Willdan Group (NASDAQ: WLDN), a provider of professional technical and
consulting services, today reported financial results for the fourth
quarter and fiscal year ended December 27, 2013, and provided a business
For the fourth quarter of 2013, Willdan reported total contract revenue
of $22.5 million and net income of $0.7 million, or $0.10 and $0.09 per
basic and diluted share, respectively.
For the fiscal year ended December 27, 2013, Willdan reported total
contract revenue of $85.5 million and a net income of $2.6 million, or
$0.36 and $0.35 per basic and diluted share, respectively.
"We are pleased with our results for the year," said Tom Brisbin,
Willdan's Chief Executive Officer. "Our Engineering Services segment
benefited from recovery in the residential housing market and additional
opportunities to outsource staffing for cities facing financial
challenges. We reported lower year-over-year revenues from our Energy
Efficiency Services segment in 2013. This was due mainly to changes in
our project with Consolidated Edison of New York, including our
transition to self-performing most of our energy subcontract work, which
decreased pass-through revenue and costs.
"We are excited about the California High Speed Rail project. We
performed our initial contract services in December on this project
under a limited notice to proceed and will be bidding with our joint
venture partners on the next two segments that we expect will be awarded
in the second half of 2014.
"We believe our prospects for 2014 are bright. In the latter part of
last year, we created a new group in our Engineering Services segment
that is dedicated to large-scale, high-value infrastructure products and
we expect this group and our full Engineering Services segment to be
growing contributors to revenues in 2014. We will continue to manage
expenses carefully and expect another profitable year in 2014."
Fourth Quarter Financial Highlights
Total contract revenue for the fourth quarter of 2013 was $22.5 million
compared with $22.9 million for the fourth quarter of 2012. The decrease
was due primarily to lower energy efficiency services in the State of
New York. Engineering Services contract revenue for the fourth quarter
2013 of $9.2 million increased by 7.8% from the prior year, due mainly
to greater demand for our city engineering, building and safety,
construction management and geotechnical services in California. For the
fourth quarter of 2013, revenues from Public Finance Services were $2.4
million and Homeland Security Services were $1.3 million.
Net income for quarter ended December 27, 2013 was $0.7 million, or
$0.10 per diluted share, as compared to net income of $0.3 million, or
$0.04 per share, for the comparable quarter ended December 28, 2012.
Revenue, net of subcontractor costs, for the fourth quarter of 2013 was
$17.7 million, compared to revenue, net of subcontractor costs for the
fourth quarter of 2012 of $15.8 million.
Direct costs of $13.5 million for the fourth quarter of 2013 decreased
17.0% compared with the prior period, primarily as a result of a
decrease in direct costs within our Energy Efficiency Services segment
of $11.5 million. Adjusted EBITDA (as defined below) was $0.9 million
compared with $1.4 million for the fourth quarter of 2012.
Full Year 2013 Financial Highlights
Total contract revenue for 2013 was $85.5 million compared with $93.4
million for 2012, primarily due to a 20.9% decline in revenue from our
Energy Efficiency Service segment to $36.0 million, as a result of a
decrease in services provided in the state of New York. Engineering
Services contract revenue for 2013 of $35.2 million increased by 3.5%
from the prior year, due mainly to demand for city engineering services,
building and safety, construction management and geotechnical services
in California. For 2013, revenues from Public Finance Services were $9.8
million and Homeland Security Services were $4.4 million.
Net income for 2013 was $2.6 million, or $0.35 per diluted share,
compared with a net loss of $17.3 million, or $2.37 per share.
Revenue, net of subcontractor costs, for 2013 was $68.7 million,
compared to revenue, net of subcontract costs for 2012 of $57.3 million.
Direct costs of $48.9 million for 2013 decreased 17.0% compared with
2012, primarily as a result of a decrease in subcontractor services and
other direct costs used primarily by the Energy Efficiency Services
segment. Operating income of $2.6 million for the fiscal year ended
December 27, 2013 improved substantially from an operating loss of
$19.3 million for the fiscal year ended December 28, 2012, which
included a $15.2 million impairment of goodwill charge. Adjusted EBITDA
was $3.4 million compared with a loss of $3.3 million for 2012. Income
tax expense for 2013 was $0.1 million compared with a benefit of $2.1
million for 2012.
Willdan reported $8.1 million in cash and cash equivalents at December
27, 2013, compared with $10.0 million at December 28, 2012. Willdan's
primary sources of liquidity are cash generated from operations and a
revolving line of credit with BMO Harris Bank, N.A., which matures on
March 24, 2016.
At December 27, 2013, Willdan had federal and state operating loss
carryovers of $6.8 million and $9.8 million, respectively.
Use of Non-GAAP Financial Measures
"Revenues, net of subcontractor costs," a non-GAAP financial measure, is
a supplemental measure that Willdan believes enhances investors' ability
to analyze our business trend and performance because it substantially
measures the work performed by our employees. In the course of providing
services, we routinely subcontract various services. Generally, these
subcontractor costs are passed through to our clients and, in accordance
with GAAP and industry practice, are included in our revenue when it is
our contractual responsibility to procure or manage these activities.
Because subcontractor services can vary significantly from project to
project and period to period, changes in revenue may not necessarily be
indicative of our business trends. Accordingly, we segregate costs from
revenue to promote a better understanding of our business by evaluating
revenue exclusive of costs associated with external service providers. A
reconciliation of contract revenue as reported in accordance with U.S.
Generally Accepted Accounting Principles (GAAP) to revenues, net of
subcontractor costs is provided at the end of this news release.
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 and other
non-recurring income and expense items occurring in such period. Willdan
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. A
reconciliation of net income (loss) as reported in accordance with U.S.
GAAP to Adjusted EBITDA is provided at the end of this news release.
Willdan's definition of Revenues, net of subcontractor costs and
Adjusted EBITDA may differ from other companies reporting similarly
names measures. These measures 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. GAAP, such as contract
revenues and net income.
Conference Call Details
Chief Executive Officer Thomas Brisbin and Chief Financial Officer Stacy
McLaughlin will host a conference call today, March 25, 2014, at 5:00
p.m. Eastern Time/2:00 p.m. Pacific Time, to discuss Willdan's financial
results and provide a business update.
Interested parties may participate in the conference call by dialing
877-941-0844 (480-629-9835 for international callers). When prompted,
ask for the "Willdan Group, Inc., Fourth Quarter 2013 Conference Call."
The conference call will be webcast simultaneously on Willdan's website
under Investors: Events.
The telephonic replay of the conference call may be accessed
approximately two hours after the call through April 8, 2013, by dialing
800-406-7325 (303-590-3030 for international callers). The replay access
code is 4662028. The webcast replay will be archived for 12 months.
About Willdan Group, Inc.
Celebrating its 50th year of business, Willdan provides outsourced
professional technical and consulting services to public agencies,
public and private utilities, and commercial and industrial firms
throughout the United States. Willdan benefits from well-established
relationships, industry-leading expertise and a solid reputation for
delivering projects on time and on budget. The company's service
offerings span a broad set of complementary disciplines that include
engineering and planning, energy efficiency and sustainability,
financial and economic consulting, and national preparedness. Willdan
has crafted this set of integrated services so that, in the face of an
evolving environment-whether economic, natural, or built-Willdan can
continue to extend the reach and resources of its clients. For
additional information, visit Willdan's website at www.willdan.com.
Forward Looking Statements
Statements in this press release that 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 to be filed for the year ended
December 27, 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.
at December 27, 2013 and December 28, 2012, respectively
shares issued and outstanding at December 27, 2013 and December
28, 2012, respectively
December 27, 2013
The following is a reconciliation of net income (loss) to Adjusted
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