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.
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 | |||||||||||||||
| December 31, | January 1, | December 31, | January 1, | |||||||||||||
| In thousands (except EPS data) | 2010 | 2010 | 2010 | 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 | ||||||||||||
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:| In thousands | Twelve Months Ended | |||||||
| December 31, | January 1, | |||||||
| 2010 | 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 | ) | |||
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. 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.| WILLDAN GROUP, INC. AND SUBSIDIARIES | ||||||||
| CONSOLIDATED BALANCE SHEETS | ||||||||
| December 31, | January 1, | |||||||
| 2010 | 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 | ||||
| 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 | |||||||||
| 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 | |||||||||
