Willdan Reports Third Quarter 2013 Financial Results Business Wire ANAHEIM, Calif. -- November 7, 2013 Willdan Group, Inc. (“Willdan”) (NASDAQ:WLDN) today announced financial results for its third quarter ended September 27, 2013. For the third quarter of 2013, Willdan reported total contract revenue of $21.2 million and net income of $0.8 million, or $0.11 per share. Tom Brisbin, Willdan’s Chief Executive Officer, stated: “While third quarter revenue declined slightly from the year-ago period, we reported positive earnings and cash flow for the quarter. Our energy projects have continued to ramp up as planned and we continue to expect a profitable year.” Third Quarter 2013 Results For the third quarter of fiscal 2013, revenue was $21.2 million, down $0.4 million, or 1.8%, from the comparable period last year. On a sequential basis, revenue was up $0.7 million, or 3.3%, from the second quarter of 2013. Income from operations was $0.9 million for the third quarter of fiscal 2013, as compared to income from operations of $1.4 million for the comparable period last year and $0.7 million for the second quarter of 2013. Net income was $0.8 million for the third quarter of 2013, the same as for the comparable period last year. Net income was $0.7 million for the second quarter of 2013. Basic and diluted earnings per share for the third quarter of fiscal 2013 and the comparable period last year were $0.11. Willdan generated $1.8 million in cash flow from operations in the third quarter of fiscal 2013. Nine Months 2013 Results For the nine months ended September 27, 2013, revenue was $63.0 million, as compared to $70.5 million for the comparable period last year. Income from operations was $2.1 million for the nine months ended September 27, 2013 as compared to a loss from operations of $20.5 million for the comparable period last year. Net income was $1.9 million for the nine months ended September 27, 2013 as compared to a net loss of $17.6 million for the comparable period last year. Basic and diluted earnings per share for the nine months ended September 27, 2013 were $0.26, as compared to a basic and diluted loss per share of $2.41 for the comparable period last year. Willdan generated $4.2 million in cash flow from operations in the nine months ended September 27, 2013. Three Months Ended Nine Months Ended September September September September 27, 28, 27, 28, In thousands (except per 2013 2012 2013 2012 share data) Revenue $ 21,167 $ 21,547 $ 63,048 $ 70,496 Income (loss) from 882 1,420 2,057 (20,480 ) operations Interest 3 2 8 4 income Interest (9 ) (28 ) (86 ) (80 ) expense Other, net 10 (14 ) 35 (35 ) Income tax expense 44 593 85 (2,991 ) (benefit) Net income $ 842 $ 787 $ 1,929 $ (17,600 ) (loss) Earnings (loss) per share Basic $ 0.11 $ 0.11 $ 0.26 $ (2.41 ) Diluted $ 0.11 $ 0.11 $ 0.26 $ (2.41 ) Weighted average shares outstanding: Basic 7,359 7,315 7,349 7,303 Diluted 7,526 7,315 7,443 7,303 Use of Non-GAAP Financial Measures Adjusted EBITDA is a supplemental measure used by Willdan's management to measure its operating performance. Willdan defines Adjusted EBITDA as net income (loss) plus net interest expense, income tax expense (benefit), depreciation and amortization, goodwill impairment, lease abandonment expense, net and other non-recurring income and expense items occurring in such period. Willdan's definition of Adjusted EBITDA may differ from those of many companies reporting similarly named measures. This measure should be considered in addition to, and not as a substitute for or superior to, other measures of financial performance prepared in accordance with U.S. generally accepted accounting principles, or GAAP, such as net income. Willdan believes Adjusted EBITDA enables management to separate non-recurring income and expense items from its results of operations to provide a more normalized and consistent view of operating performance on a period-to-period basis. Willdan uses Adjusted EBITDA to evaluate its performance for, among other things, budgeting, forecasting and incentive compensation purposes. Willdan also believes Adjusted EBITDA is useful to investors, research analysts, investment bankers and lenders because it removes the impact of certain non-recurring income and expense items from its operational results, which may facilitate comparison of its results from period to period. Adjusted EBITDA is not a recognized term under GAAP and does not purport to be an alternative to income from operations or net income as an indicator of operating performance or any other GAAP measure. Adjusted EBITDA increased $7.3 million to $2.6 million for the nine months ended September 27, 2013 from $(4.7) million for the comparable period last year. The following is a reconciliation of net income (loss) to Adjusted EBITDA: Nine Months Ended September 27, September 28, In thousands 2013 2012 Net income (loss) $ 1,929 $ (17,600 ) Interest income (8 ) (4 ) Interest expense 86 80 Income tax expense (benefit) 85 (2,991 ) (Gain) loss on sale of assets (3 ) 17 Depreciation and amortization 452 569 Impairment of goodwill — 15,208 Lease abandonment expense, net 13 27 Adjusted EBITDA $ 2,554 $ (4,694 ) Liquidity and Capital Resources Willdan had $10.4 million in cash and cash equivalents, including restricted cash, at September 27, 2013. Willdanhas available a $5.0 millionrevolving line of credit withWells Fargo Bank, National Association, withno outstanding borrowings at September 27, 2013. Conference Call and Webcast Chief Executive Officer Thomas Brisbin and Chief Financial Officer Kimberly Gant plan to host a conference call on November 7, 2013 at 5:00 p.m. Eastern/2:00 p.m. Pacific, to discuss Willdan's financial results. Interested parties may participate in the conference call by dialing 877-941-6010 (480-629-9772 for international callers). When prompted, ask for the “Willdan Group, Inc., Third Quarter 2013 Conference Call.” The conference call will be webcast simultaneously on Willdan’s website at www.willdan.com under Investors: Events. The telephonic replay of the conference call may be accessed approximately two hours after the call through November 22, 2013, by dialing 800-406-7325 (303-590-3030 for international callers). The replay access code is 4645884. The webcast replay will be archived for 12 months. About Willdan Group, Inc. Founded in 1964,Willdanis a provider of professional technical and consulting services to public agencies at all levels of government, public and private utilities and commercial and industrial firms.Willdanprovides a broad range of services to clients throughout the United States, including engineering and planning, energy efficiency and sustainability, economic and financial consulting, and national preparedness and interoperability. For additional information, visitWilldan’swebsite at www.willdan.com. Forward-Looking Statements Safe Harbor Statement: Statements in this press release which are not purely historical, including statements regarding Willdan’s intentions, hopes, beliefs, expectations, representations, projections, estimates, plans or predictions of the future are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The forward-looking statements involve risks and uncertainties including, but not limited to, the risk that Willdan will not be able to expand its services or meet the needs of customers in markets in which it operates. It is important to note that Willdan’s actual results could differ materially from those in any such forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to, a slowdown in the local and regional economies of the states where Willdan conducts business and the loss of or inability to hire additional qualified professionals. Willdan’s business could be affected by a number of other factors, including the risk factors listed from time to time in Willdan’s SEC reports including, but not limited to, the Annual Report on Form 10-K for the year ended December 28, 2012 filed on March 26, 2013 and the Quarterly Report on Form 10-Q for the quarter ended March 29, 2013 filed on May 9, 2013. Willdan cautions investors not to place undue reliance on the forward-looking statements contained in this press release. Willdan disclaims any obligation to, and does not undertake to, update or revise any forward-looking statements in this press release. WILLDAN GROUP, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS September 27, December 28, 2013 2012 (unaudited) Assets Current assets: Cash and cash equivalents, including $ 10,354,000 $ 10,006,000 restricted cash Accounts receivable, net of allowance for doubtful accounts of $589,000 and 10,393,000 15,484,000 $303,000 at September 27, 2013 and December 28, 2012, respectively Costs and estimated earnings in excess 9,565,000 9,860,000 of billings on uncompleted contracts Other receivables 62,000 95,000 Prepaid expenses and other current 1,570,000 1,782,000 assets Total current assets 31,944,000 37,227,000 Equipment and leasehold improvements, 774,000 979,000 net Other intangible assets, net — 12,000 Other assets 314,000 307,000 Deferred income taxes, net of current 3,452,000 3,452,000 portion Total assets $ 36,484,000 $ 41,977,000 Liabilities and Stockholders’ Equity Current liabilities: Excess of outstanding checks over bank $ 1,169,000 $ 1,188,000 balance Borrowings under line of credit — 3,000,000 Accounts payable 3,432,000 6,983,000 Accrued liabilities 5,926,000 5,306,000 Billings in excess of costs and estimated earnings on uncompleted 2,614,000 3,419,000 contracts Current portion of notes payable 24,000 628,000 Current portion of capital lease 140,000 152,000 obligations Current portion of deferred income 3,452,000 3,452,000 taxes Total current liabilities 16,757,000 24,128,000 Capital lease obligations, less current 86,000 124,000 portion Deferred lease obligations 155,000 374,000 Total liabilities 16,998,000 24,626,000 Commitments and contingencies Stockholders’ equity: Preferred stock, $0.01 par value, 10,000,000 shares authorized, no shares issued and — — outstanding Common stock, $0.01 par value, 40,000,000 shares authorized: 7,375,000 and 7,335,000 74,000 73,000 shares issued and outstanding at September 27, 2013 and December 28, 2012, respectively Additional paid-in capital 34,628,000 34,423,000 Accumulated (deficit) earnings (15,216,000 ) (17,145,000 ) Total stockholders’ equity 19,486,000 17,351,000 Total liabilities and stockholders’ $ 36,484,000 $ 41,977,000 equity WILLDAN GROUP, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) Three Months Ended Nine Months Ended September September September September 28, 27, 28, 27, 2013 2012 2013 2012 Contract revenue $ 21,167,000 $ 21,547,000 $ 63,048,000 $ 70,496,000 Direct costs of contract revenue (exclusive of depreciation and amortization shown separately below): Salaries and 6,136,000 5,680,000 18,108,000 17,613,000 wages Subconsultant services and 5,836,000 5,610,000 17,336,000 27,987,000 other direct costs Total direct costs of 11,972,000 11,290,000 35,444,000 45,600,000 contract revenue General and administrative expenses: Salaries and wages, payroll taxes and 4,947,000 5,075,000 15,433,000 17,342,000 employee benefits Facilities and facilities 1,167,000 1,224,000 3,504,000 3,659,000 related Stock-based 36,000 50,000 124,000 181,000 compensation Depreciation and 125,000 163,000 401,000 518,000 amortization Lease abandonment — (3,000 ) 13,000 27,000 (recovery), net Impairment of — — — 15,208,000 goodwill Other 2,038,000 2,328,000 6,072,000 8,441,000 Total general and 8,313,000 8,837,000 25,547,000 45,376,000 administrative expenses Income (loss) 882,000 1,420,000 2,057,000 (20,480,000 ) from operations Other income (expense), net: Interest income 3,000 2,000 8,000 4,000 Interest expense (9,000 ) (28,000 ) (86,000 ) (80,000 ) Other, net 10,000 (14,000 ) 35,000 (35,000 ) Total other expense 4,000 (40,000 ) (43,000 ) (111,000 ) (income), net Income (loss) before income 886,000 1,380,000 2,014,000 (20,591,000 ) tax expense (benefit) Income tax expense 44,000 593,000 85,000 (2,991,000 ) (benefit) Net income $ 842,000 $ 787,000 $ 1,929,000 $ (17,600,000 ) (loss) Earnings (loss) per share: Basic $ 0.11 $ 0.11 $ 0.26 $ (2.41 ) Diluted $ 0.11 $ 0.11 $ 0.26 $ (2.41 ) Weighted-average shares outstanding: Basic 7,359,000 7,315,000 7,349,000 7,303,000 Diluted 7,526,000 7,315,000 7,443,000 7,303,000 WILLDAN GROUP, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Nine Months Ended September 27, September 28, 2013 2012 Cash flows from operating activities: Net income (loss) $ 1,929,000 $ (17,600,000 ) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 452,000 569,000 Deferred income taxes — (3,584,000 ) Impairment of goodwill — 15,208,000 Lease abandonment expense, net 13,000 27,000 (Gain) loss on sale of equipment (3,000 ) 17,000 Provision for doubtful accounts 219,000 793,000 Stock-based compensation 118,000 181,000 Changes in operating assets and liabilities: Accounts receivable 4,872,000 1,910,000 Costs and estimated earnings in excess of billings on uncompleted 295,000 9,518,000 contracts Other receivables 33,000 47,000 Prepaid expenses and other current 212,000 652,000 assets Other assets (7,000 ) 30,000 Accounts payable (3,551,000 ) (3,236,000 ) Accrued liabilities 620,000 (2,656,000 ) Billings in excess of costs and estimated earnings on uncompleted (805,000 ) 2,855,000 contracts Deferred lease obligations (232,000 ) (126,000 ) Net cash provided by operating 4,165,000 4,605,000 activities Cash flows from investing activities: Purchase of equipment and leasehold (248,000 ) (275,000 ) improvements Proceeds from sale of equipment 16,000 14,000 Net cash used in investing (232,000 ) (261,000 ) activities Cash flows from financing activities: Changes in excess of outstanding (19,000 ) (281,000 ) checks over bank balance Payments on notes payable (604,000 ) (582,000 ) Borrowings under line of credit 266,000 11,663,000 Repayments on line of credit (3,266,000 ) (8,919,000 ) Principal payments on capital lease (50,000 ) (126,000 ) obligations Proceeds from stock option exercise 15,000 10,000 Proceeds from sales of common stock 73,000 120,000 under employee stock purchase plan Net cash (used in) provided by (3,585,000 ) 1,885,000 financing activities Net increase in cash and cash 348,000 6,229,000 equivalents Cash and cash equivalents, including restricted cash, at beginning of the 10,006,000 3,001,000 period Cash and cash equivalents, including restricted cash, at end of the $ 10,354,000 $ 9,230,000 period Supplemental disclosures of cash flow information: Cash paid during the period for: Interest $ 86,000 $ 79,000 Income taxes 164,000 59,000 Supplemental disclosures of noncash investing and financing activities: Equipment acquired under capital $ 60,000 $ 93,000 lease obligations Contact: Willdan Group, Inc. Kimberly Gant Chief Financial Officer Tel: 714-940-6300 email@example.com or Financial Profiles, Inc. Moira Conlon Tel: 310-478-2700 x11 firstname.lastname@example.org
Willdan Reports Third Quarter 2013 Financial Results
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