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): November 8, 2012

 


 

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 November 8, 2012. The press release announced its financial results for the third quarter ended September 28, 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 November 8, 2012 (financial results for the third quarter ended September 28, 2012).

 

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: November 8, 2012

 

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 November 8, 2012

 

 

(financial results for the third quarter ended September 28, 2012).

 

4


Exhibit 99.1

 

GRAPHIC

 

Willdan Reports Third Quarter 2012 Financial Results

 

ANAHEIM, Calif., November 8, 2012 (BUSINESS WIRE) — Willdan Group, Inc. (“Willdan”) (NASDAQ:WLDN), today announced financial results for its third quarter ended September 28, 2012.

 

For the third quarter of 2012, Willdan reported total contract revenue of $21.5 million and net income of $0.8 million, or $0.11 per share.

 

Tom Brisbin, Willdan’s Chief Executive Officer, stated: While our third quarter revenue declined, we had a profitable quarter and generated solid cash flow from operations. We managed our expenses carefully during the quarter and three of our four segments were profitable.”

 

Third Quarter 2012 Results

 

For the third quarter of fiscal 2012, revenue was $21.5 million, down $7.1 million, or 24.7%, from revenue of $28.6 million for the comparable period last year. On a sequential basis, revenue was down $1.9 million, or 8.2%, from the second quarter of 2012. Income from operations was $1.4 million for the third quarter of fiscal 2012, as compared to income from operations of $2.4 million for the comparable period last year. On a sequential basis, income from operations was $1.4 million as compared to loss from operations of $19.6 million, including a $15.2 million goodwill impairment charge, for the second quarter of 2012.

 

Net income was $0.8 million for the third quarter of fiscal 2012, as compared to net income of $2.2 million for the comparable period last year and a net loss of $17.0 million for the second quarter of 2012.

 

Earnings per share for the third quarter of fiscal 2012 were $0.11 as compared to earnings per share of $0.30 for the comparable period last year.

 

Willdan generated $3.7 million in cash flow from operations in the third quarter of fiscal 2012.

 

1



 

Nine Months 2012 Results

 

For the nine months ended September 28, 2012, revenue was $70.5 million, as compared to $77.2 million in the comparable period last year. Loss from operations was $20.5 million for the nine months ended September 28, 2012 as compared to income from operations of $3.1 million for the comparable period last year. Net loss was $17.6 million for the nine months ended September 28, 2012 as compared to net income of $2.6 million for the comparable period last year.

 

Loss per share for the nine months ended September 28, 2012 was $2.41 as compared to earnings per share of $0.36 for the comparable period last year.

 

Willdan generated $4.6 million in cash flow from operations in the nine months ended September 28, 2012.

 

 

 

Three Months Ended

 

Nine Months Ended

 

In thousands (except per share data)

 

September 28,
2012

 

September 30,
2011

 

September 28,
2012

 

September 30,
2011

 

Revenue

 

$

21,547

 

$

28,605

 

$

70,496

 

$

77,159

 

 

 

 

 

 

 

 

 

 

 

Income (loss) from operations

 

1,420

 

2,380

 

(20,480

)

3,054

 

Interest income

 

2

 

1

 

4

 

5

 

Interest expense

 

(28

)

(21

)

(80

)

(53

)

Other, net

 

(14

)

8

 

(35

)

5

 

Income tax expense (benefit)

 

593

 

203

 

(2,991

)

402

 

Net income (loss)

 

$

787

 

$

2,165

 

$

(17,600

)

$

2,609

 

 

 

 

 

 

 

 

 

 

 

Basic earnings (loss) per share

 

$

0.11

 

$

0.30

 

$

(2.41

)

$

0.36

 

Diluted earnings (loss) per share

 

$

0.11

 

$

0.29

 

$

(2.41

)

$

0.35

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

7,315

 

7,267

 

7,303

 

7,258

 

Diluted

 

7,315

 

7,468

 

7,303

 

7,478

 

 

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 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.

 

2



 

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 $8.5 million to $(4.7) million for the nine months ended September 28, 2012 from $3.8 million for the comparable period last year.

 

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

 

 

 

Nine Months Ended

 

In thousands

 

September 28,
2012

 

September 30,
2011

 

Net (loss) income

 

$

(17,600

)

$

2,609

 

Interest income

 

(4

)

(5

)

Interest expense

 

80

 

53

 

Income tax (benefit) expense

 

(2,991

)

402

 

Loss on sale of assets

 

17

 

1

 

Depreciation and amortization

 

569

 

733

 

Impairment of goodwill

 

15,208

 

 

Lease abandonment expense, net

 

27

 

9

 

Adjusted EBITDA

 

$

(4,694

)

$

3,802

 

 

Liquidity and Capital Resources

 

Willdan had $9.2 million in cash and cash equivalents at September 28, 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 did not have net income of at least $250,000 measured on a rolling four quarter basis and it sustained net losses for two consecutive quarters in the past year. Additionally, Willdan’s ratio of funded debt to EBITDA exceeds the limits permitted under the line of credit. Because of these covenant breaches, Willdan’s ability to borrow additional funds under the line of credit is currently subject to Wells Fargo’s discretion.  Although Willdan is seeking a waiver from Wells Fargo for the current breach of the covenants and is seeking to amend certain covenants in the credit agreement, Wells Fargo is not obligated to provide any waiver or modify the terms of the credit agreement 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.

 

3



 

Conference Call and Webcast

 

Chief Executive Officer Thomas Brisbin and Chief Financial Officer Kimberly Gant plan to host a conference call on November 8, 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 888-549-7880 (480-629-9867 for international callers). When prompted, ask for the “Willdan Group, Inc., Third 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 November 22, 2012, by dialing 800-406-7325 (303-590-3030 for international callers).  The replay access code is 4571509. 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 industrial firms. Willdan provides a broad range of services to clients, including engineering and planning, energy efficiency and sustainability, economic and financial consulting, and national preparedness 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, the Quarterly Report on Form 10-Q for the quarter ended March 30, 2012 filed on May 14, 2012, the Quarterly Report on Form 10-Q for the quarter ended June 29, 2012 filed on August 13, 2012, and the Quarterly Report on Form 10-Q for the quarter ended September 28, 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.

 

4



 

WILLDAN GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

 

 

 

September 28,
2012

 

December 30,
2011

 

 

 

(unaudited)

 

 

 

Assets

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

 

$

9,230,000

 

$

3,001,000

 

Accounts receivable, net of allowance for doubtful accounts of $562,000 and $421,000 at September 28, 2012 and December 30, 2011, respectively

 

14,079,000

 

16,782,000

 

Costs and estimated earnings in excess of billings on uncompleted contracts

 

11,154,000

 

20,672,000

 

Other receivables

 

128,000

 

175,000

 

Prepaid expenses and other current assets

 

1,072,000

 

1,724,000

 

Total current assets

 

35,663,000

 

42,354,000

 

 

 

 

 

 

 

Equipment and leasehold improvements, net

 

1,014,000

 

1,217,000

 

Goodwill

 

 

15,208,000

 

Other intangible assets, net

 

20,000

 

49,000

 

Other assets

 

353,000

 

383,000

 

Deferred income taxes, net of current portion

 

5,336,000

 

5,100,000

 

Total assets

 

$

42,386,000

 

$

64,311,000

 

 

 

 

 

 

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Excess of outstanding checks over bank balance

 

$

1,496,000

 

$

1,777,000

 

Borrowings under line of credit

 

3,000,000

 

256,000

 

Accounts payable

 

4,946,000

 

8,182,000

 

Accrued liabilities

 

7,536,000

 

10,192,000

 

Billings in excess of costs and estimated earnings on uncompleted contracts

 

3,607,000

 

752,000

 

Current portion of notes payable

 

71,000

 

600,000

 

Current portion of capital lease obligations

 

150,000

 

163,000

 

Current portion of deferred income taxes

 

4,001,000

 

7,349,000

 

Total current liabilities

 

24,807,000

 

29,271,000

 

 

 

 

 

 

 

Notes payable, less current portion

 

24,000

 

77,000

 

Capital lease obligations, less current portion

 

116,000

 

136,000

 

Deferred lease obligations

 

435,000

 

534,000

 

Total liabilities

 

25,382,000

 

30,018,000

 

 

 

 

 

 

 

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: 7,335,000 and 7,274,000 shares issued and outstanding at September 28, 2012 and December 30, 2011, respectively

 

73,000

 

73,000

 

Additional paid-in capital

 

34,376,000

 

34,065,000

 

Accumulated (deficit) earnings

 

(17,445,000

)

155,000

 

Total stockholders’ equity

 

17,004,000

 

34,293,000

 

Total liabilities and stockholders’ equity

 

$

42,386,000

 

$

64,311,000

 

 

5



 

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

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

 

September 28,

 

September 30,

 

September 28,

 

September 30,

 

 

 

2012

 

2011

 

2012

 

2011

 

 

 

 

 

 

 

 

 

 

 

Contract revenue

 

$

21,547,000

 

$

28,605,000

 

$

70,496,000

 

$

77,159,000

 

 

 

 

 

 

 

 

 

 

 

Direct costs of contract revenue:

 

 

 

 

 

 

 

 

 

Salaries and wages

 

5,680,000

 

6,568,000

 

17,613,000

 

19,567,000

 

Subconsultant services

 

7,104,000

 

8,825,000

 

29,072,000

 

22,618,000

 

Other direct costs

 

(1,494,000

)

1,462,000

 

(1,085,000

)

3,749,000

 

Total direct costs of contract revenue

 

11,290,000

 

16,855,000

 

45,600,000

 

45,934,000

 

 

 

 

 

 

 

 

 

 

 

General and administrative expenses:

 

 

 

 

 

 

 

 

 

Salaries and wages, payroll taxes and employee benefits

 

5,075,000

 

5,381,000

 

17,342,000

 

16,245,000

 

Facilities and facilities related

 

1,224,000

 

1,266,000

 

3,659,000

 

3,663,000

 

Stock-based compensation

 

50,000

 

40,000

 

181,000

 

148,000

 

Depreciation and amortization

 

163,000

 

197,000

 

518,000

 

683,000

 

Lease abandonment, net

 

(3,000

)

 

27,000

 

9,000

 

Impairment of goodwill

 

 

 

15,208,000

 

 

Other

 

2,328,000

 

2,486,000

 

8,441,000

 

7,423,000

 

Total general and administrative expenses

 

8,837,000

 

9,370,000

 

45,376,000

 

28,171,000

 

Income (loss) from operations

 

1,420,000

 

2,380,000

 

(20,480,000

)

3,054,000

 

 

 

 

 

 

 

 

 

 

 

Other income (expense), net:

 

 

 

 

 

 

 

 

 

Interest income

 

2,000

 

1,000

 

4,000

 

5,000

 

Interest expense

 

(28,000

)

(21,000

)

(80,000

)

(53,000

)

Other, net

 

(14,000

)

8,000

 

(35,000

)

5,000

 

Total other expense, net

 

(40,000

)

(12,000

)

(111,000

)

(43,000

)

Income (loss) before income taxes

 

1,380,000

 

2,368,000

 

(20,591,000

)

3,011,000

 

 

 

 

 

 

 

 

 

 

 

Income tax expense (benefit)

 

593,000

 

203,000

 

(2,991,000

)

402,000

 

Net income (loss)

 

$

787,000

 

$

2,165,000

 

$

(17,600,000

)

$

2,609,000

 

 

 

 

 

 

 

 

 

 

 

Earnings (loss) per share:

 

 

 

 

 

 

 

 

 

Basic

 

$

0.11

 

$

0.30

 

$

(2.41

)

$

0.36

 

Diluted

 

$

0.11

 

$

0.29

 

$

(2.41

)

$

0.35

 

 

 

 

 

 

 

 

 

 

 

Weighted-average shares outstanding:

 

 

 

 

 

 

 

 

 

Basic

 

7,315,000

 

7,267,000

 

7,303,000

 

7,258,000

 

Diluted

 

7,315,000

 

7,468,000

 

7,303,000

 

7,478,000

 

 

6



 

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

 

 

 

Nine Months Ended

 

 

 

September 28,
2012

 

September 30,
2011

 

Cash flows from operating activities:

 

 

 

 

 

Net (loss) income

 

$

(17,600,000

)

$

2,609,000

 

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

 

 

 

 

 

Non-cash revenue from subcontractor settlement

 

 

(902,000

)

Depreciation and amortization

 

569,000

 

733,000

 

Lease abandonment expense, net

 

27,000

 

9,000

 

Deferred income taxes

 

(3,584,000

)

 

Impairment of goodwill

 

15,208,000

 

 

Loss on sale of equipment

 

17,000

 

1,000

 

Provision for doubtful accounts

 

793,000

 

131,000

 

Stock-based compensation

 

181,000

 

148,000

 

Changes in operating assets and liabilities:

 

 

 

 

 

Accounts receivable

 

1,910,000

 

(402,000

)

Costs and estimated earnings in excess of billings on uncompleted contracts

 

9,518,000

 

(5,075,000

)

Other receivables

 

47,000

 

(66,000

)

Prepaid expenses and other current assets

 

652,000

 

709,000

 

Other assets

 

30,000

 

12,000

 

Accounts payable

 

(3,236,000

)

1,546,000

 

Accrued liabilities

 

(2,656,000

)

3,653,000

 

Billings in excess of costs and estimated earnings on uncompleted contracts

 

2,855,000

 

115,000

 

Deferred lease obligations

 

(126,000

)

(158,000

)

Net cash provided by operating activities

 

4,605,000

 

3,063,000

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

Purchase of equipment and leasehold improvements

 

(275,000

)

(309,000

)

Proceeds from sale of equipment

 

14,000

 

6,000

 

Payments for business acquisition

 

 

(2,733,000

)

Net cash used in investing activities

 

(261,000

)

(3,036,000

)

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

Changes in excess of outstanding checks over bank balance

 

(281,000

)

(234,000

)

Payments on notes payable

 

(582,000

)

(48,000

)

Proceeds from notes payable

 

 

23,000

 

Borrowings under line of credit

 

11,663,000

 

22,682,000

 

Repayments on line of credit

 

(8,919,000

)

(20,762,000

)

Principal payments on capital lease obligations

 

(126,000

)

(152,000

)

Proceeds from stock option exercise

 

10,000

 

4,000

 

Proceeds from sales of common stock under employee stock purchase plan

 

120,000

 

93,000

 

Net cash provided by financing activities

 

1,885,000

 

1,606,000

 

Net increase in cash and cash equivalents

 

6,229,000

 

1,633,000

 

Cash and cash equivalents at beginning of the period

 

3,001,000

 

6,642,000

 

Cash and cash equivalents at end of the period

 

$

9,230,000

 

$

8,275,000

 

 

 

 

 

 

 

Supplemental disclosures of cash flow information:

 

 

 

 

 

Cash paid during the period for:

 

 

 

 

 

Interest

 

$

79,000

 

$

51,000

 

Income taxes

 

59,000

 

51,000

 

 

 

 

 

 

 

Supplemental disclosures of noncash investing and financing activities:

 

 

 

 

 

Equipment acquired under capital lease obligations

 

$

93,000

 

$

159,000

 

 

7



 

SOURCE:  Willdan Group, Inc.

 

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

 

8