EX-99.1 2 wldn-20240502xex99d1.htm EX-99.1

Exhibit 99.1

Graphic

Willdan Group Reports

First Quarter Results

ANAHEIM, Calif. –May 2, 2024 – Willdan Group, Inc. (“Willdan”) (Nasdaq: WLDN) today reported financial results for its first quarter ended March 29, 2024.

“We had an excellent first quarter,” said Mike Bieber, Willdan’s President and Chief Executive Officer. “Revenue, profitability, earnings, and cash flow were above expectations. We saw strength in both government and utility customers, plus strong software sales. The rapid growth in electricity demand from artificial intelligence and data centers is becoming a new catalyst in our market.”

First Quarter 2024 Highlights*

Consolidated contract revenue of $122.5 million, up 19.4%.
Net revenue** of $68.9 million, up 11.7%.
Net income of $2.9 million, up from net income of $0.9 million.
Adjusted EBITDA** of $11.0 million, up 11.7%.
GAAP Diluted EPS of $0.21, up from $0.07.
Adjusted Diluted EPS** of $0.40, up from $0.32.

Fiscal Year 2024 Financial Targets

We are reaffirming our 2024 financial targets:

Net revenue** between $270 million and $280 million.
Adjusted Diluted EPS** between $1.80 per share and $1.87 per share.
Adjusted EBITDA** between $48 million and $50 million.

Assumes 14.2 million diluted shares, 25% effective tax rate, and no future acquisitions.

*As compared to the same period of fiscal 2023.

**See “Use of Non-GAAP Financial Measures” below.


First Quarter 2024 Conference Call

Willdan will be hosting a conference call to discuss its first quarter financial results today, at 5:30 p.m. Eastern/2:30 p.m. Pacific. To access the call, listeners should dial 877-407-2988 (or 201-389-0923) approximately five minutes prior to the scheduled start time. The conference call will be webcast simultaneously on Willdan’s website at https://edge.media-server.com/mmc/p/gf7u4cva.

A replay of the conference call will be available through Willdan’s website at https://ir.willdangroup.com/events-presentations.

An Investor Report containing supplemental financial information can also be accessed through Willdan’s website at https://ir.willdangroup.com and selecting “Stock Information”.

About Willdan Group, Inc.

Willdan is a nationwide provider of professional, technical and consulting services to utilities, government agencies, and private industry. Willdan’s service offerings span a broad set of complementary disciplines that include electric grid solutions, energy efficiency and sustainability, engineering and planning, and municipal financial consulting. For additional information, visit Willdan's website at www.willdan.com.

Use of Non-GAAP Financial Measures

“Net Revenue,” defined as contract revenue as reported in accordance with U.S. generally accepted accounting principles (“GAAP”) minus subcontractor services and other direct costs, is a non-GAAP financial measure. Net Revenue is a supplemental measure that Willdan believes enhances investors’ ability to analyze Willdan’s business trends and performance because it substantially measures the work performed by Willdan’s employees. In the course of providing services, Willdan routinely subcontracts various services. Generally, these subcontractor services and other direct costs are passed through to Willdan’s clients and, in accordance with GAAP and industry practice, are included in Willdan’s revenue when it is Willdan’s contractual responsibility to procure or manage such subcontracted activities. Because subcontractor services and other direct costs can vary significantly from project to project and period to period, changes in revenue may not necessarily be indicative of Willdan’s business trends. Accordingly, Willdan segregates subcontractor services and other direct costs from revenue to promote a better understanding of Willdan’s business by evaluating revenue exclusive of subcontract services and other direct costs associated with external service providers. A reconciliation of Willdan’s contract revenue as reported in accordance with GAAP to Net Revenue is provided at the end of this press release. A reconciliation of targeted contract revenue for fiscal year 2024 as reported in accordance with GAAP to targeted Net Revenues for fiscal year 2024, which is a forward-looking non-GAAP financial measure, is not provided because Willdan is unable to provide such reconciliation without unreasonable effort. The inability to provide a reconciliation is due to the uncertainty and inherent difficulty of predicting the subcontractor services and other director costs that are subtracted from contract revenues in order to derive Net Revenues. While subcontractor costs have increased recently, subcontractor costs can vary significantly from period to period. Subcontractor costs and other direct costs were 43.7% and 47.1% of contract revenue for the quarter ended March 29, 2024 and fiscal year 2023, respectively, and 39.9% and 47.2% for the quarter ended March 31, 2023 and fiscal year 2022, respectively.

“Adjusted EBITDA,” defined as net income plus interest expense, income tax expense, stock-based compensation, interest accretion, depreciation and amortization, and gain on sale of equipment, is a non-GAAP financial measure. Adjusted EBITDA is a supplemental measure used by Willdan’s management to measure Willdan’s operating performance. Willdan believes Adjusted EBITDA is useful because it allows Willdan’s management to evaluate its operating performance and compare the results of its operations from period to period and against its peers without regard to its financing methods, capital structure and non-operating expenses. Willdan uses Adjusted EBITDA to evaluate its performance for, among other things, budgeting, forecasting and incentive compensation purposes.

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Certain items excluded from Adjusted EBITDA are significant components in understanding and assessing a company’s financial performance, such as a company’s costs of capital and stock-based compensation, as well as the historical costs of depreciable assets. A reconciliation of net income as reported in accordance with GAAP to Adjusted EBITDA is provided at the end of this press release. A reconciliation of targeted net income for fiscal year 2024 as reported in accordance with GAAP to Adjusted EBITDA for fiscal year 2024, which is a forward-looking non-GAAP financial measure, is not provided because Willdan is unable to provide such reconciliation without unreasonable effort. The inability to provide a reconciliation is due to the uncertainty and inherent difficulty of predicting the interest expense, income tax expense, stock-based compensation, interest accretion, depreciation and amortization, and gain on sale of equipment that are subtracted from net income in order to derive Adjusted EBITDA.

“Adjusted Net Income,” defined as net income plus stock-based compensation, intangible amortization, interest accretion, refinancing costs, and tax benefit distribution, each net of tax, is a non-GAAP financial measure.

“Adjusted Diluted EPS,” defined as net income plus stock-based compensation, intangible amortization, interest accretion, refinancing costs, and tax benefit distribution, each net of tax, all divided by the diluted weighted-average shares outstanding, is a non-GAAP financial measure. Adjusted Net Income and Adjusted Diluted EPS are supplemental measures used by Willdan’s management to measure its operating performance. Willdan believes Adjusted Net Income and Adjusted Diluted EPS are useful because they allow Willdan’s management to more closely evaluate and explain the operating results of Willdan’s business by removing certain non-operating expenses.

Reconciliations of net income as reported in accordance with GAAP to Adjusted Net Income and diluted EPS as reported in accordance with GAAP to Adjusted Diluted EPS are provided at the end of this press release. Reconciliations of targeted net income as reported in accordance with GAAP to targeted Adjusted Net Income for fiscal year 2024, which is a forward-looking non-GAAP financial measure, and targeted diluted EPS as reported in accordance with GAAP to targeted Adjusted Diluted EPS for fiscal year 2024, which is a forward-looking non-GAAP financial measure, are not provided because Willdan is unable to provide such reconciliations without unreasonable effort. The inability to provide such reconciliations is due to the uncertainty and inherent difficulty of predicting the stock-based compensation, intangible amortization, and interest accretion, each net of tax, that are subtracted from net income and diluted EPS in order to derive Adjusted Net Income and Adjusted Diluted EPS, respectively.

Willdan’s definitions of Net Revenue, Adjusted EBITDA, Adjusted Net Income and Adjusted Diluted EPS have limitations as analytical tools and may differ from other companies reporting similarly named measures or from similarly named measures Willdan has reported in prior periods. 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 GAAP, such as contract revenue, net income and diluted EPS.

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, assumptions, aims, plans or predictions of the future are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended, including statements regarding financial targets for fiscal year 2024. All statements other than statements of historical fact included in this press release are forward-looking statements. It is important to note that Willdan’s actual results could differ materially from those in any such forward-looking statements. Important factors that could cause actual results to differ materially from its expectations include, but are not limited to, Willdan’s ability to adequately complete projects in a timely manner, Willdan’s ability to compete successfully in the highly competitive energy services market, Willdan’s reliance on work from its top ten clients; changes in state, local and regional economies and government budgets; Willdan’s ability to win new contracts, to renew existing contracts and to compete effectively for contracts awarded through bidding processes; Willdan’s ability to make principal and interest payments on its outstanding debt as they come due and to comply with financial covenants contained in its debt agreements; Willdan’s ability to manage supply chain constraints, labor shortages, rising interest rates, and rising inflation; Willdan’s ability to obtain financing and to refinance its outstanding debt as it matures; Willdan’s ability to successfully integrate its acquisitions and execute on its growth strategy; and Willdan’s ability to attract and retain managerial, technical, and administrative talent. 

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All written and oral forward-looking statements attributable to Willdan, or persons acting on its behalf, are expressly qualified in their entirety by the cautionary statements and risk factors disclosed from time to time in Willdan’s reports filed with the Securities and Exchange Commission, including, but not limited to, the Annual Report on Form 10-K filed for the year ended December 29, 2023, as such disclosures may be amended, supplemented or superseded from time to time by other reports Willdan files with the Securities and Exchange Commission, including subsequent Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q or Current Reports on Form 8-K. 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 unless required by law.

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WILLDAN GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except par value)

    

March 29,

    

December 29,

2024

2023

Assets

Current assets:

Cash and cash equivalents

$

46,925

$

23,397

Restricted cash

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

Liabilities and Stockholders’ Equity

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

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WILLDAN GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands, except per share amounts)

Three Months Ended

March 29,

March 31,

    

2024

    

2023

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

$

0.22

$

0.07

Diluted

$

0.21

$

0.07

Weighted-average shares outstanding:

Basic

 

13,605

 

13,266

Diluted

 

13,910

 

13,470

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WILLDAN GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

Three Months Ended

March 29,

March 31,

    

2024

    

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) provided by 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

Supplemental disclosures of cash flow information:

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

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Willdan Group, Inc. and Subsidiaries

Reconciliation of GAAP Revenue to Net Revenue

(in thousands)

(Non-GAAP Measure)

Three Months Ended

March 29,

March 31,

    

2024

    

2023

Consolidated

    

Contract revenue

$

122,489

$

102,603

Subcontractor services and other direct costs

53,559

40,912

Net Revenue

$

68,930

$

61,691

Energy segment

    

Contract revenue

$

100,746

$

83,285

Subcontractor services and other direct costs

52,654

40,078

Net Revenue

$

48,092

$

43,207

Engineering and Consulting segment

    

Contract revenue

$

21,743

$

19,318

Subcontractor services and other direct costs

905

834

Net Revenue

$

20,838

$

18,484

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Willdan Group, Inc. and Subsidiaries

Reconciliation of GAAP Net Income to Adjusted EBITDA

(in thousands)

(Non-GAAP Measure)

Three Months Ended

March 29,

    

March 31,

    

2024

2023

Net income (loss)

    

$

2,942

$

932

Interest expense

2,137

2,466

Income tax expense (benefit)

986

756

Stock-based compensation

1,390

1,533

Depreciation and amortization

3,592

4,200

(Gain) Loss on sale of equipment

(13)

(10)

Adjusted EBITDA

$

11,034

$

9,877

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Willdan Group, Inc. and Subsidiaries

Reconciliation of GAAP Net Income to Adjusted Net Income and Adjusted Diluted EPS

(in thousands, except per share amounts)

(Non-GAAP Measure)

Three Months Ended

March 29,

    

March 31,

    

2024

2023

Net income (loss)

    

$

2,942

$

932

Adjustment for stock-based compensation

1,390

1,533

Tax effect of stock-based compensation

(278)

(310)

Adjustment for intangible amortization

1,871

2,624

Tax effect of intangible amortization

(374)

(531)

Adjusted Net Income (Loss)

$

5,551

$

4,248

Diluted weighted-average shares outstanding

13,910

13,470

Diluted earnings (loss) per share

$

0.21

$

0.07

Impact of adjustment:

Stock-based compensation per share

0.10

0.12

Tax effect of stock-based compensation per share

(0.02)

(0.02)

Intangible amortization per share

0.14

0.19

Tax effect of intangible amortization per share

(0.03)

(0.04)

Adjusted Diluted EPS

$

0.40

$

0.32

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Contact:

Willdan Group, Inc.

Al Kaschalk

Vice President

Tel: 310-922-5643

akaschalk@willdan.com

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