

 

 

 

 

Interest

 

$

52,000

 

$

40,000

 

$

34,000

 

Income taxes

 

48,000

 

3,000

 

853,000

 

Supplemental disclosures of noncash investing and financing activities:

 

 

 

 

 

 

 

Equipment acquired under capital leases

 

$

240,000

 

$

60,000

 

$

42,000

 

Note payable issued in connection with acquisition of assets

 

 

 

100,000

 

Purchase price payable

 

 

 

1,000,000

 

 

vii



 

Contact:

 

Willdan Group, Inc.

Kimberly Gant

Chief Financial Officer

Tel: 714-940-6300

kgant@willdan.com

 

or

 

Financial Profiles, Inc.

Moira Conlon

Tel: 310-478-2700 x11

mconlon@finprofiles.com

 

viii