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 10, 2012
WILLDAN GROUP, INC.
(Exact name of registrant as specified in its charter)
|
Delaware |
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001-33076 |
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14-1951112 |
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(State of other jurisdiction |
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(Commission File Number) |
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(IRS Employer |
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 10, 2012. The press release announced its financial results for the first quarter ended March 30, 2012. 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 10, 2012 (financial results for the first quarter ended March 30, 2012).
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.
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WILLDAN GROUP, INC. | |
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Date: May 10, 2012 |
By: |
/s/ Kimberly D. Gant |
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Kimberly D. Gant |
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Chief Financial Officer |
EXHIBIT INDEX
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Exhibit No. |
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Document |
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99.1 |
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Press Release of Willdan Group, Inc. dated May 10, 2012 (Financial results for the first quarter ended March 30, 2012) |
Exhibit 99.1
Willdan Reports First Quarter 2012 Financial Results
ANAHEIM, Calif., May 10, 2012 (BUSINESS WIRE) — Willdan Group, Inc. (“Willdan”) (NASDAQ:WLDN), today announced financial results for its first quarter ended March 30, 2012.
For the first quarter of 2012, Willdan reported total contract revenue of $25.5 million and a net loss of $1.4 million, or $0.19 per share.
Tom Brisbin, Willdan’s Chief Executive Officer, stated: “Our core engineering services business was slower than anticipated in the first quarter. Our results were also impacted by project delays in our energy efficiency business. In spite of a slow start to 2012 and based on our current outlook, we do expect to be profitable for the remainder of the year.”
First Quarter 2012 Results
For the first quarter of fiscal 2012, revenue was $25.5 million, up $2.7 million, or 12.0%, from revenue of $22.7 million for the comparable period last year. On a sequential basis, revenue was down $4.5 million, or 15.1%, from the fourth quarter of 2011. Loss from operations was $2.3 million for the first quarter of fiscal 2012, as compared to loss from operations of $0.3 million for the comparable period last year. On a sequential basis, loss from operations was $2.3 million as compared to income from operations of $0.3 million for the fourth quarter of 2011.
Net loss was $1.4 million for the first quarter of fiscal 2012, as compared to a net loss of $0.3 million for the comparable period last year and a net loss of $0.8 million for the fourth quarter of 2011.
Basic and diluted loss per share for the first quarter of fiscal 2012 was $0.19 as compared to $0.04 for the comparable period last year.
Willdan used $0.8 million in cash flow from operations in the first quarter of fiscal 2012.
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Three Months Ended |
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In thousands (except per share data) |
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March 30, |
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April 1, |
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Revenue |
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$ |
25,468 |
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$ |
22,742 |
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|
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Loss from operations |
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(2,317 |
) |
(280 |
) | ||
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Interest income |
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1 |
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2 |
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Interest expense |
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(22 |
) |
(18 |
) | ||
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Other, net |
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— |
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5 |
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Income tax (benefit) expense |
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(927 |
) |
— |
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Net loss |
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$ |
(1,411 |
) |
$ |
(291 |
) |
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Basic and diluted loss per share |
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$ |
(0.19 |
) |
$ |
(0.04 |
) |
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Weighted average shares outstanding: |
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Basic |
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7,291 |
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7,251 |
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Diluted |
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7,291 |
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7,251 |
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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 loss plus net interest expense, income tax (benefit) expense, depreciation and amortization and other non-recurring income and expense items occurring in such period. 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 decreased $2.1 million to $(2.1) million for the three months ended March 30, 2012 from $10,000 for the comparable period last year.
The following is a reconciliation of net loss to Adjusted EBITDA:
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Three Months Ended |
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In thousands |
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March 30, |
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April 1, |
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Net loss |
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$ |
(1,411 |
) |
$ |
(291 |
) |
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Interest income |
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(1 |
) |
(2 |
) | ||
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Interest expense |
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22 |
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18 |
| ||
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Income tax (benefit) expense |
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(927 |
) |
— |
| ||
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Gain on sale of assets |
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— |
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(2 |
) | ||
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Depreciation and amortization |
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191 |
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274 |
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Lease abandonment expense, net |
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4 |
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13 |
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Adjusted EBITDA |
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$ |
(2,122 |
) |
$ |
10 |
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Liquidity and Capital Resources
Willdan had $5.0 million in cash and cash equivalents at March 30, 2012, compared with $3.0 million at December 30, 2011. Willdan has a $5.0 million bank revolving line of credit with Wells Fargo Bank, National Association (“Wells Fargo”), with $3.0 million in outstanding borrowings at the quarter’s end.
“Willdan is currently in breach of the net income covenant in its revolving line of credit because it sustained net losses for two consecutive quarters. Willdan’s ratio of funded debt to EBITDA is also approaching the maximum permitted under the line of credit, restricting its ability to borrow additional funds available under the line of credit. Although Willdan is seeking a waiver from Wells Fargo for the current breach of the net income covenant, Wells Fargo is not obligated to provide any waiver and can choose to increase the interest rate of the outstanding indebtedness, accelerate the loans outstanding under the line of credit and/or terminate its commitments under the line of credit.”
Conference Call and Webcast
Chief Executive Officer Thomas Brisbin and Chief Financial Officer Kimberly Gant plan to host a conference call on May 10, 2012 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 888-549-7750 (480-629-9643 for international callers). When prompted, ask for the “Willdan Group, Inc., First Quarter 2012 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 24, 2012, by dialing 800-406-7325 (303-590-3030 for international callers). The replay access code is 4536445. The webcast replay will be archived for 12 months.
About Willdan Group, Inc.
Founded in 1964, Willdan is a provider of professional technical and consulting services to public agencies at all levels of government, public and private utilities and commercial and private firms. Willdan provides a broad range of services to clients, including engineering and planning, energy efficiency and sustainability, economic and financial consulting, and national preparedess and interoperability. 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 Annual Report on Form 10-K for the year ended December 30, 2011 filed on March 29, 2012 and the Quarterly Report on Form 10-Q for the quarter ended March 30, 2012. 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.
WILLDAN GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
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March 30, |
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December 30, |
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(unaudited) |
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Assets |
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Current assets: |
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Cash and cash equivalents |
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$ |
5,008,000 |
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$ |
3,001,000 |
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Accounts receivable, net of allowance for doubtful accounts of $479,000 and $421,000 at March 30, 2012 and December 30, 2011, respectively |
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14,550,000 |
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16,782,000 |
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Costs and estimated earnings in excess of billings on uncompleted contracts |
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23,964,000 |
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20,672,000 |
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Other receivables |
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77,000 |
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175,000 |
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Prepaid expenses and other current assets |
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1,695,000 |
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1,724,000 |
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Total current assets |
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45,294,000 |
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42,354,000 |
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Equipment and leasehold improvements, net |
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1,119,000 |
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1,217,000 |
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Goodwill |
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15,208,000 |
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15,208,000 |
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Other intangible assets, net |
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39,000 |
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49,000 |
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Other assets |
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450,000 |
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383,000 |
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Deferred income taxes, net of current portion |
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5,100,000 |
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5,100,000 |
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Total assets |
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$ |
67,210,000 |
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$ |
64,311,000 |
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Liabilities and Stockholders’ Equity |
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Current liabilities: |
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|
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Excess of outstanding checks over bank balance |
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$ |
2,167,000 |
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$ |
1,777,000 |
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Borrowings under line of credit |
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3,000,000 |
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256,000 |
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Accounts payable |
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10,496,000 |
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8,182,000 |
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Accrued liabilities |
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8,821,000 |
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10,192,000 |
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Billings in excess of costs and estimated earnings on uncompleted contracts |
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1,187,000 |
|
752,000 |
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Current portion of notes payable |
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360,000 |
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600,000 |
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Current portion of capital lease obligations |
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148,000 |
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163,000 |
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Current portion of deferred income taxes |
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7,349,000 |
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7,349,000 |
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Total current liabilities |
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33,528,000 |
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29,271,000 |
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Notes payable, less current portion |
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60,000 |
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77,000 |
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Capital lease obligations, less current portion |
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113,000 |
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136,000 |
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Deferred lease obligations |
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498,000 |
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534,000 |
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Total liabilities |
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34,199,000 |
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30,018,000 |
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|
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|
|
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Commitments and contingencies |
|
|
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|
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|
|
|
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|
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Stockholders’ equity: |
|
|
|
|
| ||
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Preferred stock, $0.01 par value, 10,000,000 shares authorized, no shares issued and outstanding |
|
— |
|
— |
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Common stock, $0.01 par value, 40,000,000 shares authorized: 7,297,000 and 7,274,000 shares issued and outstanding at March 30, 2012 and December 30, 2011, respectively |
|
73,000 |
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73,000 |
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Additional paid-in capital |
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34,194,000 |
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34,065,000 |
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Accumulated (deficit) earnings |
|
(1,256,000 |
) |
155,000 |
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Total stockholders’ equity |
|
33,011,000 |
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34,293,000 |
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Total liabilities and stockholders’ equity |
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$ |
67,210,000 |
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$ |
64,311,000 |
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WILLDAN GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
|
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Three Months Ended |
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|
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March 30, |
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April 1, |
| ||
|
|
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2012 |
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2011 |
| ||
|
|
|
|
|
|
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Contract revenue |
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$ |
25,468,000 |
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$ |
22,742,000 |
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|
|
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|
|
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Direct costs of contract revenue (exclusive of depreciation and amortization shown separately below): |
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|
|
|
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Salaries and wages |
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5,957,000 |
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6,371,000 |
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Subconsultant services |
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10,930,000 |
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7,226,000 |
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Other direct costs, net |
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307,000 |
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(34,000 |
) | ||
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Total direct costs of contract revenue |
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17,194,000 |
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13,563,000 |
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|
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|
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General and administrative expenses: |
|
|
|
|
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Salaries and wages, payroll taxes and employee benefits |
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6,428,000 |
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5,561,000 |
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Facilities and facilities related |
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1,195,000 |
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1,078,000 |
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Stock-based compensation |
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54,000 |
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54,000 |
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Depreciation and amortization |
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174,000 |
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257,000 |
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Other |
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2,740,000 |
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2,509,000 |
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Total general and administrative expenses |
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10,591,000 |
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9,459,000 |
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Loss from operations |
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(2,317,000 |
) |
(280,000 |
) | ||
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|
|
|
|
|
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Other (expense) income, net: |
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|
|
|
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Interest income |
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1,000 |
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2,000 |
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Interest expense |
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(22,000 |
) |
(18,000 |
) | ||
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Other, net |
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— |
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5,000 |
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Total other expense, net |
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(21,000 |
) |
(11,000 |
) | ||
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Loss before income taxes |
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(2,338,000 |
) |
(291,000 |
) | ||
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|
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|
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Income tax (benefit) expense |
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(927,000 |
) |
— |
| ||
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Net loss |
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$ |
(1,411,000 |
) |
$ |
(291,000 |
) |
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|
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Loss per share: |
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|
|
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Basic and diluted |
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$ |
(0.19 |
) |
$ |
(0.04 |
) |
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|
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|
|
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Weighted-average shares outstanding: |
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|
|
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Basic |
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7,291,000 |
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7,251,000 |
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Diluted |
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7,291,000 |
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7,251,000 |
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WILLDAN GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
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|
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Three Months Ended |
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|
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March 30, |
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April 1, |
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Cash flows from operating activities: |
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|
|
|
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Net loss |
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$ |
(1,411,000 |
) |
$ |
(291,000 |
) |
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Adjustments to reconcile net loss to net cash (used in) provided by operating activities: |
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|
|
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Depreciation and amortization |
|
191,000 |
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274,000 |
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Lease abandonment expense, net |
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4,000 |
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13,000 |
| ||
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Gain (loss) on sale of equipment |
|
— |
|
(2,000 |
) | ||
|
Provision for doubtful accounts |
|
58,000 |
|
10,000 |
| ||
|
Stock-based compensation |
|
54,000 |
|
54,000 |
| ||
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Changes in operating assets and liabilities: |
|
|
|
|
| ||
|
Accounts receivable |
|
2,174,000 |
|
729,000 |
| ||
|
Costs and estimated earnings in excess of billings on uncompleted contracts |
|
(3,292,000 |
) |
(630,000 |
) | ||
|
Other receivables |
|
98,000 |
|
66,000 |
| ||
|
Prepaid expenses and other current assets |
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29,000 |
|
176,000 |
| ||
|
Other assets |
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(67,000 |
) |
10,000 |
| ||
|
Accounts payable |
|
2,314,000 |
|
(750,000 |
) | ||
|
Accrued liabilities |
|
(1,371,000 |
) |
239,000 |
| ||
|
Billings in excess of costs and estimated earnings on uncompleted contracts |
|
435,000 |
|
805,000 |
| ||
|
Deferred lease obligations |
|
(40,000 |
) |
(33,000 |
) | ||
|
Net cash (used in) provided by operating activities |
|
(824,000 |
) |
670,000 |
| ||
|
|
|
|
|
|
| ||
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Cash flows from investing activities: |
|
|
|
|
| ||
|
Purchase of equipment and leasehold improvements |
|
(73,000 |
) |
(201,000 |
) | ||
|
Proceeds from sale of equipment |
|
— |
|
1,000 |
| ||
|
Net cash used in investing activities |
|
(73,000 |
) |
(200,000 |
) | ||
|
|
|
|
|
|
| ||
|
Cash flows from financing activities: |
|
|
|
|
| ||
|
Changes in excess of outstanding checks over bank balance |
|
390,000 |
|
(117,000 |
) | ||
|
Payments on notes payable |
|
(257,000 |
) |
(35,000 |
) | ||
|
Proceeds from notes payable |
|
— |
|
23,000 |
| ||
|
Borrowings under line of credit |
|
5,469,000 |
|
7,237,000 |
| ||
|
Repayments on line of credit |
|
(2,725,000 |
) |
(7,029,000 |
) | ||
|
Principal payments on capital lease obligations |
|
(48,000 |
) |
(48,000 |
) | ||
|
Proceeds from stock option exercise |
|
10,000 |
|
— |
| ||
|
Proceeds from sales of common stock under employee stock purchase plan |
|
65,000 |
|
42,000 |
| ||
|
Net cash provided by financing activities |
|
2,904,000 |
|
73,000 |
| ||
|
Net increase in cash and cash equivalents |
|
2,007,000 |
|
543,000 |
| ||
|
Cash and cash equivalents at beginning of the period |
|
3,001,000 |
|
6,642,000 |
| ||
|
Cash and cash equivalents at end of the period |
|
$ |
5,008,000 |
|
$ |
7,185,000 |
|
|
|
|
|
|
|
| ||
|
Supplemental disclosures of cash flow information: |
|
|
|
|
| ||
|
Cash paid during the period for: |
|
|
|
|
| ||
|
Interest |
|
$ |
21,000 |
|
$ |
23,000 |
|
|
Income taxes |
|
17,000 |
|
— |
| ||
|
|
|
|
|
|
| ||
|
Supplemental disclosures of noncash investing and financing activities: |
|
|
|
|
| ||
|
Equipment acquired under capital lease obligations |
|
$ |
10,000 |
|
$ |
103,000 |
|