Exhibit 99.1
Willdan Reports Second Quarter 2010 Financial Results
ANAHEIM, Calif., August 12, 2010 (BUSINESS WIRE) — Willdan Group, Inc. (“Willdan”) (NASDAQ:WLDN), today announced financial results for its second quarter ended July 2, 2010.
For the second quarter of 2010, Willdan reported total contract revenue of $20.4 million and net income of $1.3 million, or $0.17 per share.
Tom Brisbin, Willdan’s Chief Executive Officer, stated: “We’re pleased to report our second consecutive quarter of profitability in 2010. Our energy and homeland security services groups are doing well and have a favorable outlook for the future.
Our traditional engineering group is now stable and breaking even. Our financial services group, which realized a decline in revenue, continued to be profitable. We believe that we have now turned the corner and that our diversified business model will position Willdan for continued profitable growth ahead.”
Second Quarter 2010 Results
For the second quarter of fiscal 2010, revenue was $20.4 million, up $4.9 million, or 31.6%, from revenue of $15.5 million for the comparable period last year. On a sequential basis, revenue was up $3.4 million, or 20.0%, from the first quarter of 2010. Income from operations was $1.3 million for the second quarter of fiscal 2010, as compared to a loss from operations of $1.4 million for the comparable period last year. On a sequential basis, income from operations was up $0.9 million, or 225.0%, from income from operations of $0.4 million for the first quarter of 2010.
Net income was $1.3 million for the second quarter of fiscal 2010, as compared to a net loss of $0.9 million in the comparable period last year and net income of $0.4 million in the first quarter of 2010.
Basic and diluted earnings per share for the second quarter of fiscal 2010 was $0.17 as compared to a loss per share of $0.12 for the comparable period last year.
Willdan used $0.4 million in cash flow from operations in the second quarter of fiscal year 2010.
Six Months 2010 Results
For the six months ended July 2, 2010, revenue was $37.3 million, up $4.6 million, or 14.1%, from revenue of $32.7 million in the comparable period last year. Income from operations was $1.7 million for the six months ended July 2, 2010 as compared to a loss from operations of $2.1 million for the comparable period last year. Net income was $1.7 million for the six months ended July 2, 2010 as compared to a net loss of $1.4 million for the comparable period last year.
Basic and diluted earnings per share for the six months ended July 2, 2010 was $0.23 as compared to a basic and diluted loss per share of $0.19 for the comparable period last year.
Willdan used $1.7 million in cash flow from operations in the six months ended July 2, 2010.
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| Three Months Ended |
| Six Months Ended |
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In thousands (except per share data) |
| July 2, |
| July 3, |
| July 2, |
| July 3, |
| ||||
Revenue |
| $ | 20,367 |
| $ | 15,484 |
| $ | 37,318 |
| $ | 32,669 |
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|
|
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Income (loss) from operations |
| 1,265 |
| (1,433 | ) | 1,650 |
| (2,138 | ) | ||||
Interest income |
| 1 |
| 11 |
| 6 |
| 23 |
| ||||
Interest expense |
| (18 | ) | (9 | ) | (26 | ) | (20 | ) | ||||
Other, net |
| 10 |
| (3 | ) | 20 |
| (3 | ) | ||||
Income tax benefit |
| — |
| (536 | ) | — |
| (786 | ) | ||||
Net income (loss) |
| $ | 1,258 |
| $ | (898 | ) | $ | 1,650 |
| $ | (1,352 | ) |
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Basic and diluted earnings (loss) per share |
| $ | 0.17 |
| $ | (0.12 | ) | $ | 0.23 |
| $ | (0.19 | ) |
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Weighted average shares outstanding: |
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| ||||
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Basic |
| 7,229 |
| 7,188 |
| 7,226 |
| 7,178 |
| ||||
Diluted |
| 7,252 |
| 7,188 |
| 7,240 |
| 7,178 |
| ||||
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 (benefit) expense, depreciation and amortization, lease abandonment expense, and loss (gain) on sales of equipment. 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 increased $3.1 million to $2.2 million for the six months ended July 2, 2010 from $(0.9) million for the comparable period last year.
The following is a reconciliation of net income (loss) to Adjusted EBITDA:
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| Six Months Ended |
| ||||
In thousands |
| July 2, |
| July 3, |
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|
| ||
Net income (loss) |
| $ | 1,650 |
| $ | (1,352 | ) |
Interest income |
| (6 | ) | (23 | ) | ||
Interest expense |
| 26 |
| 20 |
| ||
(Gain) loss on sale of equipment |
| (19 | ) | 3 |
| ||
Income tax benefit |
| — |
| (786 | ) | ||
Depreciation and amortization |
| 518 |
| 1,229 |
| ||
Lease abandonment expense, net |
| 13 |
| (19 | ) | ||
Adjusted EBITDA |
| $ | 2,182 |
| $ | (928 | ) |
Liquidity and Capital Resources
Willdan had $6.8 million in cash and cash equivalents at July 2, 2010, compared with $8.4 million at January 1, 2010. Willdan has a $5.0 million revolving line of credit under a credit agreement with its bank. At July 2, 2010, there was $1.0 million in outstanding borrowings under this agreement. Unless otherwise extended, the credit agreement matures on January 1, 2011.
Conference Call and Webcast
Chief Executive Officer Thomas Brisbin and Chief Financial Officer Kimberly Gant plan to host a conference call on August 12, 2010 at 5:00 p.m. Eastern/2:00 p.m. Pacific, to further discuss the Company’s financial results.
Interested parties may participate in the conference call by dialing 877-941-2332 (480-629-9722 for international callers). When prompted, ask for the “Willdan Group, Inc., Second 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 August 26, 2010, by dialing 800-406-7325 (303-590-3030 for international callers). The replay access code is 4330025. The webcast replay will be archived for 12 months.
About Willdan Group, Inc.
Founded over 40 years ago, Willdan is a provider of outsourced services to public and private agencies and utilities located primarily in California and New York. Willdan assists cities, public utilities and other government agencies and, to a lesser extent, private industry with a broad range of services, including civil engineering, building and safety services, geotechnical engineering, energy efficiency, water conservation, renewable resource strategy, financial and economic consulting, and disaster preparedness and homeland security. 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 January 1, 2010 filed on March 30, 2010. 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
|
| July 2, |
| January 1, |
| ||
|
| (unaudited) |
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Assets |
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Current assets: |
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Cash and cash equivalents |
| $ | 6,753,000 |
| $ | 8,445,000 |
|
Accounts receivable, net of allowance for doubtful accounts of $1,165,000 and $1,862,000 at July 2, 2010 and January 1, 2010, respectively |
| 11,533,000 |
| 10,097,000 |
| ||
Costs and estimated earnings in excess of billings on uncompleted contracts |
| 11,220,000 |
| 6,649,000 |
| ||
Income tax receivable |
| 51,000 |
| 51,000 |
| ||
Other receivables |
| 32,000 |
| 73,000 |
| ||
Prepaid expenses and other current assets |
| 1,504,000 |
| 1,500,000 |
| ||
Total current assets |
| 31,093,000 |
| 26,815,000 |
| ||
|
|
|
|
|
| ||
Equipment and leasehold improvements, net |
| 1,371,000 |
| 1,596,000 |
| ||
Goodwill |
| 12,371,000 |
| 10,371,000 |
| ||
Other intangible assets, net |
| 132,000 |
| 149,000 |
| ||
Other assets |
| 355,000 |
| 318,000 |
| ||
Deferred income taxes, net of current portion |
| 1,083,000 |
| 1,083,000 |
| ||
Total assets |
| $ | 46,405,000 |
| $ | 40,332,000 |
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Liabilities and Stockholders’ Equity |
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Current liabilities: |
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Excess of outstanding checks over bank balance |
| $ | 798,000 |
| $ | 488,000 |
|
Accounts payable |
| 1,386,000 |
| 1,457,000 |
| ||
Purchase price payable |
| 2,000,000 |
| — |
| ||
Accrued liabilities |
| 6,346,000 |
| 4,509,000 |
| ||
Billings in excess of costs and estimated earnings on uncompleted contracts |
| 1,380,000 |
| 1,030,000 |
| ||
Borrowings under line of credit |
| 1,000,000 |
| 1,000,000 |
| ||
Current portion of notes payable |
| 3,000 |
| 23,000 |
| ||
Current portion of capital lease obligations |
| 102,000 |
| 125,000 |
| ||
Current portion of deferred income taxes |
| 1,479,000 |
| 1,479,000 |
| ||
Total current liabilities |
| 14,494,000 |
| 10,111,000 |
| ||
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Capital lease obligations, less current portion |
| 69,000 |
| 82,000 |
| ||
Deferred lease obligations |
| 900,000 |
| 1,022,000 |
| ||
Total liabilities |
| 15,463,000 |
| 11,215,000 |
| ||
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Commitments and contingencies |
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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 |
| — |
| — |
| ||
Common stock, $0.01 par value, 40,000,000 shares authorized: 7,229,000 and 7,208,000 shares issued and outstanding at July 2, 2010 and January 1, 2010, respectively |
| 72,000 |
| 72,000 |
| ||
Additional paid-in capital |
| 33,615,000 |
| 33,440,000 |
| ||
Accumulated deficit |
| (2,745,000 | ) | (4,395,000 | ) | ||
Total stockholders’ equity |
| 30,942,000 |
| 29,117,000 |
| ||
Total liabilities and stockholders’ equity |
| $ | 46,405,000 |
| $ | 40,332,000 |
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WILLDAN GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
|
| Three Months Ended |
| Six Months Ended |
| ||||||||
|
| July 2, |
| July 3, |
| July 2, |
| July 3, |
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|
| 2010 |
| 2009 |
| 2010 |
| 2009 |
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Contract revenue |
| $ | 20,367,000 |
| $ | 15,484,000 |
| $ | 37,318,000 |
| $ | 32,669,000 |
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Direct costs of contract revenue: |
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Salaries and wages |
| 5,612,000 |
| 4,502,000 |
| 10,626,000 |
| 9,292,000 |
| ||||
Sub-consultant services |
| 3,542,000 |
| 2,182,000 |
| 5,479,000 |
| 4,608,000 |
| ||||
Other direct costs |
| 1,644,000 |
| 740,000 |
| 2,986,000 |
| 1,827,000 |
| ||||
Total direct costs of contract revenue |
| 10,798,000 |
| 7,424,000 |
| 19,091,000 |
| 15,727,000 |
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General and administrative expenses: |
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Salaries and wages, payroll taxes and employee benefits |
| 4,484,000 |
| 5,066,000 |
| 8,926,000 |
| 10,548,000 |
| ||||
Facilities and facility related |
| 1,035,000 |
| 1,098,000 |
| 2,129,000 |
| 2,236,000 |
| ||||
Stock-based compensation |
| 48,000 |
| 73,000 |
| 128,000 |
| 142,000 |
| ||||
Depreciation and amortization |
| 239,000 |
| 704,000 |
| 510,000 |
| 1,229,000 |
| ||||
Other |
| 2,498,000 |
| 2,552,000 |
| 4,884,000 |
| 4,925,000 |
| ||||
Total general and administrative expenses |
| 8,304,000 |
| 9,493,000 |
| 16,577,000 |
| 19,080,000 |
| ||||
Income (loss) from operations |
| 1,265,000 |
| (1,433,000 | ) | 1,650,000 |
| (2,138,000 | ) | ||||
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Other income (expense), net: |
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Interest income |
| 1,000 |
| 11,000 |
| 6,000 |
| 23,000 |
| ||||
Interest expense |
| (18,000 | ) | (9,000 | ) | (26,000 | ) | (20,000 | ) | ||||
Other, net |
| 10,000 |
| (3,000 | ) | 20,000 |
| (3,000 | ) | ||||
Total other income (expense), net |
| (7,000 | ) | (1,000 | ) | — |
| — |
| ||||
Income (loss) before income taxes |
| 1,258,000 |
| (1,434,000 | ) | 1,650,000 |
| (2,138,000 | ) | ||||
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Income tax benefit |
| — |
| (536,000 | ) | — |
| (786,000 | ) | ||||
Net income (loss) |
| $ | 1,258,000 |
| $ | (898,000 | ) | $ | 1,650,000 |
| $ | (1,352,000 | ) |
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Earnings (loss) per share: |
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Basic and diluted |
| $ | 0.17 |
| $ | (0.12 | ) | $ | 0.23 |
| $ | (0.19 | ) |
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Weighted-average shares outstanding: |
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Basic |
| 7,229,000 |
| 7,188,000 |
| 7,226,000 |
| 7,178,000 |
| ||||
Diluted |
| 7,252,000 |
| 7,188,000 |
| 7,240,000 |
| 7,178,000 |
| ||||
WILLDAN GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
|
| Six Months Ended |
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|
| July 2, |
| July 3, |
| ||
Cash flows from operating activities: |
|
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|
|
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Net income (loss) |
| $ | 1,650,000 |
| $ | (1,352,000 | ) |
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities: |
|
|
|
|
| ||
Depreciation and amortization |
| 518,000 |
| 1,229,000 |
| ||
Lease abandonment expense, net |
| 13,000 |
| (19,000 | ) | ||
(Gain) loss on sale of equipment |
| (19,000 | ) | 3,000 |
| ||
Provision for doubtful accounts |
| 210,000 |
| 537,000 |
| ||
Stock-based compensation |
| 128,000 |
| 142,000 |
| ||
Changes in operating assets and liabilities: |
|
|
|
|
| ||
Accounts receivable |
| (1,646,000 | ) | 2,440,000 |
| ||
Costs and estimated earnings in excess of billing on uncompleted contracts |
| (4,571,000 | ) | (23,000 | ) | ||
Income tax receivable |
| — |
| (626,000 | ) | ||
Other receivables |
| 41,000 |
| (35,000 | ) | ||
Prepaid expenses and other current assets |
| (4,000 | ) | 138,000 |
| ||
Other assets |
| (38,000 | ) | 27,000 |
| ||
Accounts payable |
| (71,000 | ) | (727,000 | ) | ||
Accrued liabilities |
| 1,836,000 |
| (438,000 | ) | ||
Billings in excess of costs and estimated earnings on uncompleted contracts |
| 350,000 |
| 95,000 |
| ||
Deferred lease obligations |
| (134,000 | ) | (111,000 | ) | ||
Net cash (used in) provided by operating activities |
| (1,737,000 | ) | 1,280,000 |
| ||
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Cash flows from investing activities: |
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Purchase of equipment and leasehold improvements |
| (241,000 | ) | (66,000 | ) | ||
Proceeds from sale of equipment |
| 30,000 |
| — |
| ||
Payments for business acquisitions |
| — |
| (1,009,000 | ) | ||
Net cash used in investing activities |
| (211,000 | ) | (1,075,000 | ) | ||
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Cash flows from financing activities: |
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Changes in excess of outstanding checks over bank balance |
| 310,000 |
| 430,000 |
| ||
Payments on notes payable |
| (20,000 | ) | (26,000 | ) | ||
Borrowings under line of credit |
| 5,470,000 |
| — |
| ||
Repayments of line of credit |
| (5,470,000 | ) | — |
| ||
Principal payments on capital lease obligations |
| (81,000 | ) | (96,000 | ) | ||
Proceeds from sales of common stock under employee stock purchase plan |
| 47,000 |
| 46,000 |
| ||
Net cash provided by financing activities |
| 256,000 |
| 354,000 |
| ||
Net (decrease) increase in cash and cash equivalents |
| (1,692,000 | ) | 559,000 |
| ||
Cash and cash equivalents at beginning of the period |
| 8,445,000 |
| 8,144,000 |
| ||
Cash and cash equivalents at end of the period |
| $ | 6,753,000 |
| $ | 8,703,000 |
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Supplemental disclosures of cash flow information: |
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Cash paid during the period for: |
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Interest |
| $ | 28,000 |
| $ | 21,000 |
|
Income taxes |
| 2,000 |
| 1,000 |
| ||
Supplemental disclosures of noncash investing and financing activities: |
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|
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Equipment acquired under capital lease obligations |
| $ | 51,000 |
| $ | — |
|
Purchase price payable |
| 2,000,000 |
| 1,323,000 |
| ||