Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended July 3, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 001-33076 WILLDAN GROUP, INC. (Exact Name of Registrant as Specified in Its Charter) (State or Other Jurisdiction of Incorporat ...

Willdan Group, Inc. (NASDAQ:WLDN) Q1 2020 Results Conference Call May 7, 2020 5:30 PM ET Company Participants Tony Rossi - Financial Profiles, Inc. Thomas Brisbin - Chairman and Chief Executive Officer Stacy McLaughlin - Chief Financial Officer Mike Bieber - President Conference Call Participants Craig Irwin - ROTH Capital Partners Jed Dorsheimer - Canaccord Genuity Operator Good day, and welcome to the Willdan Group First Quarter 2020 Conference Call. Today's conference is being recorded. At this time, I w ...

Financial Performance - Total contract revenue for the three months ended April 3, 2020, was $106,026,000, representing an increase of 15.5% compared to $91,793,000 for the same period in 2019[18]. - Net loss for the three months ended April 3, 2020, was $8,154,000, compared to a net loss of $417,000 for the same period in 2019, indicating a significant increase in losses[18]. - The company reported a comprehensive loss of $8,603,000 for the three months ended April 3, 2020, compared to a comprehensive loss of $636,000 for the same period in 2019, indicating worsening financial performance[18]. - Segment profit (loss) before income tax expense for the Energy segment was a loss of $6.406 million, while the Engineering and Consulting segment reported a profit of $2.004 million[106]. - The company experienced a net loss of $8.2 million for the three months ended April 3, 2020, compared to a net loss of $0.4 million in the same period last year[177]. Cash Flow and Liquidity - Cash and cash equivalents increased to $12,304,000 as of April 3, 2020, from $5,452,000 at the end of December 27, 2019, reflecting a positive cash flow trend[16]. - The company reported a net cash provided by operating activities of $16,455,000 for the three months ended April 3, 2020, compared to $10,487,000 for the same period in 2019, indicating improved operational efficiency[22]. - Cash flows from operating activities were $16.5 million for the three months ended April 3, 2020, compared to $10.5 million for the same period in 2019, driven by acquisitions and reduced working capital requirements[193]. - Cash flows used in investing activities decreased to $2.1 million for the three months ended April 3, 2020, from $23.7 million for the same period in 2019, primarily due to cash paid for equipment and leasehold improvements[194]. - Cash flows used in financing activities were $7.4 million for the three months ended April 3, 2020, compared to cash flows provided of $9.0 million for the same period in 2019, mainly due to repayments under term loan and revolving credit[195]. Assets and Liabilities - Total current assets decreased to $146,334,000 as of April 3, 2020, down from $175,473,000 at December 27, 2019, indicating a reduction in liquidity[16]. - Total liabilities decreased to $251,066,000 as of April 3, 2020, from $272,635,000 at December 27, 2019, showing a reduction in financial obligations[16]. - Total accrued liabilities decreased from $67.6 million in December 2019 to $39.9 million in April 2020[73]. - Total debt as of April 3, 2020, is $126.659 million, a decrease from $131.060 million as of December 27, 2019[82]. - The company has outstanding borrowings on Term A Loan of $92.5 million as of April 3, 2020, down from $95 million on December 27, 2019[82]. Acquisitions - The Company acquired E3, Inc. for up to $44.0 million, which includes $27.0 million in cash and potential earn-out payments of up to $12.0 million based on financial targets[126][127]. - E3, Inc. contributed $5.0 million in revenue and $0.9 million of income from operations during the three months ended April 3, 2020[133]. - The acquisition of Onsite Energy Corporation had a total consideration of $24.905 million, with cash paid amounting to $24.411 million[137]. - Onsite Energy contributed $2.2 million in revenue during the three months ended April 3, 2020, with no income from operations reported[139]. - The acquisition of The Weidt Group had a cash purchase price of $22.136 million, with no working capital adjustments[142]. Operational Impact of Covid-19 - In fiscal 2019, approximately 40% of the gross Energy segment revenue was derived from direct install programs serving small businesses, which are currently suspended due to Covid-19 restrictions[32]. - The Company executed a reduction in workforce impacting approximately 300 staff members due to government-mandated work restrictions[33]. - The Company enhanced liquidity in the first quarter of fiscal year 2020 by minimizing working capital and improving cash collections, and amended its credit facilities in May 2020 for increased financial flexibility[35]. - The Company expects significant budget shortfalls for many governmental and public agencies in 2020, potentially leading to delayed funding for existing contracts[38]. - The Company has implemented a temporary freeze on all non-critical spending, including travel and capital expenditures[39]. Revenue Recognition and Contracts - The Company recognizes revenue for time-and-materials contracts based on actual hours incurred at contractually agreed rates, including all reimbursable costs[48]. - Approximately 2.0% to 3.0% of the Company's consolidated contract revenue may comprise segmented contracts, which could result in different rates of profitability[51]. - The Company has retainage of approximately $4.4 million and $5.4 million included in contract assets as of April 3, 2020, and December 27, 2019, respectively[67]. - The Company recognizes software license revenue at a point in time when control is transferred to the client[69]. - The Company performs regular reviews of contract-related estimates through a disciplined project review process[56]. Customer Concentration - The Company derived 29.2% of its consolidated contract revenue from two customers, LADWP and DASNY, for the three months ended April 3, 2020[111]. - The top 10 customers accounted for 58.1% of the Company's consolidated contract revenue for the three months ended April 3, 2020, compared to 55.0% for the same period in 2019[111]. Goodwill and Intangible Assets - Goodwill increased from $127.6 million in December 2019 to $130.0 million in April 2020, with an addition of $2.4 million[74]. - Total intangible assets as of April 3, 2020, amounted to $98.158 million, with accumulated amortization of $24.578 million[76]. - Customer relationships represent the largest component of intangible assets at $60.733 million, with accumulated amortization of $9.688 million[76]. - The company recorded $21.5 million of goodwill from the acquisition of E3, Inc., which is expected to be tax deductible[130]. - The company recorded $9.0 million of goodwill from the acquisition of Onsite Energy, also expected to be tax deductible[136]. Debt and Financial Agreements - The Company entered into an interest rate swap agreement with a notional amount of $35 million, fixing the interest rate at 2.47% until January 31, 2022[79]. - The fair value of the interest rate swap agreement liabilities was $(624,000) as of April 3, 2020, compared to $(241,000) on December 27, 2019[80]. - The Company was in compliance with all covenants contained in the credit agreement as of April 3, 2020[86]. - The Company expects to borrow additional amounts under its existing credit facility during the second half of fiscal year 2020[35]. Cost Management - General and administrative expenses surged by $12.8 million, or 48.9%, totaling $39.0 million, largely due to increased salaries and costs from acquisitions[184]. - The company has implemented cost-saving measures in response to the impact of Covid-19, aiming to manage expenses effectively[186]. - Salaries and wages within direct costs increased to 17.8% of contract revenue, up from 16.2% in the previous year, while subcontractor services decreased to 53.2%[183].

Willdan Group, Inc. (NASDAQ:WLDN) Q4 2019 Results Conference Call March 5, 2020 5:30 PM ET Company Participants Tony Rossi - Financial Profiles, Inc. Thomas Brisbin - Chairman and Chief Executive Officer Stacy McLaughlin - Chief Financial Officer Mike Bieber - President Conference Call Participants Moshe Katri - Wedbush Securities Craig Irwin - Roth Capital Partners Operator Good day, everyone. Welcome to the Willdan Group Fourth Quarter 2019 Conference Call. Today's conference is being recorded. At this ti ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year Ended December 27, 2019. ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Transition Period from to . Commission File Number 001‑33076 WILLDAN GROUP, INC. (Exact name of registrant as specified in its charter) Delaware (State or other jurisdict ...

Financial Data and Key Metrics Changes - Total contract revenue for Q3 2019 increased by 65% to $117.5 million from $71.4 million in Q3 2018, driven by growth in the Energy segment and contributions from recent acquisitions [6][7] - Net revenue rose by 47.1% to $50.8 million from $34.5 million in the same quarter last year [7] - Adjusted EBITDA for Q3 2019 was $11.6 million, an increase of 63.3% from $7.1 million in Q3 2018 [14] - Net income for Q3 2019 was $400,000 or $0.04 per diluted share, while adjusted net income was $7.6 million or $0.65 per diluted share [13] Business Line Data and Key Metrics Changes - Within the Energy segment, net revenue increased by 81% [8] - The Engineering and Consulting segment's net revenue remained consistent with the same period last year [8] - Direct costs of contract revenue were $82.8 million, up 72.3% from $48.1 million in the prior year, representing 70% of total contract revenue compared to 67% previously [9] Market Data and Key Metrics Changes - Organic growth was reported at -11% for the quarter, with a 4% reduction attributed to software sales through Integral Analytics and 6% due to California investor-owned utilities slowing down [19][20] - The company expects organic growth to return to over 10% in 2020 as California contracts are anticipated to start [20] Company Strategy and Development Direction - The company is focusing on expanding its capabilities and services beyond traditional energy efficiency, including HVAC and controls, which is seen as a positive development for future organic growth [24] - The acquisition of Energy and Environmental Economics (E3) is expected to enhance strategic planning and provide visibility into future energy policies [27][31] - The company is ramping up program expansions with major clients, including Con Edison and LADWP, and is optimistic about future profitability [19][32] Management's Comments on Operating Environment and Future Outlook - Management expressed disappointment in organic growth but remains confident in the pipeline and future opportunities, particularly in California [20][32] - The company has reduced its financial guidance for fiscal 2019 due to slower earnings ramp but expects continued growth in the fourth quarter [16][32] - Management highlighted the importance of cash generation and maintaining a leverage ratio of around 2 to 2.5 times EBITDA for future investments [62] Other Important Information - General and administrative expenses increased to $33.4 million from $18.4 million, primarily due to higher salaries and wages from recent acquisitions [10] - The company incurred $1.3 million in interest expense in Q3 2019, significantly higher than $22,000 in the same period last year, due to debt from acquisitions [12] Q&A Session Summary Question: What held back the ramp of new projects in the quarter? - Management revised guidance downwards due to performance issues in the first three quarters, but expects a ramp in the fourth quarter driven by increased budgets from clients like Con Edison [37][38] Question: What is the outlook for organic growth? - Management indicated that both lumpier deals and California's progress are necessary for achieving the 10% organic growth target [39] Question: Can you provide details on the E3 acquisition? - Management has known E3 for over 2.5 years and expects strong synergy and contributions to revenue from this acquisition [43][44] Question: What is the impact of intangible amortization expense? - The increase in intangible amortization expense is related to purchase price allocation from acquisitions, and it is included in adjusted EPS calculations [47][48] Question: What is the revenue expectation for E3 in Q4? - The revenue contribution from E3 in Q4 is expected to be minimal due to the timing of the acquisition, but integration is not anticipated to be disruptive [63][64] Question: Are there contracts in California EE procurements currently in negotiation? - Management indicated that decisions from utilities are pending, and no contracts have been finalized yet [68]

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) This section presents Willdan Group, Inc.'s unaudited condensed consolidated financial statements for the periods ended September 27, 2019 [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets increased to **$362.6 million** from **$300.9 million** due to acquisitions, with liabilities also rising Condensed Consolidated Balance Sheet Highlights (in thousands) | Balance Sheet Item | Sep 27, 2019 | Dec 28, 2018 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $0 | $15,259 | | Contract assets | $86,676 | $51,851 | | Goodwill | $103,090 | $97,748 | | Other intangible assets, net | $68,808 | $44,364 | | **Total assets** | **$362,612** | **$300,911** | | **Liabilities & Equity** | | | | Accounts payable | $34,254 | $36,829 | | Notes payable | $103,282 | $70,786 | | **Total liabilities** | **$207,581** | **$156,622** | | **Total stockholders' equity** | **$155,031** | **$144,289** | [Condensed Consolidated Statements of Comprehensive Income](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) Q3 2019 contract revenue grew **64.6%** to **$117.5 million** due to acquisitions, but net income declined to **$0.4 million** Q3 2019 vs Q3 2018 Performance (in thousands, except per share) | Metric | Q3 2019 | Q3 2018 | | :--- | :--- | :--- | | Contract revenue | $117,494 | $71,386 | | Gross Profit | $34,672 | $23,313 | | Income from operations | $1,295 | $4,913 | | Net income | $416 | $3,311 | | Diluted EPS | $0.04 | $0.35 | Nine Months 2019 vs 2018 Performance (in thousands, except per share) | Metric | Nine Months 2019 | Nine Months 2018 | | :--- | :--- | :--- | | Contract revenue | $313,683 | $185,814 | | Gross Profit | $91,756 | $66,003 | | Income from operations | $3,834 | $11,092 | | Net income | $1,639 | $8,829 | | Diluted EPS | $0.14 | $0.95 | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operations decreased to **$8.3 million**, while investing activities used **$52.1 million** for acquisitions Cash Flow Summary - Nine Months Ended (in thousands) | Cash Flow Activity | Sep 27, 2019 | Sep 28, 2018 | | :--- | :--- | :--- | | Net cash provided by operating activities | $8,289 | $11,569 | | Net cash used in investing activities | ($52,130) | ($3,673) | | Net cash provided by (used in) financing activities | $28,582 | ($5,639) | | **Net (decrease) increase in cash** | **($15,259)** | **$2,257** | - Cash paid for acquisitions, net of cash acquired, was a significant use of cash at **$46.5 million** for the nine months ended September 27, 2019[20](index=20&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail accounting policies and financial results, highlighting the impact of recent acquisitions, segment reporting, and new debt facilities - The company operates in two segments: **Energy**, providing energy and sustainability consulting, and **Engineering and Consulting**, offering civil engineering, construction management, and financial consulting services[30](index=30&type=chunk) - On July 2, 2019, the company acquired Onsite Energy Corporation for a maximum aggregate purchase price of **$26.4 million** in cash, contributing **$4.8 million** in Q3 2019 revenue[72](index=72&type=chunk)[77](index=77&type=chunk) - On March 8, 2019, the company acquired The Weidt Group's energy practice for **$22.1 million** in cash, contributing **$3.5 million** in Q3 2019 revenue[78](index=78&type=chunk)[86](index=86&type=chunk) - The acquisition of Lime Energy in November 2018 for **$122.4 million** contributed **$40.8 million** in revenue during Q3 2019[88](index=88&type=chunk)[94](index=94&type=chunk) - On June 26, 2019, the company entered into a new Credit Agreement providing a **$100.0 million** Term A Loan, a **$50.0 million** Delayed Draw Term Loan, and a **$50.0 million** Revolving Credit Facility[108](index=108&type=chunk)[109](index=109&type=chunk) - Subsequent to quarter end, on October 28, 2019, the company acquired Energy and Environmental Economics, Inc. (E3, Inc.) for up to **$44.0 million**, funded by a **$27.0 million** draw on its Delayed Draw Term Loan[162](index=162&type=chunk)[167](index=167&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=39&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial performance, highlighting revenue growth from acquisitions offset by declining net income due to higher costs and amortization [Results of Operations](index=48&type=section&id=Results%20of%20Operations) Q3 2019 consolidated revenue increased **64.6%** to **$117.5 million** due to acquisitions, but operating income and net income significantly declined Q3 2019 vs Q3 2018 Results Summary (in thousands) | Metric | Q3 2019 | Q3 2018 | % Change | | :--- | :--- | :--- | :--- | | Contract Revenue | $117,494 | $71,386 | 64.6% | | Gross Profit | $34,672 | $23,313 | 48.7% | | Income from Operations | $1,295 | $4,913 | (73.6)% | | Net Income | $416 | $3,311 | (87.4)% | - The increase in Q3 revenue was primarily due to incremental revenue from the acquisitions of **Onsite Energy**, **The Weidt Group**, and **Lime Energy**[238](index=238&type=chunk) - The decrease in Q3 operating income was primarily attributable to higher amortization expenses from recent acquisitions and a shift in project mix towards services with higher subcontractor costs[241](index=241&type=chunk)[249](index=249&type=chunk) [Liquidity and Capital Resources](index=53&type=section&id=Liquidity%20and%20Capital%20Resources) Liquidity relies on cash from operations and credit facilities, with **$97.5 million** Term A Loan and **$5.0 million** Revolving Credit Facility outstanding - As of September 27, 2019, the company had **$97.5 million** outstanding on its Term A Loan and **$5.0 million** outstanding on its **$50.0 million** Revolving Credit Facility[266](index=266&type=chunk) - Cash flows from operating activities decreased to **$8.3 million** for the first nine months of 2019 from **$11.6 million** in the prior-year period[268](index=268&type=chunk) - Investing activities used **$50.4 million** in cash, primarily for the acquisitions of **The Weidt Group** and **Onsite Energy**[269](index=269&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=57&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is exposed to interest rate risk from variable-rate debt, partially hedged by a **$35.0 million** interest rate swap at **2.47%** - The company is subject to interest rate risk from its variable-rate Term A Loan, Revolving Credit Facility, and Delayed Draw Term Loan[292](index=292&type=chunk) - To hedge against interest rate fluctuations, the company entered into a **$35.0 million** notional interest rate swap agreement, fixing the rate at **2.47%** on that portion of its debt until January 2022[294](index=294&type=chunk) - A hypothetical one percentage point increase in the effective interest rate would increase annual interest expense by approximately **$1.0 million**[295](index=295&type=chunk) [Item 4. Controls and Procedures](index=57&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded the company's disclosure controls and procedures were effective as of September 27, 2019, while integrating controls of acquired businesses - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of September 27, 2019[298](index=298&type=chunk) - The company is in the process of integrating the internal controls of the recently acquired **Lime Energy**, **The Weidt Group**, and **Onsite Energy**[299](index=299&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=58&type=section&id=Item%201.%20Legal%20Proceedings) The company is subject to ordinary course claims and lawsuits, with management expecting no material adverse effect on financial statements - The company is subject to claims and lawsuits arising in the ordinary course of business, typical for the engineering and consulting industry[301](index=301&type=chunk) - Management does not expect the ultimate liability from current legal proceedings to have a material adverse effect on its financial statements[303](index=303&type=chunk) [Item 1A. Risk Factors](index=58&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors were reported for the quarter, consistent with the prior Annual Report on Form 10-K - No material changes to risk factors were reported for the quarter[304](index=304&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=58&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) On September 4, 2019, the company issued **53,102** common shares to two Onsite Energy executives in an unregistered private placement - The company issued **53,102** shares of common stock to two executives of **Onsite Energy** on September 4, 2019, as part of a private placement[305](index=305&type=chunk)[307](index=307&type=chunk) [Item 5. Other Information](index=59&type=section&id=Item%205.%20Other%20Information) This section details the October 28, 2019, acquisition of E3, Inc. for up to **$44.0 million**, funded by cash, stock, and earn-out payments - On October 28, 2019, the company acquired **E3, Inc.**, an energy consulting firm[310](index=310&type=chunk) - The total consideration is up to **$44.0 million**, including **$27.0 million** cash upfront, **$5.0 million** in stock, and a potential **$12.0 million** earn-out[310](index=310&type=chunk) - The acquisition was financed with a **$27.0 million** borrowing under the company's Delayed Draw Term Loan[316](index=316&type=chunk)

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 28, 2019 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 001-33076 WILLDAN GROUP, INC. (Exact Name of Registrant as Specified in Its Charter) Delaware 14-195112 (State or Other Jurisd ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 29, 2019 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 001-33076 WILLDAN GROUP, INC. (Exact Name of Registrant as Specified in Its Charter) Delaware 14-195112 (State or Other Juris ...

Table of Contents (Mark One) UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10‑K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year Ended December 28, 2018. ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Transition Period from to . Commission File Number 001‑33076 WILLDAN GROUP, INC. (Exact name of registrant as specified in its charter) Delaware (State or other jurisdict ...