Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 29, 2024 | May 01, 2024 | |
Cover [Abstract] | ||
Entity Central Index Key | 0001370450 | |
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Mar. 29, 2024 | |
Entity File Number | 001-33076 | |
Entity Registrant Name | WILLDAN GROUP, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 14-1951112 | |
Entity Address, Address Line One | 2401 East Katella Avenue | |
Entity Address, Address Line Two | Suite 300 | |
Entity Address, City or Town | Anaheim | |
Entity Address, Postal Zip Code | 92806 | |
Entity Address, State or Province | CA | |
City Area Code | 800 | |
Local Phone Number | 424-9144 | |
Title of 12(b) Security | Common Stock, par value $0.01 per share | |
Trading Symbol | WLDN | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 13,817,074 | |
Current Fiscal Year End Date | --12-27 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2024 | |
Amendment Flag | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 29, 2024 | Dec. 29, 2023 |
Current assets: | ||
Cash and cash equivalents | $ 46,925 | $ 23,397 |
Restricted cash | 0 | 0 |
Accounts receivable, net of allowance for doubtful accounts of $690 and $866 at March 29, 2024 and December 29, 2023, respectively | 50,792 | 69,677 |
Contract assets | 82,409 | 93,885 |
Other receivables | 552 | 1,169 |
Prepaid expenses and other current assets | 5,863 | 3,888 |
Total current assets | 186,541 | 192,016 |
Equipment and leasehold improvements, net | 27,539 | 27,097 |
Goodwill | 131,144 | 131,144 |
Right-of-use assets | 12,803 | 12,465 |
Other intangible assets, net | 30,085 | 31,956 |
Other assets | 4,832 | 4,949 |
Deferred income taxes, net | 14,956 | 15,961 |
Total assets | 407,900 | 415,588 |
Current liabilities: | ||
Accounts payable | 34,518 | 33,193 |
Accrued liabilities | 38,411 | 54,129 |
Contract liabilities | 16,427 | 13,183 |
Notes payable | 8,924 | 8,452 |
Finance lease obligations | 1,111 | 1,186 |
Lease liability | 4,677 | 4,537 |
Total current liabilities | 104,068 | 114,680 |
Notes payable, less current portion | 86,571 | 88,979 |
Finance lease obligations, less current portion | 1,112 | 1,184 |
Lease liability, less current portion | 9,948 | 9,758 |
Other noncurrent liabilities | 686 | 1,142 |
Total liabilities | 202,385 | 215,743 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Preferred stock, $0.01 par value, 10,000 shares authorized, no shares issued and outstanding | ||
Common stock, $0.01 par value, 40,000 shares authorized; 13,817 and 13,682 shares issued and outstanding at March 29, 2024 and December 29, 2023, respectively | 138 | 137 |
Additional paid-in capital | 188,088 | 185,795 |
Accumulated other comprehensive loss | (230) | (664) |
Retained earnings | 17,519 | 14,577 |
Total stockholders' equity | 205,515 | 199,845 |
Total liabilities and stockholders' equity | $ 407,900 | $ 415,588 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Mar. 29, 2024 | Dec. 29, 2023 |
Accounts Receivable, after Allowance for Credit Loss, Current | ||
Accounts receivable, allowance for doubtful accounts | $ 690 | $ 866 |
Preferred stock | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 40,000,000 | 40,000,000 |
Common stock, shares issued (in shares) | 13,817,000 | 13,682,000 |
Common stock, shares outstanding (in shares) | 13,817,000 | 13,682,000 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 29, 2024 | Mar. 31, 2023 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | ||
Contract revenue | $ 122,489 | $ 102,603 |
Direct costs of contract revenue (inclusive of directly related depreciation and amortization): | ||
Salaries and wages | 21,512 | 20,410 |
Subcontractor services and other direct costs | 53,559 | 40,912 |
Total direct costs of contract revenue | 75,071 | 61,322 |
Gross profit | 47,418 | 41,281 |
General and administrative expenses: | ||
Salaries and wages, payroll taxes and employee benefits | 26,509 | 22,385 |
Facilities and facility related | 2,445 | 2,278 |
Stock-based compensation | 1,390 | 1,533 |
Depreciation and amortization | 3,592 | 4,200 |
Other | 8,121 | 6,871 |
Total general and administrative expenses | 42,057 | 37,267 |
Income (Loss) from operations | 5,361 | 4,014 |
Other income (expense): | ||
Interest expense, net | (2,137) | (2,466) |
Other, net | 704 | 140 |
Total other expense, net | (1,433) | (2,326) |
Income (Loss) before income taxes | 3,928 | 1,688 |
Income tax (benefit) expense | 986 | 756 |
Net income (loss) | 2,942 | 932 |
Other comprehensive income (loss): | ||
Unrealized gain (loss) on derivative contracts, net of tax | 434 | |
Comprehensive income (loss) | $ 3,376 | $ 932 |
Earnings (Loss) per share: | ||
Basic (in dollars per share) | $ 0.22 | $ 0.07 |
Diluted (in dollars per share) | $ 0.21 | $ 0.07 |
Weighted-average shares outstanding: | ||
Basic (in shares) | 13,605 | 13,266 |
Diluted (in shares) | 13,910 | 13,470 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Total |
Balance at Dec. 30, 2022 | $ 133 | $ 177,718 | $ 3,651 | $ 181,502 | |
Balance (in shares) at Dec. 30, 2022 | 13,296 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Shares of common stock issued in connection with employee stock purchase plan | $ 1 | 1,391 | 1,392 | ||
Shares of common stock issued in connection with employee stock purchase plan (in shares) | 92 | ||||
Shares used to pay taxes on stock grants | (124) | (124) | |||
Shares used to pay taxes on stock grants (in shares) | (7) | ||||
Issuance of restricted stock award and units | $ 1 | (1) | |||
Issuance of restricted stock award and units (in shares) | 108 | ||||
Stock-based compensation expense | 1,533 | 1,533 | |||
Net Income (Loss) | 932 | 932 | |||
Balance at Mar. 31, 2023 | $ 135 | 180,517 | 4,583 | 185,235 | |
Balance (in shares) at Mar. 31, 2023 | 13,489 | ||||
Balance at Dec. 29, 2023 | $ 137 | 185,795 | $ (664) | 14,577 | $ 199,845 |
Balance (in shares) at Dec. 29, 2023 | 13,682 | 13,682 | |||
Increase (Decrease) in Stockholders' Equity | |||||
Shares of common stock issued in connection with employee stock purchase plan | $ 1 | 1,401 | $ 1,402 | ||
Shares of common stock issued in connection with employee stock purchase plan (in shares) | 86 | ||||
Shares of common stock issued in connection with incentive stock plan | 281 | 281 | |||
Shares of common stock issued in connection with incentive stock plan (in shares) | 19 | ||||
Shares used to pay taxes on stock grants | $ (1) | (778) | (779) | ||
Shares used to pay taxes on stock grants (in shares) | (32) | ||||
Issuance of restricted stock award and units | $ 1 | (1) | |||
Issuance of restricted stock award and units (in shares) | 62 | ||||
Stock-based compensation expense | 1,390 | 1,390 | |||
Net Income (Loss) | 2,942 | 2,942 | |||
Net unrealized gain on derivative contracts | 434 | 434 | |||
Balance at Mar. 29, 2024 | $ 138 | $ 188,088 | $ (230) | $ 17,519 | $ 205,515 |
Balance (in shares) at Mar. 29, 2024 | 13,817 | 13,817 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 29, 2024 | Mar. 31, 2023 | |
Cash flows from operating activities: | ||
Net income (loss) | $ 2,942 | $ 932 |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 3,592 | 4,200 |
Other non-cash items | 92 | 85 |
Deferred income taxes, net | 1,005 | 782 |
(Gain) loss on sale/disposal of equipment | (13) | (10) |
Provision for doubtful accounts | (100) | 81 |
Stock-based compensation | 1,390 | 1,533 |
Changes in operating assets and liabilities, net of effects from business acquisitions: | ||
Accounts receivable | 18,985 | 8,204 |
Contract assets | 11,476 | 7,819 |
Other receivables | 617 | (9) |
Prepaid expenses and other current assets | (1,975) | 1,023 |
Other assets | 117 | (3,532) |
Accounts payable | 1,325 | 479 |
Accrued liabilities | (15,740) | (7,883) |
Contract liabilities | 3,244 | 2,941 |
Right-of-use assets | (8) | 647 |
Net cash (used in) provided by operating activities | 26,949 | 17,292 |
Cash flows from investing activities: | ||
Purchase of equipment, software, and leasehold improvements | (1,971) | (3,488) |
Proceeds from sale of equipment | 19 | 13 |
Net cash used in investing activities | (1,952) | (3,475) |
Cash flows from financing activities: | ||
Payment on restricted cash | (10,679) | |
Payments on notes payable | (153) | (485) |
Repayments under term loan facility and line of credit | (1,875) | (5,250) |
Principal payments on finance leases | (345) | (303) |
Proceeds from stock option exercise | 281 | |
Proceeds from sales of common stock under employee stock purchase plan | 1,402 | 1,392 |
Cash used to pay taxes on stock grants | (779) | (124) |
Net cash (used in) provided by financing activities | (1,469) | (15,449) |
Net increase (decrease) in cash, cash equivalents and restricted cash | 23,528 | (1,632) |
Cash, cash equivalents and restricted cash at beginning of period | 23,397 | 19,485 |
Cash, cash equivalents and restricted cash at end of period | 46,925 | 17,853 |
Cash paid (received) during the period for: | ||
Interest | 2,081 | 2,424 |
Income taxes | 2 | (77) |
Supplemental disclosures of noncash investing and financing activities: | ||
Equipment acquired under finance leases | $ 198 | $ 48 |
ORGANIZATION AND OPERATIONS OF
ORGANIZATION AND OPERATIONS OF THE COMPANY | 3 Months Ended |
Mar. 29, 2024 | |
ORGANIZATION AND OPERATIONS OF THE COMPANY | |
ORGANIZATION AND OPERATIONS OF THE COMPANY | 1. ORGANIZATION AND OPERATIONS OF THE COMPAN Y Willdan Group, Inc. (“Willdan” or the “Company”) is a provider of professional, technical and consulting services to utilities, private industry, and public agencies at all levels of government. As resource and infrastructure needs undergo continuous change, the Company helps organizations and their communities evolve and thrive by providing a wide range of technical services for energy solutions, and government infrastructure. Through engineering, program management, policy advisory, and software and data management, the Company designs and delivers trusted, comprehensive, innovative, and proven solutions to improve efficiency, resiliency, and sustainability in energy and infrastructure. The Company’s broad portfolio of services operates within two financial reporting segments: (1) Energy and (2) Engineering and Consulting. The interfaces and synergies between these segments are important elements of the Company’s strategy to design and deliver trusted, comprehensive, innovative, and proven solutions for its customers. The accounting policies followed by the Company are set forth in Part II, Item 8, Note 1, Organization and Operations of the Company Fiscal Years The Company operates and reports its annual financial results based on 52 or 53-week periods ending on the Friday closest to December 31. The Company operates and reports its quarterly financial results based on the 13-week period ending on the Friday closest to June 30, September 30, and December 31 and the 13 or 14-week period ending on the Friday closest to March 31, as applicable. Fiscal year 2024, which ends on December 27, 2024, will be comprised of 52 weeks, with all quarters consisting of 13 weeks each. Fiscal year 2023, which ended on December 29, 2023, was comprised of 52 weeks, with all quarters consisting of 13 weeks each. All references to years in the notes to consolidated financial statements represent fiscal years. Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements. Estimates also affect the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. |
RECENT ACCOUNTING PRONOUNCEMENT
RECENT ACCOUNTING PRONOUNCEMENTS | 3 Months Ended |
Mar. 29, 2024 | |
RECENT ACCOUNTING PRONOUNCEMENTS | |
RECENT ACCOUNTING PRONOUNCEMENTS | 2. RECENT ACCOUNTING PRONOUNCEMENTS Accounting Pronouncements Recently Issued In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU’) No. 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” (“ASU 2023-09”). ASU 2023-09 amends the rules on income tax disclosures to require entities to disclose specific categories in the rate reconciliation, the income or loss from continuing operations before income tax expense or benefit (separated between domestic and foreign) and income tax expense or benefit from continuing operations (separated by federal, state, and foreign). In addition, ASU 2023-09 requires entities to disclose their income tax payments to international, federal, state, and local jurisdictions, among other changes. The amendments can be applied on a prospective basis although retrospective application is permitted. The amendments are effective for the fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the impact this update will have on its Consolidated Financial Statements. In November 2023, the FASB issued ASU No. 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures” (“ASU 2023-07”). ASU 2023-07 expands segment disclosure requirements through enhanced disclosures related to significant segment expenses that are regularly provided to the chief operating decision maker (“CODM”), a description of other segment items by reportable segment, and any additional measures of a segment's profit or loss used by the CODM when deciding how to allocate resources. All disclosure requirements under ASU 2023-07 are also required for public entities with a single reportable segment. The amendments are effective for the fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The Company is currently evaluating the impact this update will have on its Consolidated Financial Statements. In October 2023, the FASB issued ASU No. 2023-06, “Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative” (“ASU 2023-06”). ASU 2023-06 amends U.S. GAAP to reflect updates and simplifications to certain disclosure and presentation requirements referred to FASB by the Securities and Exchange Commission (“SEC”). The targeted amendments incorporate 14 of the 27 disclosures referred by the SEC into codification. Each amendment in ASU 2023-06 is effective on either the date on which the SEC’s removal of the related disclosure requirement from Regulation S-X or Regulation S-K becomes effective, or on June 30, 2027, if the SEC has not removed the requirements by that date. The Company is currently evaluating the impact this update will have on its Consolidated Financial Statements. |
REVENUES
REVENUES | 3 Months Ended |
Mar. 29, 2024 | |
REVENUES | |
REVENUES | 3. REVENUES The Company enters into contracts with its clients that contain various types of pricing provisions, including fixed price, time-and-materials, and unit-based provisions. The Company recognizes revenues in accordance with ASU 2014-09, Revenue from Contracts with Customer, codified as ASC Topic 606 and the related amendments (collectively “ASC 606”). As such, the Company identifies a contract with a customer, identifies the performance obligations in the contract, determines the transaction price, allocates the transaction price to each performance obligation in the contract and recognizes revenues when (or as) the Company satisfies a performance obligation. The following table reflects the Company’s two reportable segments and the types of contracts that each most commonly enters into for revenue generating activities. Segment Contract Type Revenue Recognition Method Time-and-materials Time-and-materials Energy Unit-based Unit-based Software license Unit-based Fixed price Percentage-of-completion Time-and-materials Time-and-materials Engineering and Consulting Unit-based Unit-based Fixed price Percentage-of-completion Revenue on the vast majority of the Company’s contracts is recognized over time because of the continuous transfer of control to the customer. Revenue on fixed price contracts is recognized on the percentage-of-completion method based generally on the ratio of direct costs incurred-to-date to estimated total direct costs at completion. The Company uses the percentage-of-completion method to better match the level of work performed at a certain point in time in relation to the effort that will be required to complete a project. In addition, the percentage-of-completion method is a common method of revenue recognition in the Company’s industry. Many of the Company’s fixed price contracts involve a high degree of subcontracted fixed price effort and, usually, are relatively short in duration, thereby lowering the risks of not properly estimating the percent complete. Revenue on time-and-materials and unit-based contracts is recognized as the work is performed in accordance with the specific rates and terms of the contract. The Company recognizes revenues for time-and-materials contracts based upon the actual hours incurred during a reporting period at contractually agreed upon rates per hour and also includes in revenue all reimbursable costs incurred during a reporting period. Certain of the Company’s time-and-materials contracts are subject to maximum contract values and, accordingly, when revenue is expected to exceed the maximum contract value, these contracts are generally recognized under the percentage-of-completion method, consistent with fixed price contracts. For unit-based contracts, the Company recognizes the contract price of units of a basic production product as revenue when the production product is delivered during a period. Revenue for amounts that have been billed but not earned is deferred, and such deferred revenue is referred to as contract liabilities in the accompanying condensed consolidated balance sheets. The Company also derives revenue from software licenses and professional services and maintenance fees. In accordance with ASC 606, the Company performs an assessment of each contract to identify the performance obligations, determine the overall transaction price for the contract, allocate the transaction price to the performance obligations, and recognize the revenue when the performance obligations are satisfied. The Company utilizes the residual approach by which it estimates the standalone selling price by reference to the total transaction price less the sum of the observable standalone selling prices of other goods or services promised in the contract. The software license revenue is typically recognized at a point in time when control is transferred to the client, which is defined as the point in time when the client can use and benefit from the license. The software license is delivered before related services are provided and is functional without services, updates, or technical support. Related professional services include training and support services in which the standalone selling price is determined based on an input measure of hours incurred to total estimated hours and is recognized over time, which usually is the life of the contract. To determine the proper revenue recognition method for contracts, the Company evaluates whether two or more contracts should be combined and accounted for as one single contract and whether the combined contract should be accounted for as one performance obligation. With respect to the Company’s contracts, it is rare that multiple contracts should be combined into a single performance obligation. This evaluation requires significant judgment and the decision to combine a group of contracts or separate a single contract into multiple performance obligations could change the amount of revenue and profit recorded in a given period. Contracts are considered to have a single performance obligation if the promise to transfer the individual goods or services is not separately identifiable from other promises in the contracts, which is mainly because the Company provides a significant service of integrating a complex set of tasks and components into a single project or capability. The Company may enter into contracts that include separate phases or elements. If each phase or element is negotiated separately based on the technical resources required and/or the supply and demand for the services being provided, the Company evaluates if the contracts should be segmented. If certain criteria are met, the contracts would be segmented which could result in revenues being assigned to the different elements or phases with different rates of profitability based on the relative value of each element or phase to the estimated total contract revenue. Segmented contracts may comprise up to approximately Contracts that cover multiple phases or elements of the project or service lifecycle (development, construction and maintenance and support) may be considered to have multiple performance obligations even when they are part of a single contract. For contracts with multiple performance obligations, the Company allocates the transaction price to each performance obligation using the best estimate of the standalone selling price of each distinct good or service in the contract. For the periods presented, the value of the separate performance obligations under contracts with multiple performance obligations (generally measurement and verification tasks under certain energy performance contracts) were not material. In cases where the Company does not provide the distinct good or service on a standalone basis, the primary method used to estimate standalone selling price is the expected cost plus a margin approach, under which the Company forecasts the Company’s expected costs of satisfying a performance obligation and then adds an appropriate margin for the distinct good or service. The Company provides quality of workmanship warranties to customers that are included in the sale and are not priced or sold separately or do not provide customers with a service in addition to assurance of compliance with agreed-upon specifications and industry standards. The Company does not consider these types of warranties to be separate performance obligations. In some cases, the Company has a master service or blanket agreement with a customer under which each task order releases the Company to perform specific portions of the overall scope in the service contract. Each task order is typically accounted for as a separate contract because the task order establishes the enforceable rights and obligations, and payment terms. Under ASC 606, variable consideration should be considered when determining the transaction price and estimates should be made for the variable consideration component of the transaction price, as well as assessing whether an estimate of variable consideration is constrained. For certain of the Company’s contracts, variable consideration can arise from modifications to the scope of services resulting from unapproved change orders or customer claims. Variable consideration is included in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. The Company estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on assessments of legal enforceability, the Company’s performance, and all information (historical, current and forecasted) that is reasonably available to the Company. Due to the nature of the work required to be performed on many of the Company’s performance obligations, the estimation of total revenue and cost at completion is complex, subject to many variables and requires significant judgment. As a significant change in one or more of these estimates could affect the profitability of the Company’s contracts, the Company reviews and updates the Company’s contract-related estimates regularly through a company-wide disciplined project review process in which management reviews the progress and execution of the Company’s performance obligations and the estimate at completion (“EAC”). As part of this process, management reviews information including, but not limited to, any outstanding key contract matters, progress towards completion and the related program schedule and the related changes in estimates of revenues and costs. Management must make assumptions and estimates regarding labor productivity and availability, the complexity of the work to be performed, the cost and availability of materials, the performance of subcontractors, and the availability and timing of funding from the customer, among other variables. The Company recognizes adjustments in estimated profit on contracts under the cumulative catch-up method. Under this method, the impact of the adjustment on profit recorded to date is recognized in the period the adjustment is identified. Revenue and profit in future periods of contract performance is recognized using the adjusted estimate. If at any time the estimate of contract profitability indicates an anticipated loss on the contract, the Company recognizes the full amount of estimated loss in the period it is identified. Contracts are often modified to account for changes in contract specifications and requirements. The Company considers contract modifications to exist when the modification either creates new rights or obligations or changes the existing enforceable rights or obligations. Most of the Company’s contract modifications are for goods or services that are not distinct from existing contracts due to the significant integration provided in the context of the contract and are accounted for as if they were part of the original contract. The effect of a contract modification that is not distinct from the existing contract on the transaction price and the Company’s measure of progress for the performance obligation to which it relates is recognized as an adjustment to revenue (either as an increase in or a reduction of revenue) on a cumulative catch-up basis. For contract modifications that result in the promise to deliver goods or services that are distinct from the existing contract and the increase in price of the contract is for the same amount as the standalone selling price of the additional goods or services included in the modification, the Company accounts for such contract modifications as a separate contract. The Company includes claims to vendors, subcontractors and others as a receivable and a reduction in recognized costs when enforceability of the claim is established by the contract and the amounts are reasonably estimable and probable of being recovered. The amounts are recorded up to the extent of the lesser of the amounts management expects to recover or to costs incurred. Billing practices are governed by the contract terms of each project based upon costs incurred, achievement of milestones or pre-agreed schedules. Billings do not necessarily correlate with revenue recognized using the percentage-of-completion method of revenue recognition. Direct costs of contract revenue consist primarily of that portion of technical and nontechnical salaries and wages that has been incurred in connection with revenue producing projects. Direct costs of contract revenue also include production expenses, subcontractor services and other expenses that are incurred in connection with revenue producing projects. Direct costs of contract revenue exclude that portion of technical and nontechnical salaries and wages related to marketing efforts, vacations, holidays and other time not spent directly generating revenue under existing contracts. Such costs are included in general and administrative expenses. Additionally, payroll taxes, bonuses and employee benefit costs for all Company personnel are included in general and administrative expenses in the accompanying condensed consolidated statements of comprehensive income since no allocation of these costs is made to direct costs of contract revenue. No allocation of facilities costs is made to direct costs of contract revenue. Other companies may classify as direct costs of contract revenue some of the costs that the Company classifies as general and administrative costs. The Company expenses direct costs of contract revenue when incurred. Included in revenue and costs are all reimbursable costs for which the Company has the risk or on which the fee was based at the time of bid or negotiation. No revenue or cost is recorded for costs in which the Company acts solely in the capacity of an agent and has no risks associated with such costs. Accounts receivable are carried at original invoice amount less an estimate made for doubtful accounts based upon a review of all outstanding amounts on a quarterly basis. Management determines allowances for doubtful accounts through specific identification of amounts considered to be uncollectible and potential write-offs, plus a non-specific allowance for other amounts for which some potential loss has been determined to be probable based on current and past experience. The Company’s historical credit losses have been minimal with governmental entities and large public utilities, but disputes may arise related to these receivable amounts. Accounts receivable are written off when deemed uncollectible. Recoveries of accounts receivable previously written off are recorded when received. Retainage, included in contract assets, represents amounts withheld from billings to the Company’s clients pursuant to provisions in the contracts and may not be paid to the Company until specific tasks are completed or the project is completed and, in some instances, for even longer periods. As of March 29, 2024 and December 29, 2023, contract assets included retainage of approximately $16.1 million and $14.3 million, respectively. |
SUPPLEMENTAL FINANCIAL STATEMEN
SUPPLEMENTAL FINANCIAL STATEMENT DATA | 3 Months Ended |
Mar. 29, 2024 | |
SUPPLEMENTAL FINANCIAL STATEMENT DATA | |
SUPPLEMENTAL FINANCIAL STATEMENT DATA | 4. SUPPLEMENTAL FINANCIAL STATEMENT DATA Restricted Cash The following table provides a reconciliation of cash and cash equivalents, and restricted cash reported within the condensed consolidated balance sheets to the total cash, cash equivalents, and restricted cash shown in the consolidated statements of cash flows: March 29, December 29, 2024 2023 (in thousands) Cash and cash equivalents $ 46,925 $ 23,397 Restricted cash — — Total cash, cash equivalents, and restricted cash shown in the consolidated statement of cash flows $ 46,925 $ 23,397 Under certain utility contracts, the Company periodically receives cash deposits to be held in trust for the payment of energy incentive rebates to be sent directly to the utility’s end-customer on behalf of the utility. The Company acts solely as the utility’s agent to distribute these funds to the end-customer and, accordingly, the Company classifies these contractually restricted funds as restricted cash. Because these funds are held in trust for pass through to the utility’s customers and have no impact on the Company’s working capital or operating cash flows, these cash receipts are presented in the consolidated statement of cash flows as financing cash inflows, “Receipt of restricted cash”, with the subsequent payments classified as financing cash outflows, “Payment of restricted cash.” Equipment and Leasehold Improvements March 29, December 29, 2024 2023 (in thousands) Furniture and fixtures $ 4,403 $ 4,379 Computer hardware and software 46,384 44,594 Leasehold improvements 3,466 3,382 Equipment under finance leases 6,245 6,139 Automobiles, trucks, and field equipment 3,388 3,373 Subtotal 63,886 61,867 Accumulated depreciation and amortization (36,347) (34,770) Equipment and leasehold improvements, net $ 27,539 $ 27,097 Included in accumulated depreciation and amortization is $0.4 million and $1.3 million of amortization expense related to equipment held under finance leases for the three months ended March 29, 2024 and for fiscal year 2023, respectively. Accrued Liabilities March 29, December 29, 2024 2023 (in thousands) Accrued subcontractor costs $ 22,896 $ 30,196 Accrued bonuses 4,542 14,423 Employee withholdings 4,779 3,123 Compensation and payroll taxes 4,163 3,125 Rebate and other — 139 Accrued accounting costs and taxes 2,031 3,123 Total accrued liabilities $ 38,411 $ 54,129 Goodwill December 29, Additional Additions / March 29, 2023 Purchase Cost Adjustments 2024 (in thousands) Reporting Unit: Energy $ 129,375 $ — $ — $ 129,375 Engineering and Consulting 1,769 — — 1,769 $ 131,144 $ — $ — $ 131,144 Intangible Assets March 29, 2024 December 29, 2023 Gross Accumulated Gross Accumulated Amortization Amount Amortization Amount Amortization Period (in thousands) (in years) Finite: Backlog $ 8,306 $ 8,148 $ 8,306 $ 8,095 1.0 Tradename 15,936 12,835 15,936 12,695 2.5 - 6.0 Non-compete agreements 1,613 1,452 1,613 1,440 4.0 - 5.0 Developed technology 15,810 14,791 15,810 14,521 8.0 Customer relationships 58,149 32,503 58,149 31,107 5.0 - 8.0 Total intangible assets $ 99,814 $ 69,729 $ 99,814 $ 67,858 |
DERIVATIVE FINANCIAL INSTRUMENT
DERIVATIVE FINANCIAL INSTRUMENTS | 3 Months Ended |
Mar. 29, 2024 | |
DERIVATIVE FINANCIAL INSTRUMENTS | |
DERIVATIVE FINANCIAL INSTRUMENTS | 5. DERIVATIVE FINANCIAL INSTRUMENTS The Company uses certain interest rate derivative contracts to hedge interest rate exposures on its variable rate debt. The Company’s hedging program is not designated for trading or speculative purposes. The Company recognizes derivative instruments as either assets or liabilities on the accompanying condensed consolidated balance sheets at fair value. The Company records changes in the fair value (i.e., gains or losses) of the derivatives that have been designated as cash flow hedges in its consolidated balance sheets as accumulated other comprehensive income (loss) and in its consolidated statements of comprehensive income (loss) as a loss or gain on cash flow hedge valuation. On November 30, 2023, the Company entered into an interest rate swap agreement that the Company designated as cash flow hedge to fix the variable interest rate on a portion of the Company’s term loan (see Note 6, “Debt Obligations” in the three months ended March 29, 2024 Fair Value of Derivative Instruments as of Balance Sheet Location March 29, 2024 December 29, 2023 (in thousands) Interest rate swap agreement Current assets $ 140 $ 46 Interest rate swap agreement Other noncurrent liabilities (431) (887) The impact of the effective portions of derivative instruments in cash flow hedging relationships and fair value relationships on other comprehensive income (loss) was $0.4 million for the three months ended March 29, 2024. The accumulated balances and reporting period activities for the periods below related to reclassifications out of accumulated other comprehensive income (loss) are summarized as follows: Gain (Loss) on Accumulated Other Derivative Instruments Comprehensive Income (Loss) (in thousands) Balances at December 29, 2023 $ (664) $ (664) Other comprehensive income (loss) before reclassifications 549 549 Amounts reclassified from accumulated other comprehensive income (loss): — — Income tax benefit (expense) related to derivative instruments (115) (115) Net current-period other comprehensive income (loss) 434 434 Balances at March 29, 2024 $ (230) $ (230) |
DEBT OBLIGATIONS
DEBT OBLIGATIONS | 3 Months Ended |
Mar. 29, 2024 | |
DEBT OBLIGATIONS | |
DEBT OBLIGATIONS | 6. DEBT OBLIGATIONS Debt obligations, excluding obligations under finance leases (see Note 7, Leases, March 29, December 29, 2024 2023 (in thousands) Outstanding borrowings on Term Loan $ 96,250 $ 98,125 Outstanding borrowings on Revolving Credit Facility — — Other debt agreements 174 327 Total debt 96,424 98,452 Issuance costs and debt discounts (929) (1,021) Subtotal 95,495 97,431 Less current portion of long-term debt 8,924 8,452 Long-term debt portion $ 86,571 $ 88,979 The credit agreement governing the Company’s Term Loan and Revolving Credit Facility require the Company to comply with certain financial obligations, including a maximum Net Leverage Ratio and a minimum Fixed Charge Coverage Ratio (as defined in the credit agreement governing the Term Loan and Revolving Credit Facility). The credit agreement also contains customary restrictive covenants. As of March 29, 2024, the Company was in compliance with all these covenants. In addition, as of March 29, 2024, the Company’s composite interest rate, exclusive of the effects of upfront fees, undrawn fees and issuance cost amortization, was 7.7% . |
LEASES
LEASES | 3 Months Ended |
Mar. 29, 2024 | |
LEASES | |
LEASES | 7. LEASES The Company leases certain office facilities under long-term, non-cancellable operating leases that expire at various dates through 2029. In addition, the Company is obligated under finance leases for certain furniture and office equipment that expire at various dates through 2028. From time to time, the Company enters into non-cancelable leases for some of its facility and equipment needs. These leases allow the Company to conserve cash by paying a monthly lease rental fee for the use of facilities and equipment rather than purchasing them. The Company’s leases typically have remaining terms ranging from one to eight years , some of which may include options to extend the leases for up to five years , and some of which may include options to terminate the leases within one year . Currently, all of the Company’s leases contain fixed payment terms. The Company may decide to cancel or terminate a lease before the end of its term, in which case the Company is typically liable to the lessor for the remaining lease payments under the term of the lease. Additionally, all of the Company’s month-to-month leases are cancelable by the Company or the lessor, at any time, and are not included in the Company’s right-of-use asset or lease liability. As of March 29, 2024, the Company had no leases with residual value guarantees. Typically, the Company has purchase options on the equipment underlying its long-term leases. The Company may exercise some of these purchase options when the need for equipment is on-going and the purchase option price is attractive. Nonperformance-related default covenants, cross-default provisions, subjective default provisions and material adverse change clauses contained in material lease agreements, if any, are also evaluated to determine whether those clauses affect lease classification in accordance with ASC Topic 842-10-25. Leases are accounted for as operating or financing leases, depending on the terms of the lease. Financing Leases The Company leases certain equipment under financing leases. The economic substance of the leases is a financing transaction for acquisition of equipment and leasehold improvements. Accordingly, the right-of-use assets for these leases are included in the balance sheets in equipment and leasehold improvements, net of accumulated depreciation, with a corresponding amount recorded in current portion of financing lease obligations or noncurrent portion of financing lease obligations, as appropriate. The financing lease assets are amortized over the life of the lease or, if shorter, the life of the leased asset, on a straight-line basis and included in depreciation expense. The interest associated with financing lease obligations is included in interest expense. Right-of-use assets Operating leases are included in right-of-use assets, and current portion of lease liability and noncurrent portion of lease liability, as appropriate. Right-of-use assets and lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As most of the Company’s leases do not provide an implicit rate to calculate present value, the Company determines this rate by estimating the Company’s incremental borrowing rate at the lease commencement date. The right-of-use asset also includes any lease payments made and initial direct costs incurred at lease commencement and excludes lease incentives. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. The following is a summary of the Company’s lease expense: Three Months Ended March 29, March 31, 2024 2023 (in thousands) Operating lease cost $ 1,527 $ 1,493 Sublease Income (14) — Finance lease cost: Amortization of assets 355 311 Interest on lease liabilities 31 22 Total net lease cost $ 1,899 $ 1,826 The following is a summary of lease information presented on the Company’s consolidated balance sheet: March 29, December 29, 2024 2023 (in thousands) Operating leases: Right-of-use assets $ 12,803 $ 12,465 Lease liability $ 4,677 $ 4,537 Lease liability, less current portion 9,948 9,758 Total lease liabilities $ 14,625 $ 14,295 Finance leases (included in equipment and leasehold improvements, net): Equipment and leasehold improvements, net $ 6,245 $ 6,139 Accumulated depreciation (4,099) (3,837) Total equipment and leasehold improvements, net $ 2,146 $ 2,302 Finance lease obligations $ 1,111 $ 1,186 Finance lease obligations, less current portion 1,112 1,184 Total finance lease obligations $ 2,223 $ 2,370 Weighted average remaining lease term (in years): Operating Leases 3.32 3.43 Finance Leases 2.25 2.31 Weighted average discount rate: Operating Leases 6.67 % 6.09 % Finance Leases 5.59 % 5.19 % Rent expense was $1.7 million and $1.6 million for the three months ended March 29, 2024 and March 31, 2023, respectively. The following is a summary of other information and supplemental cash flow information related to finance and operating leases: Three Months Ended March 29, March 31, 2024 2023 (in thousands) Cash paid for amounts included in the measurement of lease liabilities: Operating cash flow from operating leases $ 1,569 $ 1,570 Operating cash flow from finance leases 31 22 Financing cash flow from finance leases 345 303 Right-of-use assets obtained in exchange for lease liabilities: Operating leases $ 1,627 $ 2,120 The following is a summary of the maturities of lease liabilities as of March 29, 2024: Operating Finance (in thousands) Fiscal year: Remainder of 2024 $ 4,254 $ 1,013 2025 5,069 782 2026 4,235 448 2027 1,935 112 2028 1,108 18 2029 and thereafter 94 — Total lease payments 16,695 2,373 Less: Imputed interest (2,070) (150) Total lease obligations 14,625 2,223 Less: Current obligations 4,677 1,111 Noncurrent lease obligations $ 9,948 $ 1,112 The imputed interest for finance lease obligations represents the interest component of finance leases that will be recognized as interest expense in future periods. The financing component for operating lease obligations represents the effect of discounting the operating lease payments to their present value. |
COMMITMENTS AND VARIABLE INTERE
COMMITMENTS AND VARIABLE INTEREST ENTITIES | 3 Months Ended |
Mar. 29, 2024 | |
COMMITMENTS AND VARIABLE INTEREST ENTITIES | |
COMMITMENTS AND VARIABLE INTEREST ENTITIES | 8. COMMITMENTS AND VARIABLE INTEREST ENTITIES Employee Benefit Plans The Company has a qualified profit sharing plan pursuant to Code Section 401(a) and qualified The Company’s defined contribution plan (the “Plan”) covers employees who have completed three months of service and who have attained 21 years of age. The Company elects to make matching contributions equal to 50% of the participants’ contributions to the Plan, up to 6% of the individual participant’s compensation, and subject to a maximum of $3,000 per employee. Under the Plan, the Company may make discretionary contributions to employee accounts. During the three months ended March 29, 2024 and March 31, 2023, the Company made matching contributions of $1.1 million and $1.0 million, respectively. Variable Interest Entities On March 4, 2016, the Company and the Company’s wholly-owned subsidiary, WES, acquired substantially all of the assets of Genesys and assumed certain specified liabilities of Genesys (collectively, the “Purchase”) pursuant to an Asset Purchase and Merger Agreement, dated as of February 26, 2016 (the “Agreement”), by and among Willdan Group, Inc., WES, WESGEN (as defined below), Genesys and Ronald W. Mineo (“Mineo”) and Robert J. Braun (“Braun” and, together with Mineo, the “Genesys Shareholders”). On March 5, 2016, pursuant to the terms of the Agreement, WESGEN, Inc., a non-affiliated corporation (“WESGEN”), merged (the “Merger” and, together with the Purchase, the “Acquisition”) with Genesys, with Genesys remaining as the surviving corporation. Genesys was acquired to strengthen the Company’s power engineering capability in the northeastern U.S., and also to increase client exposure and experience with universities. Genesys continues to be a professional corporation organized under the laws of the State of New York, wholly-owned by one or more licensed engineers. Pursuant to New York law, the Company does not own capital stock of Genesys. The Company has entered into an agreement with the Shareholder of Genesys pursuant to which the Shareholder will be prohibited from selling, transferring or encumbering the Shareholder’s ownership interest in Genesys without the Company’s consent. Notwithstanding the Company’s rights regarding the transfer of Genesys’s stock, the Company does not have control over the professional decision making of Genesys’s engineering services. The Company has entered into an administrative services agreement with Genesys pursuant to which WES will provide Genesys with ongoing administrative, operational and other non-professional support services. Genesys pays WES a service fee, which consists of all of the costs incurred by WES to provide the administrative services to Genesys plus ten percent of such costs, as well as any other costs that relate to professional service supplies and personnel costs. As a result of the administrative services agreement, the Company absorbs the expected losses of Genesys through its deferral of Genesys’s service fees owed to WES. |
SEGMENT AND GEOGRAPHICAL INFORM
SEGMENT AND GEOGRAPHICAL INFORMATION | 3 Months Ended |
Mar. 29, 2024 | |
SEGMENT AND GEOGRAPHICAL INFORMATION | |
SEGMENT AND GEOGRAPHICAL INFORMATION | 9. SEGMENT AND GEOGRAPHICAL INFORMATION Segment Information The Company’s two segments are Energy, and Engineering and Consulting, and the Company’s chief operating decision maker, which continues to be its chief executive officer, receives and reviews financial information in this format. There were no intersegment sales during the three months ended March 29, 2024 and March 31, 2023. The Company’s chief operating decision maker evaluates the performance of each segment based upon income or loss from operations before income taxes. Certain segment asset information including expenditures for long-lived assets has not been presented as it is not reported to or reviewed by the chief operating decision maker. In addition, enterprise-wide service line contract revenue is not included as it is impracticable to report this information for each group of similar services. Financial information with respect to the reportable segments and reconciliation to the amounts reported in the Company’s Condensed Consolidated Financial Statements is as follows: Engineering Unallocated Consolidated Energy & Consulting Corporate Intersegment Total (in thousands) Fiscal Three Months Ended March 29, 2024 Contract revenue $ 100,746 $ 21,743 $ - $ - $ 122,489 Depreciation and amortization 3,236 356 - - 3,592 Interest expense, net 1 - 2,136 - 2,137 Segment profit (loss) before income tax expense 4,311 2,344 (2,727) - 3,928 Income tax expense (benefit) 1,083 588 (685) - 986 Net income (loss) 3,229 1,756 (2,043) - 2,942 Segment assets (1) 318,808 26,613 85,609 (23,130) 407,900 Fiscal Three Months Ended March 31, 2023 Contract revenue $ 83,285 $ 19,318 $ - $ - $ 102,603 Depreciation and amortization 3,924 276 - - 4,200 Interest expense, net 2 - 2,464 - 2,466 Segment profit (loss) before income tax expense 2,771 2,587 (3,670) - 1,688 Income tax expense (benefit) 1,241 1,158 (1,643) - 756 Net income (loss) 1,530 1,428 (2,026) - 932 Segment assets (1) 323,578 23,587 69,332 (23,130) 393,367 (1) Segment assets are presented net of intercompany receivables. The following tables provide information about disaggregated revenue by contract type, client type and geographical region: Three months ended March 29, 2024 Energy Engineering and Consulting Total (in thousands) Contract Type Time-and-materials $ 8,537 $ 16,399 $ 24,936 Unit-based 46,957 4,511 51,468 Fixed price 45,252 833 46,085 Total (1) $ 100,746 $ 21,743 $ 122,489 Client Type Commercial $ 7,203 $ 1,580 $ 8,783 Government 35,820 20,098 55,918 Utilities (2) 57,723 65 57,788 Total (1) $ 100,746 $ 21,743 $ 122,489 Geography (3) Domestic $ 100,746 $ 21,743 $ 122,489 Three months ended March 31, 2023 Energy Engineering and Consulting Total (in thousands) Contract Type Time-and-materials $ 7,709 $ 14,554 $ 22,263 Unit-based 44,927 3,616 48,543 Fixed price 30,649 1,148 31,797 Total (1) $ 83,285 $ 19,318 $ 102,603 Client Type Commercial $ 6,719 $ 1,164 $ 7,883 Government 26,075 18,095 44,170 Utilities (2) 50,491 59 50,550 Total (1) $ 83,285 $ 19,318 $ 102,603 Geography (3) Domestic $ 83,285 $ 19,318 $ 102,603 (1) Amounts may not add to the totals due to rounding. (2) Includes the portion of revenue related to small business programs paid by the end user/customer. (3) Revenue from the Company’s foreign operations were not material for the three months ended March 29, 2024 and March 31, 2023. Geographical Information Substantially all of the Company’s consolidated revenue was derived from its operations in the U.S. The Company operates through a network of offices spread across 22 U.S. states, the District of Columbia, the Commonwealth of Puerto Rico, and Canada. Revenues from the Company’s Puerto Rican and Canadian operations were not material for the three months ended March 29, 2024 nor the three months ended March 31, 2023. Customer Concentration For the three months ended March 29, 2024 and March 31, 2023, the Company’s top 10 customers accounted for 49.2%, and 52.2%, respectively, of the Company’s consolidated contract revenue. For the three months ended March 29, 2024, the Company had no individual customers that accounted for more than 10% of its consolidated contract revenue . . On a segment basis, the Company had individual customers that accounted for more than 10% of its segment contract revenues. For the three months ended March 29, 2024, the Company derived 10.7% of its Energy segment revenues from one customer, LADWP , and For the three months ended March 31, 2023, the Company derived 13.7% of its Energy segment revenues from one customer, LADWP, and no single customer accounted for 10% or more of its Engineering and Consulting segment revenues. On a geographical basis, the Company’s largest clients are based in California and New York. For the three months ended March 29, 2024 and March 31, 2023, services provided to clients in California accounted for 43.5% and 42.4%, respectively, of the Company’s consolidated contract revenue, and services provided to clients in New York accounted for 27.1% and 24.5%, respectively, of the Company’s consolidated contract revenue. |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Mar. 29, 2024 | |
INCOME TAXES | |
INCOME TAXES | 10. INCOME TAXES Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences of temporary differences between the financial reporting basis and tax basis of the Company’s assets and liabilities, subject to a judgmental assessment of the recoverability of deferred tax assets. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is recorded when it is more likely than not that some of the deferred tax assets may not be realized. Significant judgment is applied when assessing the need for valuation allowances and includes the evaluation of historical income (loss) adjusted for the effects of non-recurring items and the impact of recent business combinations. Areas of estimation include the Company’s consideration of future taxable income which is driven by verifiable signed contracts and ongoing prudent and feasible tax planning strategies. Should a change in circumstances lead to a change in judgment about the utilization of deferred tax assets in future years, the Company would adjust the related valuation allowances in the period that the change in circumstances occurs, along with a corresponding increase or charge to income. At the end of fiscal year 2023, the Company’s total valuation allowance was $1.2 million, remaining unchanged from the end of fiscal year 2022. As of March 29, 2024, the Company assessed all available positive and negative evidence available to determine whether, based on the weight of that evidence, there was a change in judgment related to the utilization of deferred tax assets in future years. The Company concluded that as of March 29, 2024, the valuation allowance for the Company’s deferred tax assets was appropriate in accordance with ASC 740. Consequently, there was no change to the valuation allowance during the three months ended March 29, 2024. For acquired business entities, if the Company identifies changes to acquired deferred tax asset valuation allowances or liabilities related to uncertain tax positions during the measurement period and they relate to new information obtained about facts and circumstances that existed as of the acquisition date, those changes are considered a measurement period adjustment, and the Company records the offset to goodwill. The Company records all other changes to deferred tax asset valuation allowances and liabilities related to uncertain tax positions in current period income tax expense. The Company recognizes the tax benefit from uncertain tax positions if it is more likely than not that the tax positions will be sustained on examination by the tax authorities, based on the technical merits of the position. The tax benefit is measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. The Company recognizes interest and penalties related to unrecognized tax benefits in income tax expense. During the three months ended March 29, 2024, and the three months ended March 31, 2023, the Company did not record a liability for uncertain tax positions. Based on the Company’s estimates and determination of an effective tax rate for the year, the Company recorded an income tax expense of $1.0 million for the three months ended March 29, 2024, compared to an income tax expense of $0.8 million for the three months ended March 31, 2023. During the three months ended March 29, 2024, the difference between the effective tax rate and the federal statutory rate was primarily attributable to state taxes, non-deductible stock compensation, nondeductible executive compensation, research and development tax credits, and the commercial building energy efficiency deduction. During the three months ended March 31, 2023, the difference between the effective tax rate and the federal statutory rate was primarily attributable to state taxes, non-deductible stock compensation, nondeductible executive compensation, research and development tax credits, and the commercial building energy efficiency deduction. |
EARNINGS PER SHARE (EPS)
EARNINGS PER SHARE (EPS) | 3 Months Ended |
Mar. 29, 2024 | |
EARNINGS PER SHARE (EPS) | |
EARNINGS PER SHARE (EPS) | 11. EARNINGS PER SHARE (“EPS”) Basic EPS is computed by dividing net income available to common stockholders by the weighted-average number of common shares outstanding. Diluted EPS is computed by dividing net income by the weighted-average number of common shares outstanding and dilutive potential common shares for the period. Potential common shares include the weighted-average dilutive effects of outstanding stock options and restricted stock awards using the treasury stock method. The following table sets forth the number of weighted-average common shares outstanding used to compute basic and diluted EPS: Three months ended March 29, March 31, 2024 2023 (in thousands, except per share amounts) Net income (loss) $ 2,942 $ 932 Weighted-average common shares outstanding 13,605 13,266 Effect of dilutive stock options and restricted stock awards 305 204 Weighted-average common shares outstanding-diluted 13,910 13,470 Earnings (Loss) per share: Basic $ 0.22 $ 0.07 Diluted $ 0.21 $ 0.07 For the three months ended March 29, 2024 and March 31, 2023, the Company excluded 335,000 and 397,000 common shares subject to outstanding equity awards, respectively, from the calculation of diluted shares because their impact would have been anti-dilutive. |
CONTINGENCIES
CONTINGENCIES | 3 Months Ended |
Mar. 29, 2024 | |
CONTINGENCIES | |
CONTINGENCIES | 12. CONTINGENCIES Claims and Lawsuits The Company is subject to claims and lawsuits from time to time, including those alleging professional errors or omissions that arise in the ordinary course of business against firms that operate in the engineering and consulting professions. The Company carries professional liability insurance, subject to certain deductibles and policy limits, for such claims as they arise and may from time to time establish reserves for litigation that is considered probable of a loss. In accordance with accounting standards regarding loss contingencies, the Company accrues an undiscounted liability for those contingencies where the incurrence of a loss is probable and the amount can be reasonably estimated, and discloses the amount accrued and an estimate of any reasonably possible loss in excess of the amount accrued, if such disclosure is necessary for the Company’s financial statements not to be misleading. The Company does not accrue liabilities when the likelihood that the liability has been incurred is probable but the amount cannot be reasonably estimated, or when the liability is believed to be only reasonably possible or remote. Because litigation outcomes are inherently unpredictable, the Company’s evaluation of legal proceedings often involves a series of complex assessments by management about future events and can rely heavily on estimates and assumptions. If the assessments indicate that loss contingencies that could be material to any one of the Company’s financial statements are not probable, but are reasonably possible, or are probable, but cannot be estimated, then the Company will disclose the nature of the loss contingencies, together with an estimate of the possible loss or a statement that such loss is not reasonably estimable. While the consequences of certain unresolved proceedings are not presently determinable, and a reasonable estimate of the probable and reasonably possible loss or range of loss in excess of amounts accrued for such proceedings cannot be made, an adverse outcome from such proceedings could have a material adverse effect on the Company’s earnings in any given reporting period. However, in the opinion of the Company’s management, after consulting with legal counsel, and taking into account insurance coverage, the ultimate liability related to current outstanding claims and lawsuits is not expected to have a material adverse effect on the Company’s financial statements. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 29, 2024 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | 13. SUBSEQUENT EVENTS In accordance with ASC Topic 855, Subsequent Events, the Company evaluates subsequent events up until the date the Condensed Consolidated Financial Statements are issued. As of May 2, 2024, there were no subsequent events required to be reported. |
ORGANIZATION AND OPERATIONS O_2
ORGANIZATION AND OPERATIONS OF THE COMPANY (Policies) | 3 Months Ended |
Mar. 29, 2024 | |
ORGANIZATION AND OPERATIONS OF THE COMPANY | |
Basis of Presentation | The accounting policies followed by the Company are set forth in Part II, Item 8, Note 1, Organization and Operations of the Company |
Fiscal Years | Fiscal Years The Company operates and reports its annual financial results based on 52 or 53-week periods ending on the Friday closest to December 31. The Company operates and reports its quarterly financial results based on the 13-week period ending on the Friday closest to June 30, September 30, and December 31 and the 13 or 14-week period ending on the Friday closest to March 31, as applicable. Fiscal year 2024, which ends on December 27, 2024, will be comprised of 52 weeks, with all quarters consisting of 13 weeks each. Fiscal year 2023, which ended on December 29, 2023, was comprised of 52 weeks, with all quarters consisting of 13 weeks each. All references to years in the notes to consolidated financial statements represent fiscal years. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements. Estimates also affect the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. |
Accounting Pronouncements Recently Issued | Accounting Pronouncements Recently Issued In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU’) No. 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” (“ASU 2023-09”). ASU 2023-09 amends the rules on income tax disclosures to require entities to disclose specific categories in the rate reconciliation, the income or loss from continuing operations before income tax expense or benefit (separated between domestic and foreign) and income tax expense or benefit from continuing operations (separated by federal, state, and foreign). In addition, ASU 2023-09 requires entities to disclose their income tax payments to international, federal, state, and local jurisdictions, among other changes. The amendments can be applied on a prospective basis although retrospective application is permitted. The amendments are effective for the fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the impact this update will have on its Consolidated Financial Statements. In November 2023, the FASB issued ASU No. 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures” (“ASU 2023-07”). ASU 2023-07 expands segment disclosure requirements through enhanced disclosures related to significant segment expenses that are regularly provided to the chief operating decision maker (“CODM”), a description of other segment items by reportable segment, and any additional measures of a segment's profit or loss used by the CODM when deciding how to allocate resources. All disclosure requirements under ASU 2023-07 are also required for public entities with a single reportable segment. The amendments are effective for the fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The Company is currently evaluating the impact this update will have on its Consolidated Financial Statements. In October 2023, the FASB issued ASU No. 2023-06, “Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative” (“ASU 2023-06”). ASU 2023-06 amends U.S. GAAP to reflect updates and simplifications to certain disclosure and presentation requirements referred to FASB by the Securities and Exchange Commission (“SEC”). The targeted amendments incorporate 14 of the 27 disclosures referred by the SEC into codification. Each amendment in ASU 2023-06 is effective on either the date on which the SEC’s removal of the related disclosure requirement from Regulation S-X or Regulation S-K becomes effective, or on June 30, 2027, if the SEC has not removed the requirements by that date. The Company is currently evaluating the impact this update will have on its Consolidated Financial Statements. |
REVENUES (Tables)
REVENUES (Tables) | 3 Months Ended |
Mar. 29, 2024 | |
REVENUES | |
Schedule of Contracts by Reportable Segments and Type of Contracts | Segment Contract Type Revenue Recognition Method Time-and-materials Time-and-materials Energy Unit-based Unit-based Software license Unit-based Fixed price Percentage-of-completion Time-and-materials Time-and-materials Engineering and Consulting Unit-based Unit-based Fixed price Percentage-of-completion |
SUPPLEMENTAL FINANCIAL STATEM_2
SUPPLEMENTAL FINANCIAL STATEMENT DATA (Tables) | 3 Months Ended |
Mar. 29, 2024 | |
SUPPLEMENTAL FINANCIAL STATEMENT DATA | |
Schedule of reconciliation of cash and cash equivalents, and restricted cash | March 29, December 29, 2024 2023 (in thousands) Cash and cash equivalents $ 46,925 $ 23,397 Restricted cash — — Total cash, cash equivalents, and restricted cash shown in the consolidated statement of cash flows $ 46,925 $ 23,397 |
Schedule of equipment and leasehold improvements | March 29, December 29, 2024 2023 (in thousands) Furniture and fixtures $ 4,403 $ 4,379 Computer hardware and software 46,384 44,594 Leasehold improvements 3,466 3,382 Equipment under finance leases 6,245 6,139 Automobiles, trucks, and field equipment 3,388 3,373 Subtotal 63,886 61,867 Accumulated depreciation and amortization (36,347) (34,770) Equipment and leasehold improvements, net $ 27,539 $ 27,097 |
Schedule of accrued liabilities | March 29, December 29, 2024 2023 (in thousands) Accrued subcontractor costs $ 22,896 $ 30,196 Accrued bonuses 4,542 14,423 Employee withholdings 4,779 3,123 Compensation and payroll taxes 4,163 3,125 Rebate and other — 139 Accrued accounting costs and taxes 2,031 3,123 Total accrued liabilities $ 38,411 $ 54,129 |
Schedule of changes in the carrying value of goodwill by reporting unit | December 29, Additional Additions / March 29, 2023 Purchase Cost Adjustments 2024 (in thousands) Reporting Unit: Energy $ 129,375 $ — $ — $ 129,375 Engineering and Consulting 1,769 — — 1,769 $ 131,144 $ — $ — $ 131,144 |
Schedule of gross amounts and accumulated amortization of acquired identifiable intangible assets with finite useful lives | March 29, 2024 December 29, 2023 Gross Accumulated Gross Accumulated Amortization Amount Amortization Amount Amortization Period (in thousands) (in years) Finite: Backlog $ 8,306 $ 8,148 $ 8,306 $ 8,095 1.0 Tradename 15,936 12,835 15,936 12,695 2.5 - 6.0 Non-compete agreements 1,613 1,452 1,613 1,440 4.0 - 5.0 Developed technology 15,810 14,791 15,810 14,521 8.0 Customer relationships 58,149 32,503 58,149 31,107 5.0 - 8.0 Total intangible assets $ 99,814 $ 69,729 $ 99,814 $ 67,858 |
DERIVATIVE FINANCIAL INSTRUME_2
DERIVATIVE FINANCIAL INSTRUMENTS (Tables) | 3 Months Ended |
Mar. 29, 2024 | |
DERIVATIVE FINANCIAL INSTRUMENTS | |
Schedule of the fair values of outstanding derivatives designated as hedging instruments | Fair Value of Derivative Instruments as of Balance Sheet Location March 29, 2024 December 29, 2023 (in thousands) Interest rate swap agreement Current assets $ 140 $ 46 Interest rate swap agreement Other noncurrent liabilities (431) (887) |
Schedule of accumulated other comprehensive income (loss) | Gain (Loss) on Accumulated Other Derivative Instruments Comprehensive Income (Loss) (in thousands) Balances at December 29, 2023 $ (664) $ (664) Other comprehensive income (loss) before reclassifications 549 549 Amounts reclassified from accumulated other comprehensive income (loss): — — Income tax benefit (expense) related to derivative instruments (115) (115) Net current-period other comprehensive income (loss) 434 434 Balances at March 29, 2024 $ (230) $ (230) |
DEBT OBLIGATIONS (Tables)
DEBT OBLIGATIONS (Tables) | 3 Months Ended |
Mar. 29, 2024 | |
DEBT OBLIGATIONS | |
Schedule of debt obligations, excluding obligations under capital leases | March 29, December 29, 2024 2023 (in thousands) Outstanding borrowings on Term Loan $ 96,250 $ 98,125 Outstanding borrowings on Revolving Credit Facility — — Other debt agreements 174 327 Total debt 96,424 98,452 Issuance costs and debt discounts (929) (1,021) Subtotal 95,495 97,431 Less current portion of long-term debt 8,924 8,452 Long-term debt portion $ 86,571 $ 88,979 |
LEASES (Tables)
LEASES (Tables) | 3 Months Ended |
Mar. 29, 2024 | |
LEASES | |
Summary of the Lease Expense | Three Months Ended March 29, March 31, 2024 2023 (in thousands) Operating lease cost $ 1,527 $ 1,493 Sublease Income (14) — Finance lease cost: Amortization of assets 355 311 Interest on lease liabilities 31 22 Total net lease cost $ 1,899 $ 1,826 |
Summary of Lease Information Presented on the Condensed Consolidated Balance Sheet | March 29, December 29, 2024 2023 (in thousands) Operating leases: Right-of-use assets $ 12,803 $ 12,465 Lease liability $ 4,677 $ 4,537 Lease liability, less current portion 9,948 9,758 Total lease liabilities $ 14,625 $ 14,295 Finance leases (included in equipment and leasehold improvements, net): Equipment and leasehold improvements, net $ 6,245 $ 6,139 Accumulated depreciation (4,099) (3,837) Total equipment and leasehold improvements, net $ 2,146 $ 2,302 Finance lease obligations $ 1,111 $ 1,186 Finance lease obligations, less current portion 1,112 1,184 Total finance lease obligations $ 2,223 $ 2,370 Weighted average remaining lease term (in years): Operating Leases 3.32 3.43 Finance Leases 2.25 2.31 Weighted average discount rate: Operating Leases 6.67 % 6.09 % Finance Leases 5.59 % 5.19 % |
Summary of Other Information and Supplemental Cash Flow Information Related to Finance and Operating Leases | Three Months Ended March 29, March 31, 2024 2023 (in thousands) Cash paid for amounts included in the measurement of lease liabilities: Operating cash flow from operating leases $ 1,569 $ 1,570 Operating cash flow from finance leases 31 22 Financing cash flow from finance leases 345 303 Right-of-use assets obtained in exchange for lease liabilities: Operating leases $ 1,627 $ 2,120 |
Summary of the Maturities of Operating Lease Liabilities | Operating Finance (in thousands) Fiscal year: Remainder of 2024 $ 4,254 $ 1,013 2025 5,069 782 2026 4,235 448 2027 1,935 112 2028 1,108 18 2029 and thereafter 94 — Total lease payments 16,695 2,373 Less: Imputed interest (2,070) (150) Total lease obligations 14,625 2,223 Less: Current obligations 4,677 1,111 Noncurrent lease obligations $ 9,948 $ 1,112 |
Summary of the Maturities of Finance Lease Liabilities | Operating Finance (in thousands) Fiscal year: Remainder of 2024 $ 4,254 $ 1,013 2025 5,069 782 2026 4,235 448 2027 1,935 112 2028 1,108 18 2029 and thereafter 94 — Total lease payments 16,695 2,373 Less: Imputed interest (2,070) (150) Total lease obligations 14,625 2,223 Less: Current obligations 4,677 1,111 Noncurrent lease obligations $ 9,948 $ 1,112 |
SEGMENT AND GEOGRAPHICAL INFO_2
SEGMENT AND GEOGRAPHICAL INFORMATION (Tables) | 3 Months Ended |
Mar. 29, 2024 | |
SEGMENT AND GEOGRAPHICAL INFORMATION | |
Schedule of financial information with respect to the reportable segments | Engineering Unallocated Consolidated Energy & Consulting Corporate Intersegment Total (in thousands) Fiscal Three Months Ended March 29, 2024 Contract revenue $ 100,746 $ 21,743 $ - $ - $ 122,489 Depreciation and amortization 3,236 356 - - 3,592 Interest expense, net 1 - 2,136 - 2,137 Segment profit (loss) before income tax expense 4,311 2,344 (2,727) - 3,928 Income tax expense (benefit) 1,083 588 (685) - 986 Net income (loss) 3,229 1,756 (2,043) - 2,942 Segment assets (1) 318,808 26,613 85,609 (23,130) 407,900 Fiscal Three Months Ended March 31, 2023 Contract revenue $ 83,285 $ 19,318 $ - $ - $ 102,603 Depreciation and amortization 3,924 276 - - 4,200 Interest expense, net 2 - 2,464 - 2,466 Segment profit (loss) before income tax expense 2,771 2,587 (3,670) - 1,688 Income tax expense (benefit) 1,241 1,158 (1,643) - 756 Net income (loss) 1,530 1,428 (2,026) - 932 Segment assets (1) 323,578 23,587 69,332 (23,130) 393,367 (1) Segment assets are presented net of intercompany receivables. |
Schedule of disaggregation of revenue | Three months ended March 29, 2024 Energy Engineering and Consulting Total (in thousands) Contract Type Time-and-materials $ 8,537 $ 16,399 $ 24,936 Unit-based 46,957 4,511 51,468 Fixed price 45,252 833 46,085 Total (1) $ 100,746 $ 21,743 $ 122,489 Client Type Commercial $ 7,203 $ 1,580 $ 8,783 Government 35,820 20,098 55,918 Utilities (2) 57,723 65 57,788 Total (1) $ 100,746 $ 21,743 $ 122,489 Geography (3) Domestic $ 100,746 $ 21,743 $ 122,489 Three months ended March 31, 2023 Energy Engineering and Consulting Total (in thousands) Contract Type Time-and-materials $ 7,709 $ 14,554 $ 22,263 Unit-based 44,927 3,616 48,543 Fixed price 30,649 1,148 31,797 Total (1) $ 83,285 $ 19,318 $ 102,603 Client Type Commercial $ 6,719 $ 1,164 $ 7,883 Government 26,075 18,095 44,170 Utilities (2) 50,491 59 50,550 Total (1) $ 83,285 $ 19,318 $ 102,603 Geography (3) Domestic $ 83,285 $ 19,318 $ 102,603 (1) Amounts may not add to the totals due to rounding. (2) Includes the portion of revenue related to small business programs paid by the end user/customer. (3) Revenue from the Company’s foreign operations were not material for the three months ended March 29, 2024 and March 31, 2023. |
EARNINGS PER SHARE (EPS) (Table
EARNINGS PER SHARE (EPS) (Tables) | 3 Months Ended |
Mar. 29, 2024 | |
EARNINGS PER SHARE (EPS) | |
Schedule of number of weighted-average common shares outstanding used to compute basic and diluted EPS | Three months ended March 29, March 31, 2024 2023 (in thousands, except per share amounts) Net income (loss) $ 2,942 $ 932 Weighted-average common shares outstanding 13,605 13,266 Effect of dilutive stock options and restricted stock awards 305 204 Weighted-average common shares outstanding-diluted 13,910 13,470 Earnings (Loss) per share: Basic $ 0.22 $ 0.07 Diluted $ 0.21 $ 0.07 |
ORGANIZATION AND OPERATIONS O_3
ORGANIZATION AND OPERATIONS OF THE COMPANY - Segment Information (Details) - segment | 3 Months Ended | |
Mar. 29, 2024 | Mar. 31, 2023 | |
Segment Information | ||
Number of reporting segments | 2 | 2 |
ORGANIZATION AND OPERATIONS O_4
ORGANIZATION AND OPERATIONS OF THE COMPANY - Fiscal Years (Details) | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 27, 2024 | Sep. 27, 2024 | Jun. 28, 2024 | Mar. 29, 2024 | Dec. 29, 2023 | Sep. 29, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Dec. 27, 2024 | Dec. 29, 2023 | |
Entity Information | ||||||||||
Length of fiscal period | 91 days | 91 days | 91 days | 91 days | 91 days | 91 days | 91 days | 91 days | 364 days | 364 days |
Minimum | ||||||||||
Entity Information | ||||||||||
Length of fiscal period | 91 days | 91 days | 364 days | 364 days | ||||||
Maximum | ||||||||||
Entity Information | ||||||||||
Length of fiscal period | 98 days | 98 days | 371 days | 371 days |
REVENUES - Segment Information
REVENUES - Segment Information (Details) - segment | 3 Months Ended | |
Mar. 29, 2024 | Mar. 31, 2023 | |
Segment Information | ||
Number of reporting segments | 2 | 2 |
REVENUES - General Information
REVENUES - General Information (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 29, 2024 | Mar. 31, 2023 | Dec. 29, 2023 | |
Revenue | |||
Payroll taxes, bonuses and employee benefit costs for all Company personnel | $ 26,509 | $ 22,385 | |
Revenue of the entity recorded in which it acts solely in the capacity of an agent | 0 | ||
Retained accounts receivable | $ 16,100 | $ 14,300 | |
Maximum | |||
Revenue | |||
Percent of revenue (as a percent) | 3% | ||
Minimum | |||
Revenue | |||
Percent of revenue (as a percent) | 2% | ||
Cost of Sales | |||
Revenue | |||
Payroll taxes, bonuses and employee benefit costs for all Company personnel | $ 0 | ||
Allocation of facilities costs to contract revenue | $ 0 |
SUPPLEMENTAL FINANCIAL STATEM_3
SUPPLEMENTAL FINANCIAL STATEMENT DATA - Restricted Cash (Details) - USD ($) $ in Thousands | Mar. 29, 2024 | Dec. 29, 2023 | Mar. 31, 2023 | Dec. 30, 2022 |
Cash, Cash Equivalents, Restricted Cash, and Restricted Cash Equivalents | ||||
Cash and cash equivalents | $ 46,925 | $ 23,397 | ||
Restricted cash | 0 | 0 | ||
Total cash, cash equivalents, and restricted cash shown in the consolidated statement of cash flows | $ 46,925 | $ 23,397 | $ 17,853 | $ 19,485 |
Restricted Cash, Statement of Financial Position | Restricted cash | Restricted cash |
SUPPLEMENTAL FINANCIAL STATEM_4
SUPPLEMENTAL FINANCIAL STATEMENT DATA - Equipment and Leasehold Improvements, Net - Tabular Disclosure (Details) - USD ($) $ in Thousands | Mar. 29, 2024 | Dec. 29, 2023 |
Equipment and Leasehold Improvements | ||
Equipment under finance leases | $ 6,245 | $ 6,139 |
Equipment and leasehold improvements, gross | 63,886 | 61,867 |
Accumulated depreciation and amortization | (36,347) | (34,770) |
Total equipment and leasehold improvements, net | 27,539 | 27,097 |
Furniture and Fixtures | ||
Equipment and Leasehold Improvements | ||
Equipment and leasehold improvements | 4,403 | 4,379 |
Computer Hardware and Software | ||
Equipment and Leasehold Improvements | ||
Equipment and leasehold improvements | 46,384 | 44,594 |
Leasehold Improvements | ||
Equipment and Leasehold Improvements | ||
Equipment and leasehold improvements | 3,466 | 3,382 |
Automobiles Trucks and Field Equipment | ||
Equipment and Leasehold Improvements | ||
Equipment and leasehold improvements | $ 3,388 | $ 3,373 |
SUPPLEMENTAL FINANCIAL STATEM_5
SUPPLEMENTAL FINANCIAL STATEMENT DATA - Equipment and Leasehold Improvements, Net - Depreciation and Amortization Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 29, 2024 | Mar. 31, 2023 | Dec. 29, 2023 | |
Amortization Expense | |||
Amortization expense | $ 355 | $ 311 | $ 1,300 |
SUPPLEMENTAL FINANCIAL STATEM_6
SUPPLEMENTAL FINANCIAL STATEMENT DATA - Accrued Liabilities (Details) - USD ($) $ in Thousands | Mar. 29, 2024 | Dec. 29, 2023 |
Accrued Liabilities | ||
Accrued subcontractor costs | $ 22,896 | $ 30,196 |
Accrued bonuses | 4,542 | 14,423 |
Employee withholdings | 4,779 | 3,123 |
Compensation and payroll taxes | 4,163 | 3,125 |
Rebate and other | 139 | |
Accrued accounting costs and taxes | 2,031 | 3,123 |
Total accrued liabilities | $ 38,411 | $ 54,129 |
SUPPLEMENTAL FINANCIAL STATEM_7
SUPPLEMENTAL FINANCIAL STATEMENT DATA - Goodwill (Details) $ in Thousands | Mar. 29, 2024 USD ($) |
Changes in carrying value of goodwill | |
Goodwill at beginning of period | $ 131,144 |
Goodwill at end of period | 131,144 |
Energy | |
Changes in carrying value of goodwill | |
Goodwill at beginning of period | 129,375 |
Goodwill at end of period | 129,375 |
Engineering and Consulting | |
Changes in carrying value of goodwill | |
Goodwill at beginning of period | 1,769 |
Goodwill at end of period | $ 1,769 |
SUPPLEMENTAL FINANCIAL STATEM_8
SUPPLEMENTAL FINANCIAL STATEMENT DATA - Finite-lived Intangible Assets - Gross Amounts and Accumulated Amortization (Details) - USD ($) $ in Thousands | Mar. 29, 2024 | Dec. 29, 2023 |
Finite-Lived Intangible Assets | ||
Total finite intangible assets | $ 99,814 | $ 99,814 |
Accumulated Amortization | 69,729 | 67,858 |
Order or Production Backlog | ||
Finite-Lived Intangible Assets | ||
Total finite intangible assets | 8,306 | 8,306 |
Accumulated Amortization | 8,148 | 8,095 |
Trade Names | ||
Finite-Lived Intangible Assets | ||
Total finite intangible assets | 15,936 | 15,936 |
Accumulated Amortization | 12,835 | 12,695 |
Noncompete Agreements | ||
Finite-Lived Intangible Assets | ||
Total finite intangible assets | 1,613 | 1,613 |
Accumulated Amortization | 1,452 | 1,440 |
Developed Technology Rights | ||
Finite-Lived Intangible Assets | ||
Total finite intangible assets | 15,810 | 15,810 |
Accumulated Amortization | 14,791 | 14,521 |
Customer Relationships | ||
Finite-Lived Intangible Assets | ||
Total finite intangible assets | 58,149 | 58,149 |
Accumulated Amortization | $ 32,503 | $ 31,107 |
SUPPLEMENTAL FINANCIAL STATEM_9
SUPPLEMENTAL FINANCIAL STATEMENT DATA - Finite-lived Intangible Assets - Amortization Period (Details) | Mar. 29, 2024 |
Order or Production Backlog | |
Finite-Lived Intangible Assets | |
Amortization Period | 1 year |
Trade Names | Minimum | |
Finite-Lived Intangible Assets | |
Amortization Period | 2 years 6 months |
Trade Names | Maximum | |
Finite-Lived Intangible Assets | |
Amortization Period | 6 years |
Noncompete Agreements | Minimum | |
Finite-Lived Intangible Assets | |
Amortization Period | 4 years |
Noncompete Agreements | Maximum | |
Finite-Lived Intangible Assets | |
Amortization Period | 5 years |
Developed Technology Rights | |
Finite-Lived Intangible Assets | |
Amortization Period | 8 years |
Customer Relationships | Minimum | |
Finite-Lived Intangible Assets | |
Amortization Period | 5 years |
Customer Relationships | Maximum | |
Finite-Lived Intangible Assets | |
Amortization Period | 8 years |
DERIVATIVE FINANCIAL INSTRUME_3
DERIVATIVE FINANCIAL INSTRUMENTS - General Information (Details) - Interest Rate Swap - Cash Flow Hedging $ in Millions | Nov. 30, 2023 USD ($) |
Derivative Financial Instruments | |
Derivative, inception date | Nov. 30, 2023 |
Notional amount | $ 50 |
Fixed rate (as a percent) | 4.77% |
Derivative, contract end date | Sep. 29, 2026 |
DERIVATIVE FINANCIAL INSTRUME_4
DERIVATIVE FINANCIAL INSTRUMENTS - Cash Flow Hedge Effectiveness (Details) $ in Thousands | 3 Months Ended |
Mar. 29, 2024 USD ($) | |
Derivative Financial Instruments | |
Other comprehensive income (loss), cash flow hedge, gain (loss), before reclassification and tax | $ 500 |
Other comprehensive income (loss), cash flow hedge, gain (loss), reclassification, before tax | 0 |
Other comprehensive income (loss), cash flow hedge, gain (loss), after reclassification, before tax, total | 400 |
Derivative instruments, gain (loss) reclassification from accumulated OCI to income, estimated net amount to be transferred | $ 100 |
Derivative instruments, gain (loss) reclassification from accumulated OCI to income, estimate of time to transfer | 12 months |
DERIVATIVE FINANCIAL INSTRUME_5
DERIVATIVE FINANCIAL INSTRUMENTS - Fair Value (Details) - USD ($) $ in Thousands | Mar. 29, 2024 | Dec. 29, 2023 |
Derivative Assets | ||
Derivative asset, current | $ 140 | $ 46 |
Derivative Asset, Current, Statement of Financial Position | Prepaid expenses and other current assets | Prepaid expenses and other current assets |
Derivative Liabilities | ||
Derivative liability, noncurrent | $ (431) | $ (887) |
Derivative Liability, Noncurrent, Statement of Financial Position | Other noncurrent liabilities | Other noncurrent liabilities |
DERIVATIVE FINANCIAL INSTRUME_6
DERIVATIVE FINANCIAL INSTRUMENTS - Accumulated Other Comprehensive Income (Loss) (Details) $ in Thousands | 3 Months Ended |
Mar. 29, 2024 USD ($) | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |
Balance | $ 199,845 |
Other comprehensive income (loss) | 434 |
Balance | 205,515 |
Accumulated Other Comprehensive Loss | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |
Balance | (664) |
Other comprehensive income (loss) before reclassifications | 549 |
Amounts reclassified from accumulated other comprehensive income: income tax benefit (expense) related to derivative instruments | (115) |
Other comprehensive income (loss) | 434 |
Balance | (230) |
Gain (Loss) on Derivative Instruments | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |
Balance | (664) |
Other comprehensive income (loss) before reclassifications | 549 |
Amounts reclassified from accumulated other comprehensive income: income tax benefit (expense) related to derivative instruments | (115) |
Other comprehensive income (loss) | 434 |
Balance | $ (230) |
DEBT OBLIGATIONS - Composition
DEBT OBLIGATIONS - Composition (Details) - USD ($) $ in Thousands | Mar. 29, 2024 | Dec. 29, 2023 |
Debt Obligations | ||
Total debt | $ 96,424 | $ 98,452 |
Issuance costs and debt discounts | (929) | (1,021) |
Subtotal - long term debt | 95,495 | 97,431 |
Notes Payable to Banks | Term Loan | ||
Debt Obligations | ||
Total debt | 96,250 | 98,125 |
Notes Payable, Other Payables | Other Debt | ||
Debt Obligations | ||
Total debt | $ 174 | $ 327 |
DEBT OBLIGATIONS - Classificati
DEBT OBLIGATIONS - Classification (Details) - USD ($) $ in Thousands | Mar. 29, 2024 | Dec. 29, 2023 |
Debt Obligations | ||
Subtotal | $ 95,495 | $ 97,431 |
Less current portion of long-term debt | 8,924 | 8,452 |
Long-term debt portion | $ 86,571 | $ 88,979 |
DEBT OBLIGATIONS - New Credit F
DEBT OBLIGATIONS - New Credit Facilities (Details) | Mar. 29, 2024 |
Notes Payable to Banks | New Credit Facilities | |
Debt Obligations | |
Composite interest rate (as a percent) | 7.70% |
LEASES - General Information (D
LEASES - General Information (Details) $ in Thousands | 3 Months Ended |
Mar. 29, 2024 USD ($) | |
Leases | |
Operating lease, option to extend | true |
Operating lease, option to terminate | true |
Residual value guarantee | $ 0 |
Minimum | |
Leases | |
Operating lease, remaining lease term | 1 year |
Maximum | |
Leases | |
Operating lease, remaining lease term | 8 years |
Operating lease, extension term | 5 years |
Operating lease, terminate term | 1 year |
LEASES - Lease Expense (Details
LEASES - Lease Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 29, 2024 | Mar. 31, 2023 | Dec. 29, 2023 | |
Lease cost | |||
Operating lease cost | $ 1,527 | $ 1,493 | |
Sublease Income | (14) | ||
Amortization of assets | 355 | 311 | $ 1,300 |
Interest on lease liabilities | 31 | 22 | |
Total net lease cost | $ 1,899 | $ 1,826 |
LEASES - Consolidated Balance S
LEASES - Consolidated Balance Sheet (Details) - USD ($) $ in Thousands | Mar. 29, 2024 | Dec. 29, 2023 |
Leases | ||
Right-of-use assets | $ 12,803 | $ 12,465 |
Operating leases, lease liabilities | ||
Lease liability | 4,677 | 4,537 |
Lease liability, less current portion | 9,948 | 9,758 |
Total lease liabilities | 14,625 | 14,295 |
Finance leases (included in equipment and leasehold improvements, net): | ||
Equipment and leasehold improvements, net | 6,245 | 6,139 |
Accumulated depreciation | (4,099) | (3,837) |
Total equipment and leasehold improvements, net | $ 2,146 | $ 2,302 |
Finance Lease, Right-of-Use Asset, Statement of Financial Position | Equipment and leasehold improvements, net | Equipment and leasehold improvements, net |
Finance lease obligations | ||
Finance lease obligations | $ 1,111 | $ 1,186 |
Finance lease obligations, less current portion | 1,112 | 1,184 |
Total finance lease obligations | $ 2,223 | $ 2,370 |
LEASES - Additional Information
LEASES - Additional Information (Details) | Mar. 29, 2024 | Dec. 29, 2023 |
Leases | ||
Operating leases, weighted average remaining lease term | 3 years 3 months 25 days | 3 years 5 months 4 days |
Finance leases, weighted average remaining lease term | 2 years 3 months | 2 years 3 months 21 days |
Operating leases, weighted average discount rate | 6.67% | 6.09% |
Finance leases, weighted average discount rate | 5.59% | 5.19% |
LEASES - Rent Expense (Details)
LEASES - Rent Expense (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 29, 2024 | Mar. 31, 2023 | |
LEASES | ||
Rent expenses | $ 1.7 | $ 1.6 |
LEASES - Supplemental Cash Flow
LEASES - Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 29, 2024 | Mar. 31, 2023 | |
Cash paid for amounts included in the measurement of lease liabilities: | ||
Operating cash flow from operating leases | $ 1,569 | $ 1,570 |
Operating cash flow from finance leases | 31 | 22 |
Financing cash flow from finance leases | 345 | 303 |
Right-of-use assets obtained in exchange for lease liabilities for operating leases | $ 1,627 | $ 2,120 |
LEASES - Operating Leases - Mat
LEASES - Operating Leases - Maturities of Lease Liabilities (Details) $ in Thousands | Mar. 29, 2024 USD ($) |
Operating | |
Remainder of 2024 | $ 4,254 |
2025 | 5,069 |
2026 | 4,235 |
2027 | 1,935 |
2028 | 1,108 |
2029 and thereafter | 94 |
Total lease payments | $ 16,695 |
LEASES - Operating Leases - Gro
LEASES - Operating Leases - Gross Difference (Details) - USD ($) $ in Thousands | Mar. 29, 2024 | Dec. 29, 2023 |
Operating | ||
Total lease payments | $ 16,695 | |
Less: Imputed interest | (2,070) | |
Total lease liabilities | 14,625 | $ 14,295 |
Less: Current obligations | 4,677 | 4,537 |
Noncurrent lease obligations | $ 9,948 | $ 9,758 |
LEASES - Finance Leases - Matur
LEASES - Finance Leases - Maturities of Lease Liabilities (Details) $ in Thousands | Mar. 29, 2024 USD ($) |
Finance | |
Remainder of 2024 | $ 1,013 |
2025 | 782 |
2026 | 448 |
2027 | 112 |
2028 | 18 |
Total lease payments | $ 2,373 |
LEASES - Finance Leases - Gross
LEASES - Finance Leases - Gross Difference (Details) - USD ($) $ in Thousands | Mar. 29, 2024 | Dec. 29, 2023 |
Finance | ||
Total lease payments | $ 2,373 | |
Less: Imputed interest | (150) | |
Total finance lease obligations | 2,223 | $ 2,370 |
Less: Current obligations | 1,111 | 1,186 |
Noncurrent lease obligations | $ 1,112 | $ 1,184 |
COMMITMENTS AND VARIABLE INTE_2
COMMITMENTS AND VARIABLE INTEREST ENTITIES - Employee Benefit Plans (Details) | 3 Months Ended | |
Mar. 29, 2024 USD ($) Y | Mar. 31, 2023 USD ($) | |
Qualified Cash or Deferred Arrangement | ||
Employee Benefit Plans | ||
Defined Contribution Plan, Tax Status | us-gaap:QualifiedPlanMember | |
Maximum employee contribution as a percentage of compensation under 401(k) Plan (as a percent) | 50% | |
Defined Contribution Plan | ||
Employee Benefit Plans | ||
Service period | 3 months | |
Attained age | Y | 21 | |
Defined contribution plan, employer matching contribution, percent of match (as a percent) | 50% | |
Defined contribution plan, employer matching contribution, percent of employees' gross pay (as a percent) | 6% | |
Maximum employer contribution per employee | $ 3,000 | |
Employer matching contributions | $ 1,100,000 | $ 1,000,000 |
COMMITMENTS AND VARIABLE INTE_3
COMMITMENTS AND VARIABLE INTEREST ENTITIES - Variable Interest Entities (Details) | 3 Months Ended |
Mar. 29, 2024 entity | |
COMMITMENTS AND VARIABLE INTEREST ENTITIES | |
Percentage of costs reimbursed to WES by Genesys | 10% |
Number of VIEs | 1 |
SEGMENT AND GEOGRAPHICAL INFO_3
SEGMENT AND GEOGRAPHICAL INFORMATION - Segment Information (Details) - segment | 3 Months Ended | |
Mar. 29, 2024 | Mar. 31, 2023 | |
Segment Information | ||
Number of reporting segments | 2 | 2 |
SEGMENT AND GEOGRAPHICAL INFO_4
SEGMENT AND GEOGRAPHICAL INFORMATION - Statement of Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 29, 2024 | Mar. 31, 2023 | |
Segment reconciliation | ||
Contract revenue | $ 122,489 | $ 102,603 |
Depreciation and amortization | 3,592 | 4,200 |
Interest expense, net | 2,137 | 2,466 |
Segment profit (loss) before income tax expense | 3,928 | 1,688 |
Income tax (benefit) expense | 986 | 756 |
Net Income (Loss) | 2,942 | 932 |
Energy | ||
Segment reconciliation | ||
Contract revenue | 100,746 | 83,285 |
Engineering and Consulting | ||
Segment reconciliation | ||
Contract revenue | 21,743 | 19,318 |
Operating Segments | Energy | ||
Segment reconciliation | ||
Contract revenue | 100,746 | 83,285 |
Depreciation and amortization | 3,236 | 3,924 |
Interest expense, net | 1 | 2 |
Segment profit (loss) before income tax expense | 4,311 | 2,771 |
Income tax (benefit) expense | 1,083 | 1,241 |
Net Income (Loss) | 3,229 | 1,530 |
Operating Segments | Engineering and Consulting | ||
Segment reconciliation | ||
Contract revenue | 21,743 | 19,318 |
Depreciation and amortization | 356 | 276 |
Segment profit (loss) before income tax expense | 2,344 | 2,587 |
Income tax (benefit) expense | 588 | 1,158 |
Net Income (Loss) | 1,756 | 1,428 |
Corporate, Non-Segment | ||
Segment reconciliation | ||
Interest expense, net | 2,136 | 2,464 |
Segment profit (loss) before income tax expense | (2,727) | (3,670) |
Income tax (benefit) expense | (685) | (1,643) |
Net Income (Loss) | $ (2,043) | $ (2,026) |
SEGMENT AND GEOGRAPHICAL INFO_5
SEGMENT AND GEOGRAPHICAL INFORMATION - Segment Assets (Details) - USD ($) $ in Thousands | Mar. 29, 2024 | Dec. 29, 2023 | Mar. 31, 2023 |
Segment Reporting | |||
Segment assets | $ 407,900 | $ 415,588 | $ 393,367 |
Operating Segments | Energy | |||
Segment Reporting | |||
Segment assets | 318,808 | 323,578 | |
Operating Segments | Engineering and Consulting | |||
Segment Reporting | |||
Segment assets | 26,613 | 23,587 | |
Corporate, Non-Segment | |||
Segment Reporting | |||
Segment assets | 85,609 | 69,332 | |
Intersegment Eliminations | |||
Segment Reporting | |||
Segment assets | $ (23,130) | $ (23,130) |
SEGMENT AND GEOGRAPHICAL INFO_6
SEGMENT AND GEOGRAPHICAL INFORMATION - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 29, 2024 | Mar. 31, 2023 | |
Revenue | ||
Revenue | $ 122,489 | $ 102,603 |
Domestic | ||
Revenue | ||
Revenue | 122,489 | 102,603 |
Energy | ||
Revenue | ||
Revenue | 100,746 | 83,285 |
Energy | Domestic | ||
Revenue | ||
Revenue | 100,746 | 83,285 |
Engineering and Consulting | ||
Revenue | ||
Revenue | 21,743 | 19,318 |
Engineering and Consulting | Domestic | ||
Revenue | ||
Revenue | 21,743 | 19,318 |
Commercial | ||
Revenue | ||
Revenue | 8,783 | 7,883 |
Commercial | Energy | ||
Revenue | ||
Revenue | 7,203 | 6,719 |
Commercial | Engineering and Consulting | ||
Revenue | ||
Revenue | 1,580 | 1,164 |
Government | ||
Revenue | ||
Revenue | 55,918 | 44,170 |
Government | Energy | ||
Revenue | ||
Revenue | 35,820 | 26,075 |
Government | Engineering and Consulting | ||
Revenue | ||
Revenue | 20,098 | 18,095 |
Utilities | ||
Revenue | ||
Revenue | 57,788 | 50,550 |
Utilities | Energy | ||
Revenue | ||
Revenue | 57,723 | 50,491 |
Utilities | Engineering and Consulting | ||
Revenue | ||
Revenue | 65 | 59 |
Time-and-Materials Contract | ||
Revenue | ||
Revenue | 24,936 | 22,263 |
Time-and-Materials Contract | Energy | ||
Revenue | ||
Revenue | 8,537 | 7,709 |
Time-and-Materials Contract | Engineering and Consulting | ||
Revenue | ||
Revenue | 16,399 | 14,554 |
Unit-based Contract | ||
Revenue | ||
Revenue | 51,468 | 48,543 |
Unit-based Contract | Energy | ||
Revenue | ||
Revenue | 46,957 | 44,927 |
Unit-based Contract | Engineering and Consulting | ||
Revenue | ||
Revenue | 4,511 | 3,616 |
Fixed-Price Contract | ||
Revenue | ||
Revenue | 46,085 | 31,797 |
Fixed-Price Contract | Energy | ||
Revenue | ||
Revenue | 45,252 | 30,649 |
Fixed-Price Contract | Engineering and Consulting | ||
Revenue | ||
Revenue | $ 833 | $ 1,148 |
SEGMENT AND GEOGRAPHICAL INFO_7
SEGMENT AND GEOGRAPHICAL INFORMATION - Geographical Information (Details) | Mar. 29, 2024 state |
SEGMENT AND GEOGRAPHICAL INFORMATION | |
Number of states in which entity operates | 22 |
SEGMENT AND GEOGRAPHICAL INFO_8
SEGMENT AND GEOGRAPHICAL INFORMATION - Concentration Risk (Details) | 3 Months Ended | |
Mar. 29, 2024 | Mar. 31, 2023 | |
Revenue from Contract with Customer Benchmark | Customer Concentration Risk | Top Ten Customers | ||
Concentration Risk | ||
Concentration risk (as a percent) | 49.20% | 52.20% |
Revenue from Contract with Customer Benchmark | Customer Concentration Risk | Los Angeles Department of Water and Power | ||
Concentration Risk | ||
Concentration risk (as a percent) | 11.10% | |
Revenue from Contract with Customer Benchmark | Geographic Concentration Risk | California | ||
Concentration Risk | ||
Concentration risk (as a percent) | 43.50% | 42.40% |
Revenue from Contract with Customer Benchmark | Geographic Concentration Risk | New York | ||
Concentration Risk | ||
Concentration risk (as a percent) | 27.10% | 24.50% |
Revenue from Contract with Customer, Segment Benchmark | Customer Concentration Risk | Los Angeles Department of Water and Power | Energy | ||
Concentration Risk | ||
Concentration risk (as a percent) | 10.70% | 13.70% |
INCOME TAXES - Valuation Allowa
INCOME TAXES - Valuation Allowance (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 29, 2024 | Dec. 29, 2023 | |
INCOME TAXES | ||
Valuation allowance | $ 1,200 | |
Increase (decrease) in valuation allowance | $ 0 |
INCOME TAXES - Uncertain Tax Po
INCOME TAXES - Uncertain Tax Positions (Details) - USD ($) $ in Thousands | Mar. 29, 2024 | Mar. 31, 2023 |
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued | ||
Liability for uncertain tax positions | $ 0 | $ 0 |
INCOME TAXES - Income Tax Expen
INCOME TAXES - Income Tax Expense (Benefit) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 29, 2024 | Mar. 31, 2023 | |
INCOME TAXES | ||
Income tax expense (benefit) | $ 986 | $ 756 |
EARNINGS PER SHARE (EPS) - Comp
EARNINGS PER SHARE (EPS) - Computation (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 29, 2024 | Mar. 31, 2023 | |
Net income (loss) | ||
Net Income (Loss) | $ 2,942 | $ 932 |
Net income (loss) - basic | 2,942 | 932 |
Net income (loss) - diluted | $ 2,942 | $ 932 |
Weighted-average shares outstanding: | ||
Weighted-average common shares outstanding (in shares) | 13,605 | 13,266 |
Effect of dilutive stock options and restricted stock awards (in shares) | 305 | 204 |
Weighted-average common shares outstanding-diluted (in shares) | 13,910 | 13,470 |
Earnings (Loss) per share: | ||
Basic (in dollars per share) | $ 0.22 | $ 0.07 |
Diluted (in dollars per share) | $ 0.21 | $ 0.07 |
EARNINGS PER SHARE (EPS) - Anti
EARNINGS PER SHARE (EPS) - Antidilutive Securities (Details) - shares shares in Thousands | 3 Months Ended | |
Mar. 29, 2024 | Mar. 31, 2023 | |
Share-Based Payment Arrangement | ||
Antidilutive securities | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 335 | 397 |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 29, 2024 | Mar. 31, 2023 | |
Pay vs Performance Disclosure | ||
Net Income (Loss) | $ 2,942 | $ 932 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Mar. 29, 2024 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |