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Willdan Group Inc. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: May 14, 2009 08:01PM

Willdan Group Inc. (WLDN) filed Quarterly Report for the period ended 2009-04-03. WILLDAN GROUP INC. is a leading single resource provider of specialized outsourced services to small and mid-sized public agencies located primarily in California and other western states. Willdan Group Inc. assists cities and other government agencies with a broad range of services including civil engineering building and safety services geotechnical engineering financial and economic consulting and disaster preparedness and homeland security. Strategically located throughout California and other Western states Willdan's market focus and competitive advantages support ample opportunities for geographic expansion into attractive growing markets driven by unmet demand for privatized governmental services. Willdan's depth of executive expertise and specialized talent base has delivered a track record of consistent growth in contract revenues and strong performance metrics. Willdan Group Inc. has a market cap of $10.3 million; its shares were traded at around $1.44 with and P/S ratio of 0.1.

Highlight of Business Operations:

Contract revenue. Our contract revenue was $17.2 million for the three months ended April 3, 2009, with $13.3 million attributable to the Engineering Services segment and $3.0 million attributable to the Public Finance Services segment. Our Homeland Security Services segment generated $0.9 million during this period. Consolidated contract revenue decreased $0.6 million, or 3.4%, to $17.2 million for the three months ended April 3, 2009, from $17.8 million for the three months ended March 28, 2008. This was due primarily to a decrease of $1.0 million, or 7.0%, in contract revenue for the Engineering Services segment primarily as a result of the continuing decline in our building and safety projects which is directly and indirectly affected by the residential housing market. Contract revenue in the Public Finance Services segment decreased $0.2 million, or 6.2%, from $3.2 million to $3.0 million for the three months ended April 3, 2009 as compared to the three months ended March 28, 2008. Contract revenue for our Homeland Security Services segment increased $0.6 million, or 200%, from $0.3 million to $0.9 million in the three months ended April 3, 2009 as compared to the three months ended March 28, 2008.

Direct costs of contract revenue. Direct costs of contract revenue were $8.3 million for the three months ended April 3, 2009, with $7.1 million attributable to the Engineering Services segment and $0.8 million attributable to the Public Finance Services segment. The additional $0.4 million is attributable to direct costs of contract revenue for our Homeland Security Services segment. Direct costs of contract revenue for the Engineering Services segment for the three months ended April 3, 2009 includes $2.5 million relating to Willdan Energy Solutions. Overall, direct costs increased by $1.2 million, or 16.4%, to $8.3 million for the three months ended April 3, 2009, from $7.1 million for the three months ended March 28, 2008. This increase is attributable to increases in direct costs within our Engineering Services and Homeland Security Services segments of $0.9 million and $0.3 million, respectively. Direct costs within the Public Finance Services segment remained flat.

Direct costs increased as a result of increases in subconsultant services and other direct costs of $1.2 million and $0.8 million, respectively, partially offset by a decrease in salaries and wages of $0.8 million. Within direct costs of contract revenue, salaries and wages decreased to 27.9% of contract revenue for the three months ended April 3, 2009 from 31.2% for the three months ended March 28, 2008. Comparing those same periods, subconsultant services increased to 14.1% of contract revenue from 7.2% of contract revenue. Direct costs, and in particular subconsultant costs, increased primarily due to our acquisition of Willdan Energy Solutions in June 2008. Willdan Energy Solutions generally utilizes a higher percentage of subconsultants than our other subsidiaries.

General and administrative expenses. General and administrative expenses decreased by $1.0 million, or 9.4%, to $9.6 million for the three months ended April 3, 2009 from $10.6 million for the three months ended March 28, 2008. This was due primarily to a decrease of $0.9 million in general and administrative expenses of the Engineering Services segment, net of the increase in general and administrative expenses incurred due to our acquisition of Willdan Energy Solutions in June 2008. General and administrative expenses increased by $0.1 million for our Public Finance Services segment and decreased by 0.1 million for our Homeland Security Services segment, and our unallocated corporate expenses decreased by $0.1 million. General and administrative expenses as a percentage of contract revenue decreased to 55.8% for the three months ended April 3, 2009 from 59.6% for the three months ended March 28, 2008.

Cash flows used in investing activities were $0.1 million for the three months ended April 3, 2009 compared to $3.2 million for the three months ended March 28, 2008. Cash flows used in investing activities for the three months ended April 3, 2009 were comparatively lower than in the three months ended March 28, 2008 primarily due to net purchases of liquid investments totaling $3.0 million in the 2008 period compared to no net purchases of liquid investments in the 2009 period.

Cash flows provided by financing activities were $0.6 million for the three months ended April 3, 2009 compared to $0.2 million used in financing activities for the three months ended March 28, 2008. This net change of $0.8 million resulted primarily from a $0.4 million change for the excess of outstanding checks over bank balance and a $0.4 million reduction in payments on notes payable.

Read the The complete Report



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