Core Viewpoint - Investors are increasingly seeking growth stocks that demonstrate above-average growth potential, but identifying such stocks can be challenging due to inherent risks and volatility [1] Group 1: Company Overview - Willdan Group (WLDN) is highlighted as a recommended growth stock with a favorable Growth Score and a top Zacks Rank [2] - The company operates in the energy efficiency and sustainability consulting sector, which is currently positioned for growth [3] Group 2: Earnings Growth - Willdan has a historical EPS growth rate of 32.6%, with projected EPS growth of 28.6% for the current year, significantly outperforming the industry average of 5.6% [5] Group 3: Cash Flow Growth - The year-over-year cash flow growth for Willdan is reported at 44.2%, well above the industry average of 5.2% [6] - The company's annualized cash flow growth rate over the past 3-5 years stands at 12.7%, compared to the industry average of 10.8% [7] Group 4: Earnings Estimate Revisions - The current-year earnings estimates for Willdan have been revised upward, with the Zacks Consensus Estimate increasing by 5.8% over the past month [9] - Positive trends in earnings estimate revisions correlate strongly with near-term stock price movements, indicating favorable conditions for Willdan [8] Group 5: Investment Positioning - Willdan's combination of strong earnings growth, robust cash flow growth, and positive earnings estimate revisions positions it well for outperformance, making it an attractive option for growth investors [10]

Willdan Group, Inc. (NASDAQ:WLDN) Q3 2024 Earnings Conference Call October 31, 2024 5:30 PM ET Company Participants Al Kaschalk - VP of IR Michael Bieber - President & CEO Kim Early - EVP & CFO Conference Call Participants Craig Irwin - ROTH Capital Partners Jay McCanless - Wedbush Securities Operator Greetings, and welcome to the Willdan Group Third Quarter 2024 Financial Results Conference Call. At this time all participants are in a listen-only mode. A question and answer session will follow the formal p ...

Financial Performance - Contract revenue for the three months ended September 2024 was $158.252 million, compared to $132.738 million for the same period in 2023, representing a 19.2% increase[16] - Gross profit for the three months ended September 2024 was $51.601 million, up 18.8% from $43.428 million in the same period last year[16] - Net income for the three months ended September 2024 was $7.346 million, a significant increase from $1.566 million in the same period in 2023[16] - Diluted earnings per share for the three months ended September 2024 was $0.51, compared to $0.11 in the same period last year[16] - Net income for the nine months ended September 2024 was $14.882 million, a substantial increase from $2.895 million in the same period in 2023[16] - Total comprehensive income for the three months ended September 2024 was $6.668 million, compared to $1.566 million in the same period last year[16] - Net income for the nine months ended September 29, 2023, was $2,895 million, compared to $14,882 million for the same period in 2024[22] - Net income for the three months ended September 27, 2024, was $7.346 million, compared to $1.566 million for the same period in 2023[90] - Net income for the nine months ended September 27, 2024, was $14.882 million, compared to $2.895 million for the same period in 2023[90] - Net income for the three months ended September 27, 2024 was $7.346 million, with basic EPS of $0.53 and diluted EPS of $0.51[108] - Net income for the nine months ended September 27, 2024 was $14.882 million, with basic EPS of $1.08 and diluted EPS of $1.05[108] - Contract revenue for Q3 2024 increased by 19.2% to $158.252 million compared to $132.738 million in Q3 2023[125] - Gross profit for Q3 2024 rose by 18.8% to $51.601 million, with a gross margin of 32.6%[125] - Net income for Q3 2024 surged by 369.1% to $7.346 million compared to $1.566 million in Q3 2023[125] - Total contract revenue for the nine months ended September 2024 increased by 19.0% to $421.737 million compared to $354.418 million in the same period of 2023[128] - Net income for the nine months ended September 2024 jumped by 414.1% to $14.882 million compared to $2.895 million in the same period of 2023[128] - Net income for Q3 2024 was $7.3 million, a significant increase from $1.6 million in Q3 2023, driven by higher operating income and lower tax rates[146] - Net income for the nine months ended September 27, 2024, was $14.9 million, up from $2.9 million in the same period in 2023, due to higher operating income and lower tax rates[159] Expenses and Costs - Total general and administrative expenses for the three months ended September 2024 were $42.927 million, up 8.4% from $39.591 million in the same period in 2023[16] - Stock-based compensation expense for the three months ended September 2024 was $2.020 million, compared to $1.244 million in the same period last year[16] - Total direct costs of contract revenue for the nine months ended September 2024 were $273.914 million, up 19.6% from $229.076 million in the same period last year[16] - Stock-based compensation expense for the nine months ended September 29, 2023, was $4,064 million, compared to $5,355 million for the same period in 2024[22] - The company made matching contributions of $2.1 million to its defined contribution plan for the nine months ended September 27, 2024, compared to $1.9 million for the same period in 2023[82] - The company recorded an income tax expense of $0.2 million and $1.9 million for the three and nine months ended September 27, 2024, respectively[106] Revenue Recognition and Contracts - The company recognizes revenue using the percentage-of-completion method for fixed price contracts, based on the ratio of direct costs incurred-to-date to estimated total direct costs at completion[35] - Revenue on time-and-materials contracts is recognized based on actual hours incurred at contractually agreed rates per hour, including reimbursable costs[36] - Segmented contracts, which may comprise 2.0% to 3.0% of the company's consolidated contract revenue, are evaluated for separate revenue recognition based on technical resources and service demand[38] - Contract assets included retainage of approximately $18.9 million as of September 27, 2024, and $14.3 million as of December 29, 2023[53] - Revenue from fixed-price contracts for the three months ended September 27, 2024, was $75.052 million, with Energy contributing $73.596 million and Engineering & Consulting contributing $1.456 million[91] - Revenue from government clients for the three months ended September 27, 2024, was $83.270 million, with Energy contributing $61.115 million and Engineering & Consulting contributing $22.155 million[91] - Domestic revenue for the three months ended September 27, 2024, was $158.252 million, with no material revenue from foreign operations[91][95] - Fixed price contracts accounted for $75.052 million of total revenue in Q3 2024, representing 47.4% of total contract revenue[130] - Domestic revenue for Q3 2024 was $158.252 million, with no material revenue from foreign operations[130] - The company's contracts as of September 27, 2024, consist of 18% time-and-materials, 38% unit-based, and 44% fixed price contracts, compared to 21%, 39%, and 40% respectively as of September 29, 2023[179] Segment Performance - The company operates in two financial reporting segments: Energy and Engineering and Consulting[24] - Contract revenue for the three months ended September 27, 2024, was $158.252 million, with Energy contributing $134.036 million and Engineering & Consulting contributing $24.216 million[90] - Segment profit before income tax expense for the three months ended September 27, 2024, was $7.503 million, a significant increase from $2.279 million in the same period in 2023[90] - Contract revenue for the nine months ended September 27, 2024, was $421.737 million, with Energy contributing $352.634 million and Engineering & Consulting contributing $69.103 million[90] - Segment profit before income tax expense for the nine months ended September 27, 2024, was $16.745 million, up from $4.607 million in the same period in 2023[90] - Energy segment revenues for the three months ended September 27, 2024 were 22.1% derived from two customers, Southern California Edison and Clark County School District[98] - For the nine months ended September 27, 2024, no single customer accounted for 10% or more of the Energy segment revenues[98] - Energy segment revenue for Q3 2024 was $134.036 million, while Engineering and Consulting segment revenue was $24.216 million[130] - Government clients contributed $83.270 million to total revenue in Q3 2024, representing 52.6% of total contract revenue[130] - Utilities clients contributed $65.050 million to total revenue in Q3 2024, representing 41.1% of total contract revenue[130] - Energy segment contract revenue grew by $23.0 million (20.7%) in Q3 2024, primarily due to increased demand for energy efficiency and electrification services[135] - Engineering & Consulting segment contract revenue increased by $2.5 million (11.6%) in Q3 2024, driven by higher demand for client services[136] - Energy segment contract revenue for the nine months ended September 27, 2024, grew by $60.3 million (20.6%), driven by higher construction management revenues and energy services demand[147] Cash Flow and Financing - Net cash provided by operating activities for the nine months ended September 29, 2023, was $24,112 million, compared to $38,611 million for the same period in 2024[22] - The company's cash and cash equivalents totaled $53.106 million as of September 27, 2024, compared to $23.397 million as of December 29, 2023[55] - Cash flows used in financing activities were $2.9 million for the nine months ended September 27, 2024, compared to $21.6 million for the same period in 2023[167] - The company repaid $5.6 million under its Term Loan, used $1.2 million for withholding taxes on stock grants, and made $1.0 million in principal payments on finance leases during the nine months ended September 27, 2024[167] - The company received $2.8 million from sales of common stock under the employee stock purchase plan and $2.4 million from stock option exercises during the nine months ended September 27, 2024[167] - As of September 27, 2024, the company had $91.894 million in debt obligations, with $10.137 million due in less than 1 year and $81.757 million due in 1-3 years[173] - The company's total contractual cash obligations as of September 27, 2024, were $122.445 million, including $11.821 million in interest payments on outstanding debt[173] - As of September 27, 2024, the company had $92.5 million outstanding under its Term Loan and no borrowed amounts under its Revolving Credit Facility[194] - The company's Term Loan and Revolving Credit Facility mature on September 29, 2026, with the Term Loan amortizing at 7.5% per annum for the first year and 10.0% per annum for the second and third years[196] - The company had $53.1 million in cash and cash equivalents as of September 27, 2024, held in business checking accounts with BMO Bank, N.A.[193] - The company's borrowings under its Credit Agreement bear interest at either a Base Rate or the adjusted Secured Overnight Financing Rate (SOFR), plus an applicable margin ranging from 0.75% to 2.00% for Base Rate borrowings and 1.75% to 3.00% for SOFR borrowings[195] - The company entered into an interest rate swap agreement for $50.0 million notional amount with a fixed rate of 4.77%, expiring on September 29, 2026[197] - A one percentage point increase in the effective interest rate would change the company's annual interest expense by approximately $1.1 million in fiscal year 2024[198] Assets and Liabilities - Balance of retained earnings as of September 27, 2024 was $29.459 million, compared to $14.577 million at December 29, 2023[19] - The company's total assets increased from $181,502 million at December 30, 2022, to $191,073 million at September 29, 2023[21] - Retained earnings grew from $3,651 million at December 30, 2022, to $6,546 million at September 29, 2023[21] - Equipment and leasehold improvements, net increased to $28.955 million as of September 27, 2024, compared to $27.097 million as of December 29, 2023[56] - Total accrued liabilities rose to $58.521 million as of September 27, 2024, up from $54.129 million as of December 29, 2023[57] - Goodwill remained unchanged at $131.144 million as of September 27, 2024, with no additions or adjustments during the period[58] - Total intangible assets stood at $99.814 million as of September 27, 2024, with accumulated amortization of $73.273 million[59] - Total debt decreased to $92.637 million as of September 27, 2024, from $98.452 million as of December 29, 2023[68] - The company's composite interest rate was 7.2% as of September 27, 2024, excluding upfront fees, undrawn fees, and issuance cost amortization[69] - Right-of-use assets increased to $14.366 million as of September 27, 2024, from $12.465 million as of December 29, 2023[76] - Total lease liabilities increased to $16.102 million as of September 27, 2024, from $14.295 million as of December 29, 2023[76] - Weighted average remaining lease term for operating leases decreased to 3.05 years as of September 27, 2024, from 3.43 years as of December 29, 2023[76] - Weighted average discount rate for operating leases increased to 6.91% as of September 27, 2024, from 6.09% as of December 29, 2023[76] - Cash paid for operating leases was $4.707 million for the nine months ended September 27, 2024, compared to $4.318 million for the same period in 2023[77] - Total lease payments for operating leases as of September 27, 2024, are $18.056 million, with imputed interest of $1.954 million[78] Leases - The company leases office facilities and equipment under long-term, non-cancellable operating and finance leases expiring through 2029[71] - Financing lease assets are amortized over the life of the lease or the leased asset, with interest included in interest expense[73] - Operating lease cost for the three months ended September 27, 2024, was $1.522 million, compared to $1.464 million for the same period in 2023[75] - Total net lease cost for the three months ended September 27, 2024, was $1.946 million, compared to $1.802 million for the same period in 2023[75] Acquisitions and Investments - The company acquired Enica Engineering for a potential maximum purchase price of $18.0 million, with $12.0 million paid in cash on the closing date[116] - Enica's financial information will be included within the company's Energy segment starting in the fourth quarter of fiscal year 2024[118] - The company expects to finalize the purchase price allocation related to the Enica acquisition by the end of the second quarter of fiscal year 2025[118] Regulatory and Compliance - The company is evaluating the impact of ASU 2023-09 on its consolidated financial statements, which requires enhanced income tax disclosures[29] - The company is also assessing the implications of ASU 2023-07, which expands segment reporting requirements[30] - The company's disclosure controls and procedures were effective as of September 27, 2024, at a reasonable assurance level[200] - No material changes in internal control over financial reporting occurred during the reporting period[201] - The company accrues an undiscounted liability for loss contingencies where the loss is probable and the amount can be reasonably estimated[204] Market and Customer Concentration - The top 10 customers accounted for 49.1% of consolidated contract revenue for the three months ended September 27, 2024, and 49.5% for the nine months ended September 27, 2024[96] - Services provided to clients in California accounted for 42.2% and 43.3% of the company's consolidated contract revenue for the three and nine months ended September 27, 2024, respectively[100] - Services provided to clients in New York accounted for 21.0% and 23.7% of the company's consolidated contract revenue for the three and nine months ended September 27, 2024, respectively[100] Operational Challenges - The company's operations have not been materially impacted by inflation historically due to the average duration of projects and ability to negotiate prices[176] - The company has experienced higher costs of materials and supply chain delays, though not materially impacting results of operations and financial condition[177]

Willdan Group (WLDN) came out with quarterly earnings of $0.73 per share, beating the Zacks Consensus Estimate of $0.55 per share. This compares to earnings of $0.37 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 32.73%. A quarter ago, it was expected that this energy efficiency and sustainability consultant would post earnings of $0.29 per share when it actually produced earnings of $0.55, delivering a surprise of 89.66%.Ove ...

Exhibit 99.1 Willdan Group Reports Third Quarter 2024 Results ANAHEIM, Calif. –October 31, 2024 – Willdan Group, Inc. ("Willdan") (Nasdaq: WLDN) today reported financial results for its third quarter ended September 27, 2024. Third Quarter 2024 Highlights* ● Contract revenue of $158.3 million, up 19.2%. ● Net revenue** of $75.7 million, up 15.9%. ● Net income of $7.3 million, up from net income of $1.6 million. ● Adjusted EBITDA** of $15.2 million, up 49.7%. ● GAAP Diluted EPS of $0.51, up from $0.11. ● Adj ...

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