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Willdan Group Inc. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: May 14, 2012 04:26PM

Willdan Group Inc. (WLDN) filed Quarterly Report for the period ended 2012-03-30. Willdan Group has a market cap of $18.6 million; its shares were traded at around $2.52 with a P/E ratio of 10.2 and P/S ratio of 0.2.



Highlight of Business Operations:

Contract revenue. Our contract revenue was $25.5 million for the three months ended March 30, 2012, with $7.9 million attributable to the Engineering Services segment, $14.3 million attributable to the Energy Efficiency Services segment, $2.3 million attributable to the Public Finance Services segment, and $1.0 million attributable to the Homeland Security Services segment. Consolidated contract revenue increased $2.7 million, or 12.0%, to $25.5 million for the three months ended March 30, 2012 from $22.7 million in the three months ended April 1, 2011. This increase was due primarily to an increase of $4.1 million, or 40.4%, in contract revenue of the Energy Efficiency Services segment as a result of the increase in demand for the energy efficiency, sustainability and renewable energy services of our subsidiary, Willdan Energy Solutions. Contract revenue for the Engineering Services segment decreased $0.9 million, or 10.1%, to $7.9 million for the three months ended March 30, 2012 from $8.7 million for the three months ended April 1, 2011. Contract revenue in the Homeland Security Services segment decreased $0.5 million, or 31.8%, to $1.0 million for the three months ended March 30, 2012 from $1.5 million for the three months ended April 1, 2011. Contract revenue for our Public Finance Services segment remained flat for the three months ended March 30, 2012 as compared to the three months ended April 1, 2011.

Direct costs of contract revenue. Direct costs of contract revenue were $17.2 million for the three months ended March 30, 2012, with $4.3 million attributable to the Engineering Services segment, $11.6 million attributable to the Energy Efficiency Services segment, $0.8 million attributable to the Public Finance Services segment, and $0.5 million attributable to the Homeland Security Services segment. Overall, direct costs increased by $3.6 million, or 26.8%, to $17.2 million for the three months ended March 30, 2012, from $13.6 million for the three months ended April 1, 2011. This increase is primarily attributable to an increase in direct costs within our Energy Efficiency Services segment and our Public Finance Services segment of $4.3 million, or 59.1%, and $0.1 million, or 11.8%, respectively. Direct costs of contract revenue decreased by $0.6 million, or 11.8%, and $0.2 million, or 25.9%, in our Engineering Services and Homeland Security Services segments, respectively.

Direct costs increased primarily as a result of increases in subconsultant services and other direct costs of $3.7 million and $0.3 million, respectively, partially offset by a decrease in salaries and wages of $0.4 million. Within direct costs of contract revenue, salaries and wages decreased to 23.4% of contract revenue for the three months ended March 30, 2012 from 28.0% for the three months ended April 1, 2011 and subconsultant services increased to 42.9% of contract revenue for the three months ended March 30, 2012 from 31.8% of contract revenue for the three months ended April 1, 2011. Subconsultant services increased primarily because of increased demand for the energy efficiency, sustainability and renewable energy services of our subsidiary Willdan Energy Solutions, which generally utilizes a higher percentage of subconsultants than our other subsidiaries. Increased chargeability of labor also shifted more employee related costs to direct costs of contract revenue because we only allocate the portion of salaries and wages related to time spent directly generating revenues to direct costs of contract revenue.

General and administrative expenses. General and administrative expenses increased by $1.1 million, or 12.0%, to $10.6 million for the three months ended March 30, 2012 from $9.5 million for the three months ended April 1, 2011. This was due primarily to an increase of $1.7 million in general and administrative expenses of the Energy Efficiency Services segment. General and administrative expenses decreased by $0.4 million and $0.2 million, for our Public Finance Services and Homeland Security Services segments, respectively, and remained flat for our Engineering Services segment. Our unallocated corporate expenses also remained flat. General and administrative expenses as a percentage of contract revenue remained flat for the three months ended March 30, 2012 as compared to the three months ended April 1, 2011.

(Loss) income from operations. As a result of the above factors, our operating loss was $2.3 million for the three months ended March 30, 2012 as compared to an operating loss of $0.3 million for the three months ended April 1, 2011. Loss from operations as a percentage of contract revenue was (9.1)% for the three months ended March 30, 2012, as compared to (1.2)% in the prior year period.

Read the The complete Report



Stocks Discussed: WLDN,
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