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Willdan Reports Fourth Quarter 2012 And Fiscal Year 2012 Financial Results

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 to extend the maturity of the line of credit, Wells Fargo is not obligated to provide any waiver or modify the terms of the agreement and could 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 today, March 26, 2013, 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 877-941-0844 (480-629-9835 for international callers). When prompted, ask for the “Willdan Group, Inc., Fourth 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 April 9, 2013, by dialing 800-358-3474 (303-590-3030 for international callers). The replay access code is 4599738. 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 throughout the United States, 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 to be filed for the year ended December 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.

   
WILLDAN GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
 
December 28, 2012 December 30, 2011
Assets    
Current assets:
Cash and cash equivalents $ 10,006,000 $ 3,001,000
Accounts receivable, net of allowance for doubtful accounts of $303,000 and $421,000

at December 28, 2012 and December 30, 2011, respectively

15,484,000 16,782,000
Costs and estimated earnings in excess of billings on uncompleted contracts 9,860,000 20,672,000
Other receivables 95,000 175,000
Prepaid expenses and other current assets 1,782,000 1,724,000
Total current assets 37,227,000 42,354,000
 
Equipment and leasehold improvements, net 979,000 1,217,000
Goodwill 15,208,000
Other intangible assets, net 12,000 49,000
Other assets 307,000 383,000
Deferred income taxes 3,452,000 5,100,000
Total assets $ 41,977,000 $ 64,311,000
 
Liabilities and Stockholders’ Equity
Current liabilities:
Excess of outstanding checks over bank balance $ 1,188,000 $ 1,777,000
Borrowings under line of credit 3,000,000 256,000
Accounts payable 6,983,000 8,182,000
Accrued liabilities 5,306,000 10,192,000
Billings in excess of costs and estimated earnings on uncompleted contracts 3,419,000 752,000
Current portion of notes payable 628,000 600,000
Current portion of capital lease obligations 152,000 163,000
Current portion of deferred income taxes 3,452,000 7,349,000
Total current liabilities 24,128,000 29,271,000
 
Notes payable, less current portion 77,000
Capital lease obligations, less current portion 124,000 136,000
Deferred lease obligations 374,000 534,000
Total liabilities 24,626,000 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 December 28, 2012 and December 30, 2011, respectively

73,000 73,000
Additional paid-in capital 34,423,000 34,065,000
Accumulated (deficit) earnings (17,145,000 ) 155,000
Total stockholders’ equity 17,351,000 34,293,000
Total liabilities and stockholders’ equity $ 41,977,000 $ 64,311,000
 
 
WILLDAN GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
 
Fiscal Year
2012   2011   2010
 
Contract revenue $ 93,443,000 $ 107,165,000 $ 77,896,000
 
Direct costs of contract revenue (exclusive of depreciation and amortization shown separately below):
Salaries and wages 23,218,000 25,714,000 21,607,000
Subconsultant services and other direct costs 35,741,000 39,013,000 20,415,000
Total direct costs of contract revenue 58,959,000 64,727,000 42,022,000
 
General and administrative expenses:
Salaries and wages, payroll taxes and employee benefits 22,421,000 22,594,000 17,582,000
Facilities and facility related 4,871,000 4,875,000 4,290,000
Stock-based compensation 227,000 201,000 235,000
Depreciation and amortization 671,000 877,000 1,042,000
Lease abandonment (recovery), net 26,000 2,000 (68,000 )
Impairment of goodwill 15,208,000
Other 10,315,000 10,488,000 9,719,000
Total general and administrative expenses 53,739,000 39,037,000 32,800,000
(Loss) income from operations (19,255,000 ) 3,401,000 3,074,000
 
Other (expense) income:
Interest income 6,000 5,000 12,000
Interest expense (106,000 ) (77,000 ) (54,000 )
Other, net (28,000 ) 1,000 32,000
Total other (expense) income, net (128,000 ) (71,000 ) (10,000 )
(Loss) income before income taxes (19,383,000 ) 3,330,000 3,064,000
 
Income tax (benefit) expense (2,083,000 ) 1,500,000 344,000
Net (loss) income $ (17,300,000 ) $ 1,830,000 $ 2,720,000
 
(Loss) earnings per share:
Basic $ (2.37 ) $ 0.25 $ 0.38
Diluted $ (2.37 ) $ 0.24 $ 0.37
 
Weighted-average shares outstanding:
Basic 7,310,000 7,262,000 7,233,000
Diluted 7,310,000 7,485,000 7,311,000
 
 
WILLDAN GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
 
Fiscal Year
2012   2011  

2010

Cash flows from operating activities:
Net (loss) income $

(17,300,000

) $ 1,830,000 $ 2,720,000
Adjustments to reconcile net (loss) income to net cash provided by (used in)

operating activities:

Non-cash revenue from subcontractor settlement (902,000 )
Depreciation and amortization 737,000 944,000 1,053,000
Deferred income taxes (2,249,000 ) 1,465,000 389,000
Goodwill impairment 15,208,000
Lease abandonment expense (recovery), net 26,000 2,000 (68,000 )
Loss (gain) on sale of equipment 18,000 2,000 (17,000 )
Provision for doubtful accounts 673,000 209,000 20,000
Stock-based compensation 227,000 201,000 235,000
Changes in operating assets and liabilities:
Accounts receivable 625,000 (2,507,000 ) (4,407,000 )
Costs and estimated earnings in excess of billings on uncompleted contracts 10,812,000 (8,427,000 ) (4,694,000 )
Income tax receivable 51,000
Other receivables 80,000 1,000 (103,000 )
Prepaid expenses and other current assets (58,000 ) (10,000 ) (214,000 )
Other assets 76,000 24,000 (89,000 )
Accounts payable (1,199,000 ) 2,802,000 3,923,000
Accrued liabilities (4,886,000 ) 4,206,000 1,476,000
Billings in excess of costs and estimated earnings on uncompleted contracts 2,667,000 (289,000 ) 11,000
Deferred lease obligations (186,000 ) (234,000 ) (189,000 )
Net cash provided by (used in) operating activities 5,271,000 (683,000 ) 97,000
 
Cash flows from investing activities:
Purchase of equipment and leasehold improvements (359,000 ) (395,000 ) (685,000 )
Proceeds from sale of equipment 20,000 6,000 40,000
Payments related to business acquisitions (2,733,000 ) (2,104,000 )
Net cash used in investing activities (339,000 ) (3,122,000 ) (2,749,000 )
 
Cash flows from financing activities:
Changes in excess of outstanding checks over bank balance (589,000 ) 554,000 735,000
Payments on notes payable (663,000 ) (211,000 ) (17,000 )
Proceeds from notes payable 614,000 667,000 214,000
Borrowings under line of credit 11,663,000 33,965,000 14,123,000
Repayments of line of credit (8,919,000 ) (34,709,000 ) (14,123,000 )
Principal payments on capital leases (164,000 ) (202,000 ) (173,000 )
Proceeds from stock option exercise 11,000 7,000 3,000
Proceeds from sales of common stock under employee stock purchase plan 120,000 93,000 87,000
Net cash provided by financing activities 2,073,000 164,000 849,000
 
Net increase (decrease) in cash and cash equivalents 7,005,000 (3,641,000 ) (1,803,000 )
Cash and cash equivalents at beginning of the year 3,001,000 6,642,000 8,445,000
Cash and cash equivalents at end of the year $ 10,006,000 $ 3,001,000 $ 6,642,000
 
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest $ 106,000 $ 77,000 $ 52,000
Income taxes 139,000 70,000 48,000
Supplemental disclosures of noncash investing and financing activities:
Equipment acquired under capital leases $ 151,000 $ 247,000 $ 240,000
 




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