Willdan Group, Inc. : Willdan Reports Third Quarter 2011 Financial Results
11/10/2011| 04:05pm US/Eastern
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Willdan Group, Inc. ("Willdan") (NASDAQ:WLDN), today announced
financial results for its third quarter ended September 30, 2011.
For the third quarter of 2011, Willdan reported total contract revenue
of $28.6 million and net income of $2.2 million, or $0.29 per share.
Tom Brisbin, Willdan's Chief Executive Officer, stated: "Our third
quarter improvements in revenue and profits demonstrate that the
investments we made in key people and technology earlier in the year are
paying off. While the California economy remains challenged, we are
seeing strength in other markets where we are leveraging our expertise
to win new business. We are pleased with our continued progress and on
track for a profitable year in 2011."
Third Quarter 2011 Results
For the third quarter of fiscal 2011, revenue was $28.6 million, up $7.9
million, or 38.1%, from revenue of $20.7 million for the comparable
period last year. On a sequential basis, revenue was up $2.8 million, or
10.8%, from the second quarter of fiscal 2011. Income from operations
was $2.4 million for the third quarter of fiscal 2011, as compared to
income from operations of $1.4 million for the comparable period last
year. On a sequential basis, income from operations was up $1.4 million
from income from operations of $1.0 million for the second quarter of
fiscal 2011.
Net income was $2.2 million for the third quarter of fiscal 2011, as
compared to net income of $0.8 million for the comparable period last
year and net income of $0.7 million for the second quarter of 2011.
Basic and diluted earnings per share for the third quarter of fiscal
2011 were $0.30 and $0.29, respectively, as compared to basic and
diluted earnings per share of $0.11 for the comparable period last year.
Willdan generated $1.5 million in cash flows from operations in the
third quarter of fiscal 2011.
Nine Months 2011 Results
For the nine months ended September 30, 2011, revenue was $77.2 million,
up $19.1 million, or 33.0%, from revenue of $58.0 million in the
comparable period last year. Income from operations was $3.1 million for
the nine months ended September 30, 2011 as compared to income from
operations of $3.0 million for the comparable period last year. Net
income was $2.6 million for the nine months ended September 30, 2011 as
compared to net income of $2.4 million for the comparable period last
year.
Basic and diluted earnings per share for the nine months ended September
30, 2011 were $0.36 and $0.35, respectively, as compared to basic and
diluted earnings per share of $0.34 for the comparable period last year.
Willdan generated $3.1 million in cash flow from operations in the nine
months ended September 30, 2011.
Three Months Ended
Nine Months Ended
In thousands (except per share data)
September 30, 2011
October 1, 2010
September 30, 2011
October 1, 2010
Revenue
$
28,605
$
20,706
$
77,159
$
58,024
Income from operations
2,380
1,394
3,054
3,044
Interest income
1
3
5
9
Interest expense
(21
)
(11
)
(53
)
(37
)
Other, net
8
(3
)
5
17
Income tax expense
203
595
402
595
Net income
$
2,165
$
788
$
2,609
$
2,438
Earnings per share:
Basic
$
0.30
$
0.11
$
0.36
$
0.34
Diluted
$
0.29
$
0.11
$
0.35
$
0.34
Weighted average shares outstanding:
Basic
7,267
7,236
7,258
7,229
Diluted
7,468
7,318
7,478
7,274
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
pre-tax net income plus (minus) net interest expense (income),
depreciation and amortization, lease abandonment expense (recovery) and
loss (gain) on sale of assets. Willdan's definition of Adjusted EBITDA
may differ from those of many companies reporting similarly named
measures. This measure should be considered in addition to, and not as a
substitute for or superior to, other measures of financial performance
prepared in accordance with U.S. generally accepted accounting
principles, or GAAP, such as net income. Willdan believes Adjusted
EBITDA enables management to separate unusual or infrequent income and
expense items from its results of operations to provide a more
normalized and consistent view of operating performance on a
period-to-period basis. Willdan uses Adjusted EBITDA to evaluate its
performance for, among other things, budgeting, forecasting and
incentive compensation purposes. Willdan also believes Adjusted EBITDA
is useful to investors, research analysts, investment bankers and
lenders because it removes from its operational results the impact of
certain unusual or infrequent income and expense items, which may
facilitate comparison of its results from period to period.
Adjusted EBITDA is not a recognized term under GAAP and does not purport
to be an alternative to income from operations or net income as an
indicator of operating performance or any other GAAP measure.
Adjusted EBITDA increased $0.1 million to $3.8 million for the nine
months ended September 30, 2011 from $3.7 million for the comparable
period last year.
The following is a reconciliation of net income to Adjusted EBITDA:
In thousands
Nine Months Ended
September 30, 2011
October 1, 2010
Net income
$
2,609
$
2,438
Interest income
(5
)
(9
)
Interest expense
53
37
Loss (gain) on sale of equipment
1
(17
)
Income tax expense
402
595
Depreciation and amortization
733
752
Lease abandonment expense (recovery), net
9
(62
)
Adjusted EBITDA
$
3,802
$
3,734
Liquidity and Capital Resources
Willdan had $8.3 million in cash and cash equivalents at September 30,
2011, compared with $6.6 million at December 31, 2010. Willdan has a
$5.0 million bank revolving line of credit, with $2.9 million in
outstanding borrowings at the quarter's end.
Conference Call and Webcast
Chief Executive Officer Thomas Brisbin and Chief Financial Officer
Kimberly Gant plan to host a conference call on November 10, 2011 at
5:00 p.m. Eastern/2:00 p.m. Pacific, to further discuss the Company's
financial results.
Interested parties may participate in the conference call by dialing
877-941-0843 (480-629-9819 for international callers). When prompted,
ask for the "Willdan Group, Inc., Third Quarter 2011 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 24, 2011, by
dialing 800-406-7325 (303-590-3030 for international callers). The
replay access code is 4483424. The webcast replay will be archived for
12 months.
About Willdan Group, Inc.
Founded over 45 years ago, Willdan is a provider of professional
technical and consulting services to small and mid-sized public
agencies, large public utilities and, to a lesser extent, private
industry primarily located in California, New York and Arizona. Willdan
provides a broad range of services to clients, including civil
engineering and planning, energy efficiency and sustainability, economic
and financial consulting, and homeland security and communications and
technology. For additional information, visit Willdan's website at www.willdan.com.
Forward-Looking Statements
Safe Harbor Statement: Statements in this press release which are not
purely historical, including statements regarding Willdan's intentions,
hopes, beliefs, expectations, representations, projections, estimates,
plans or predictions of the future are forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995. The
forward-looking statements involve risks and uncertainties including,
but not limited to, the risk that Willdan will not be able to expand its
services or meet the needs of customers in markets in which it operates.
It is important to note that Willdan's actual results could differ
materially from those in any such forward-looking statements. Factors
that could cause actual results to differ materially include, but are
not limited to, a slowdown in the local and regional economies of the
states where Willdan conducts business and the loss of or inability to
hire additional qualified professionals. Willdan's business could be
affected by a number of other factors, including the risk factors listed
from time to time in Willdan's SEC reports including, but not limited
to, the Form 10-K annual report for the year ended December 31, 2010
filed on March 29, 2011. Willdan cautions investors not to place undue
reliance on the forward-looking statements contained in this press
release. Willdan disclaims any obligation to, and does not undertake to,
update or revise any forward-looking statements in this press release.
WILLDAN GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
September 30, 2011
December 31, 2010
(unaudited)
Assets
Current assets:
Cash and cash equivalents
$
8,275,000
$
6,642,000
Accounts receivable, net of allowance for doubtful accounts of
$810,000 and $959,000 at September 30, 2011 and December 31,
2010, respectively
14,755,000
14,484,000
Costs and estimated earnings in excess of billings on uncompleted
contracts
16,418,000
11,343,000
Other receivables
242,000
176,000
Prepaid expenses and other current assets
1,005,000
1,714,000
Total current assets
40,695,000
34,359,000
Equipment and leasehold improvements, net
1,245,000
1,496,000
Goodwill
15,208,000
12,475,000
Other intangible assets, net
59,000
95,000
Other assets
395,000
407,000
Deferred income taxes, net of current portion
622,000
622,000
Total assets
$
58,224,000
$
49,454,000
Liabilities and Stockholders' Equity
Current liabilities:
Excess of outstanding checks over bank balance
$
989,000
$
1,223,000
Borrowings under line of credit
2,920,000
1,000,000
Accounts payable
6,024,000
5,380,000
Accrued liabilities
9,638,000
5,985,000
Billings in excess of costs and estimated earnings on uncompleted
contracts
1,156,000
1,041,000
Current portion of notes payable
101,000
90,000
Current portion of capital lease obligations
155,000
173,000
Current portion of deferred income taxes
1,407,000
1,407,000
Total current liabilities
22,390,000
16,299,000
Notes payable, less current portion
95,000
131,000
Capital lease obligations, less current portion
106,000
96,000
Deferred lease obligations
617,000
766,000
Total liabilities
23,208,000
17,292,000
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:
7,272,000 and 7,246,000 shares issued and outstanding at
September 30, 2011 and December 31, 2010, respectively
73,000
72,000
Additional paid-in capital
34,009,000
33,765,000
Accumulated earnings (deficit)
934,000
(1,675,000
)
Total stockholders' equity
35,016,000
32,162,000
Total liabilities and stockholders' equity
$
58,224,000
$
49,454,000
WILLDAN GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended
Nine Months Ended
September 30,
October 1,
September 30,
October 1,
2011
2010
2011
2010
Contract revenue
$
28,605,000
$
20,706,000
$
77,159,000
$
58,024,000
Direct costs of contract revenue (exclusive of depreciation and
amortization shown separately below):
Salaries and wages
6,568,000
5,570,000
19,567,000
16,196,000
Subconsultant services
8,825,000
5,433,000
22,618,000
10,912,000
Other direct costs
1,462,000
448,000
3,749,000
3,434,000
Total direct costs of contract revenue
16,855,000
11,451,000
45,934,000
30,542,000
General and administrative expenses:
Salaries and wages, payroll taxes and employee benefits
5,381,000
4,093,000
16,245,000
13,019,000
Facilities and facilities related
1,266,000
1,117,000
3,663,000
3,246,000
Stock-based compensation
40,000
52,000
148,000
180,000
Depreciation and amortization
197,000
231,000
683,000
741,000
Lease abandonment (recovery) expense, net
--
(75,000
)
9,000
(62,000
)
Other
2,486,000
2,443,000
7,423,000
7,314,000
Total general and administrative expenses
9,370,000
7,861,000
28,171,000
24,438,000
Income from operations
2,380,000
1,394,000
3,054,000
3,044,000
Other income (expense), net:
Interest income
1,000
3,000
5,000
9,000
Interest expense
(21,000
)
(11,000
)
(53,000
)
(37,000
)
Other, net
8,000
(3,000
)
5,000
17,000
Total other expense, net
(12,000
)
(11,000
)
(43,000
)
(11,000
)
Income before income taxes
2,368,000
1,383,000
3,011,000
3,033,000
Income tax expense
203,000
595,000
402,000
595,000
Net income
$
2,165,000
$
788,000
$
2,609,000
$
2,438,000
Earnings per share:
Basic
$
0.30
$
0.11
$
0.36
$
0.34
Diluted
$
0.29
$
0.11
$
0.35
$
0.34
Weighted-average shares outstanding:
Basic
7,267,000
7,236,000
7,258,000
7,229,000
Diluted
7,468,000
7,318,000
7,478,000
7,274,000
WILLDAN GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Nine Months Ended
September 30, 2011
October 1, 2010
Cash flows from operating activities:
Net income
$
2,609,000
$
2,438,000
Adjustments to reconcile net income to net cash provided by
operating activities:
Non-cash revenue from subcontractor settlement
(902,000
)
--
Depreciation and amortization
733,000
752,000
Lease abandonment expense (recovery), net
9,000
(62,000
)
Loss (gain) on sale of equipment
1,000
(17,000
)
Provision for doubtful accounts
131,000
259,000
Stock-based compensation
148,000
180,000
Changes in operating assets and liabilities:
Accounts receivable
(402,000
)
(1,578,000
)
Costs and estimated earnings in excess of billings on uncompleted
contracts
(5,075,000
)
(5,259,000
)
Income tax receivable
--
(4,000
)
Other receivables
(66,000
)
(165,000
)
Prepaid expenses and other current assets
709,000
391,000
Other assets
12,000
(92,000
)
Accounts payable
1,546,000
1,487,000
Accrued liabilities
3,653,000
2,817,000
Billings in excess of costs and estimated earnings on uncompleted
contracts
115,000
245,000
Deferred lease obligations
(158,000
)
(97,000
)
Net cash provided by operating activities
3,063,000
1,295,000
Cash flows from investing activities:
Purchase of equipment and leasehold improvements
(309,000
)
(363,000
)
Proceeds from sale of equipment
6,000
31,000
Payments for business acquisition
(2,733,000
)
(2,103,000
)
Net cash used in investing activities
(3,036,000
)
(2,435,000
)
Cash flows from financing activities:
Changes in excess of outstanding checks over bank balance
(234,000
)
335,000
Payments on notes payable
(48,000
)
(20,000
)
Proceeds from notes payable
23,000
--
Borrowings under line of credit
22,682,000
8,970,000
Repayments on line of credit
(20,762,000
)
(8,970,000
)
Principal payments on capital lease obligations
(152,000
)
(102,000
)
Proceeds from stock option exercise
4,000
--
Proceeds from sales of common stock under employee stock purchase
plan
93,000
87,000
Net cash provided by financing activities
1,606,000
300,000
Net increase (decrease) in cash and cash equivalents
1,633,000
(840,000
)
Cash and cash equivalents at beginning of the period
6,642,000
8,445,000
Cash and cash equivalents at end of the period
$
8,275,000
$
7,605,000
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest
$
51,000
$
35,000
Income taxes
51,000
5,000
Supplemental disclosures of noncash investing and financing
activities:
Equipment acquired under capital lease obligations
$
159,000
$
88,000
Willdan Group, Inc. Kimberly Gant Chief Financial Officer Tel:
714-940-6300 kgant@willdan.com or Financial
Profiles, Inc. Moira Conlon Tel: 310-478-2700 x11 mconlon@finprofiles.com
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