# EDGAR Filing Document

**Accession Number:** 0001370450
**File Stem:** 0001558370-23-003324
**Filing Date:** 2023-3
**Character Count:** 33729
**Document Hash:** 082972b228a7547b48e0080cf7d6dca8
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001558370-23-003324.hdr.sgml**: 20230309

**ACCESSION NUMBER**: 0001558370-23-003324

**CONFORMED SUBMISSION TYPE**: 8-K

**PUBLIC DOCUMENT COUNT**: 14

**CONFORMED PERIOD OF REPORT**: 20230309

**ITEM INFORMATION**: Results of Operations and Financial Condition

**ITEM INFORMATION**: Financial Statements and Exhibits

**FILED AS OF DATE**: 20230309

**DATE AS OF CHANGE**: 20230309

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Willdan Group, Inc.
- **CENTRAL INDEX KEY:** 0001370450
- **STANDARD INDUSTRIAL CLASSIFICATION:** SERVICES-ENGINEERING SERVICES [8711]
- **IRS NUMBER:** 141951112
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1230

**FILING VALUES:**
- **FORM TYPE:** 8-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-33076
- **FILM NUMBER:** 23720036

**BUSINESS ADDRESS:**
- **STREET 1:** 2401 EAST KATELLA AVENUE, SUITE 300
- **CITY:** ANAHEIM
- **STATE:** CA
- **ZIP:** 92806
- **BUSINESS PHONE:** 800-424-9144

**MAIL ADDRESS:**
- **STREET 1:** 2401 EAST KATELLA AVENUE, SUITE 300
- **CITY:** ANAHEIM
- **STATE:** CA
- **ZIP:** 92806

?xml version='1.0' encoding='UTF-8'?

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**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, DC 20549**

**FORM 8-K**

**CURRENT REPORT**

**Pursuant to Section 13 or 15(d) of the**

**Securities Exchange Act of 1934**

Date of Report (Date of earliest event reported): March 9, 2023

**WILLDAN GROUP, INC.**

(Exact name of registrant as specified in its charter)

---

| | | |
|:---|:---|:---|
| **Delaware** | **001-33076** | **14-1951112** |
| (State of other jurisdiction<br>of incorporation) | (Commission File Number) | (IRS Employer<br>Identification No.) |

---

**2401 East Katella Avenue, Suite 300, Anaheim, California 92806**

(Address of Principal Executive Offices)

Registrant's telephone number, including area code: **(800) 424-9144**

**Not Applicable**

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425).

☐ Soliciting material pursuant to Rule 14A-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

---

| | | |
|:---|:---|:---|
| &nbsp;&nbsp;**Title of each class** | &nbsp;&nbsp;**Trading Symbol(s)** | &nbsp;&nbsp;**Name of each exchange on which registered** |
| &nbsp;&nbsp;Common Stock, par value $0.01 per share | &nbsp;&nbsp;WLDN | &nbsp;&nbsp;The Nasdaq Stock Market LLC<br>(Nasdaq Global Market) |

---

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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**Item 2.02&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Results of Operations and Financial Condition**

Willdan Group, Inc. ("Willdan") issued a press release on March 9, 2023. The press release announced Willdan's financial results for the fourth quarter and fiscal year ended December 30, 2022. A copy of the press release is attached as Exhibit 99.1 hereto and is hereby incorporated herein by reference in its entirety. The information in this Item 2.02 and the attached Exhibit 99.1 to this Current Report on Form 8-K is being furnished (not filed) pursuant to Item 2.02 of Form 8-K.

**Item 9.01**&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Financial Statements and Exhibits**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(d)*&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *Exhibits.*

---

| | |
|:---|:---|
| **Exhibit No.** | **Document** |
| 99.1 | [Press Release of Willdan Group, Inc. dated March 9, 2023.](wldn-20230309xex99d1.htm)<br>|
| 104 | Cover Page Interactive Data File (embedded within the inline XBRL document). |

---

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

---

| | | |
|:---|:---|:---|
|  | WILLDAN GROUP, INC. | WILLDAN GROUP, INC. |
| Date: March 9, 2023 | By: | */s/ Creighton K. Early* |
|  |  | Creighton K. Early |
|  |  | Chief Financial Officer<br>*(Principal Financial Officer)* |

---

## Exhibit 99.1

**Exhibit 99.1**

**Willdan Group Reports** 

**Fourth Quarter/Full Year 2022 Results and Provides 2023 Outlook**

**ANAHEIM, Calif. –March 9, 2023** – Willdan Group, Inc. ("Willdan") (Nasdaq: WLDN) today reported financial results for its fourth quarter and fiscal year ended December 30, 2022 and outlook for 2023.

"In the fourth quarter, we achieved organic revenue growth of over 20% over the prior year," said Tom Brisbin, Willdan's Chairman and Chief Executive Officer. "Our energy efficiency, construction management, and civil engineering businesses, all performed very well in the fourth quarter and we successfully navigated several CA IOU contract changes. This fourth quarter momentum, and our start to the new year, underlies our expectation that 2023 will be a strong year."

**Fourth Quarter 2022 Highlights**

● Consolidated contract revenue was $113.3 million compared to $92.2 million in the fourth quarter of 2021, a 23% increase.

● Net revenue\* was $64.6 million compared to $51.8 million in the fourth quarter of 2021, a 25% increase.

● Net loss of $(0.4) million compared to a net loss of $(0.9) million in the fourth quarter of 2021, a 52% improvement.

● Adjusted EBITDA\* was $11.8 million compared to $9.4 million in the fourth quarter of 2021, a 25% increase.

● GAAP EPS was $(0.03) per diluted share compared to $(0.07) per diluted share in the fourth quarter of 2021, a 57% improvement.

● Adjusted Diluted EPS\* was $0.36 per share compared to $0.47 per share in the fourth quarter of 2021, a 23% decrease.

**Fiscal Year 2022 Highlights**

● Consolidated contract revenue was $429.1 million compared to $353.8 million in 2021, a 21% increase.

● Net revenue\* was $226.6 million compared to $201.5 million in 2021, a 12% increase.

● Net loss of $(8.4) million compared to a net loss of $(8.4) million in 2021.

● Adjusted EBITDA\* was $23.3 million compared to $27.5 million in 2021, a 15% decrease.

● GAAP EPS was $(0.65) per diluted share compared to $(0.68) per diluted share in 2021, a 4% improvement.

● Adjusted Diluted EPS\* was $0.88 per share compared to $1.55 per share in 2021, a 43% decrease.

**Fiscal Year 2023 Financial Targets**

● Net revenue\* growth between 7% and 9%.

● Adjusted Diluted EPS\* between $1.24 per share and $1.32 per share.

● Adjusted EBITDA\* between $35 million and $39 million.

\*See "Use of Non-GAAP Financial Measures" below.

The financial targets above assume no change in the current economic environment and do not include the effects of any acquisitions that may take place during fiscal year 2023. Certain components of the financial targets provided are subject to quarterly fluctuations.

------

**Fourth Quarter 2022 Conference Call**

Willdan will be hosting a conference call to discuss its fourth quarter and full year 2022 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 ir.willdangroup.com and selecting "Events & Presentations".

A replay of the conference call will be available through Willdan's website at ir.willdangroup.com and selecting "Events & Presentations".

An Investor Report containing supplemental financial information can also be accessed through Willdan's website at 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 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 U.S. generally accepted accounting principles ("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 2023 as reported in accordance with GAAP to targeted Net Revenues for fiscal year 2023, 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 43.0% and 47.2% of contract revenue for the quarter ended December 30, 2022 and fiscal year 2022, respectively, and 43.8% and 43.0% for the quarter ended December 31, 2021 and fiscal year 2021, respectively.

"Adjusted EBITDA," defined as net income plus interest expense, income tax expense, stock-based compensation, interest accretion, depreciation and amortization, transaction costs, gain on sale of equipment, and tax benefit distribution, 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.

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.

------

"Adjusted Net Income," defined as net income plus stock-based compensation, intangible amortization, interest accretion, transaction costs, deferred tax valuation, 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, transaction costs, deferred tax valuation, 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.

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, 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 Willdan's ability to capitalize on increased energy efficiency spending in large markets and expected benefits from its acquisitions and the impact of Covid-19 on Willdan's business. 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; Willdan's ability to attract and retain managerial, technical, and administrative talent and the extent to which the Covid-19 pandemic and measures taken to contain its spread ultimately impact Willdan's business, results of operation and financial condition.

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 30, 2022, 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**

**CONSOLIDATED BALANCE SHEETS**

**(in thousands, except par value)**

---

| | | |
|:---|:---|:---|
|  | **December 30,**<br>**2022** | **December 31,**<br>**2021** |
| **Assets** | **Assets** | **Assets** |
| Current assets: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Cash and cash equivalents | $8806 | $11221 |
| &nbsp;&nbsp;&nbsp;&nbsp;Restricted cash | 10679 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable, net of allowance for doubtful accounts of $640 and $1,115 at December 30, 2022 and December 31, 2021, respectively | 60202 | 67211 |
| &nbsp;&nbsp;&nbsp;&nbsp;Contract assets | 83060 | 59288 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other receivables | 4773 | 6267 |
| &nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets | 6454 | 4972 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current assets | 173974 | 148959 |
| Equipment and leasehold improvements, net | 22537 | 16757 |
| Goodwill | 130124 | 130124 |
| Right-of-use assets | 12390 | 15177 |
| Other intangible assets, net | 41486 | 52713 |
| Other assets | 10620 | 13843 |
| Deferred income taxes, net | 18543 | 16849 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total assets | $409674 | $394422 |
| **Liabilities and Stockholders' Equity** | **Liabilities and Stockholders' Equity** | **Liabilities and Stockholders' Equity** |
| Current liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounts payable | $28833 | $36672 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accrued liabilities | 59110 | 35680 |
| &nbsp;&nbsp;&nbsp;&nbsp;Contingent consideration payable | 4000 | 10206 |
| &nbsp;&nbsp;&nbsp;&nbsp;Contract liabilities | 12585 | 13499 |
| &nbsp;&nbsp;&nbsp;&nbsp;Notes payable | 16903 | 15036 |
| &nbsp;&nbsp;&nbsp;&nbsp;Finance lease obligations | 1113 | 539 |
| &nbsp;&nbsp;&nbsp;&nbsp;Lease liability | 4625 | 5575 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current liabilities | 127169 | 117207 |
| Contingent consideration payable |  | 832 |
| Notes payable | 90544 | 85538 |
| Finance lease obligations, less current portion | 1601 | 778 |
| Lease liability, less current portion | 8599 | 10768 |
| Other noncurrent liabilities | 259 | 78 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities | 228172 | 215201 |
| Commitments and contingencies |  |  |
| Stockholders' equity: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Preferred stock, $0.01 par value, 10,000 shares authorized, no shares issued and outstanding |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Common stock, $0.01 par value, 40,000 shares authorized; 13,296 and 12,804 shares issued and outstanding at December 30, 2022 and December 31, 2021, respectively | 133 | 128 |
| &nbsp;&nbsp;&nbsp;&nbsp;Additional paid-in capital | 177718 | 167032 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accumulated other comprehensive loss |  | (38) |
| &nbsp;&nbsp;&nbsp;&nbsp;Retained earnings | 3651 | 12099 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total stockholders' equity | 181502 | 179221 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities and stockholders' equity | $409674 | $394422 |

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**WILLDAN GROUP, INC. AND SUBSIDIARIES**

**CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME**

**(in thousands, except per share amounts)**

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended** | **Three Months Ended** | **Year Ended** | **Year Ended** |
|  | **December 30,**<br>**2022** | **December 31,**<br>**2021** | **December 30,**<br>**2022** | **December 31,**<br>**2021** |
| Contract revenue | $113256 | $92218 | $429138 | $353755 |
| Direct costs of contract revenue (inclusive of directly related depreciation and amortization): |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Salaries and wages | 21458 | 17116 | 82972 | 65648 |
| &nbsp;&nbsp;&nbsp;&nbsp;Subcontractor services and other direct costs | 48691 | 40373 | 202587 | 152233 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total direct costs of contract revenue | 70149 | 57489 | 285559 | 217881 |
| General and administrative expenses: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Salaries and wages, payroll taxes and employee benefits | 21632 | 16282 | 81801 | 73812 |
| &nbsp;&nbsp;&nbsp;&nbsp;Facilities and facility related | 2288 | 2523 | 9287 | 9896 |
| &nbsp;&nbsp;&nbsp;&nbsp;Stock-based compensation | 1747 | 2214 | 8373 | 16563 |
| &nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization | 4249 | 4468 | 17489 | 17146 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other | 8593 | 8115 | 33692 | 27148 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total general and administrative expenses | 38509 | 33602 | 150642 | 144565 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income (Loss) from operations | 4598 | 1127 | (7063) | (8691) |
| Other income (expense): |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest expense, net | (2112) | (769) | (5328) | (3869) |
| &nbsp;&nbsp;&nbsp;&nbsp;Other, net | (327) | 122 | 939 | 156 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total other expense, net | (2439) | (647) | (4389) | (3713) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income (Loss) before income taxes | 2159 | 480 | (11452) | (12404) |
| Income tax (benefit) expense | 2584 | 1370 | (3004) | (3987) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net income (loss) | (425) | (890) | (8448) | (8417) |
| Other comprehensive income (loss): |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unrealized gain (loss) on derivative contracts, net of tax |  | 107 | 38 | 450 |
| Comprehensive income (loss) | $(425) | $(783) | $(8410) | $(7967) |
| Earnings (Loss) per share: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Basic | $(0.03) | $(0.07) | $(0.65) | $(0.68) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Diluted | $(0.03) | $(0.07) | $(0.65) | $(0.68) |
| Weighted-average shares outstanding: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Basic | 13138 | 12660 | 13013 | 12458 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Diluted | 13138 | 12660 | 13013 | 12458 |

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**WILLDAN GROUP, INC. AND SUBSIDIARIES**

**CONSOLIDATED STATEMENTS OF CASH FLOWS** 

**(in thousands)**

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| | | |
|:---|:---|:---|
|  | **Year Ended** | **Year Ended** |
|  | **December 30,**<br>**2022** | **December 31,**<br>**2021** |
| Cash flows from operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net income (loss) | $(8448) | $(8417) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization | 17489 | 17146 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred income taxes, net | (1694) | (2738) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Gain) loss on sale/disposal of equipment | (64) | (24) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Provision for doubtful accounts | 243 | 102 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stock-based compensation | 8373 | 16563 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accretion and fair value adjustments of contingent consideration | 3168 | 2333 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Changes in operating assets and liabilities, net of effects from business acquisitions: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable | 6766 | (14209) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Contract assets | (23772) | 3138 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other receivables | 1494 | 138 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets | (1230) | 828 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other assets | 3223 | (7849) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable | (7839) | (4700) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued liabilities | 12970 | 1625 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Contract liabilities | (914) | 6065 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Right-of-use assets | (332) | (197) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash (used in) provided by operating activities | 9433 | 9804 |
| Cash flows from investing activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Purchase of equipment and leasehold improvements | (9602) | (8500) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from sale of equipment | 75 | 46 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash (used in) provided by investing activities | (9527) | (8454) |
| Cash flows from financing activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Payments on contingent consideration | (10206) | (6615) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Receipt of restricted cash | 10679 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Payments on notes payable | (1920) | (1909) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Payments on debt issuance costs | (177) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from notes payable | 1718 | 2074 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Borrowings under term loan facility and line of credit | 20000 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Repayments under term loan facility and line of credit | (13000) | (13000) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Principal payments on finance leases | (1054) | (545) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from stock option exercise | 274 | 1924 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from sales of common stock under employee stock purchase plan | 3036 | 2655 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash used to pay taxes on stock grants | (992) | (3117) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Restricted Stock Award and Units |  | (1) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash (used in) provided by financing activities | 8358 | (18534) |
| Net increase (decrease) in cash, cash equivalents and restricted cash | 8264 | (17184) |
| Cash, cash equivalents and restricted cash at beginning of period | 11221 | 28405 |
| Cash, cash equivalents and restricted cash at end of period | $19485 | $11221 |
| Supplemental disclosures of cash flow information: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash paid (received) during the period for: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest | $5066 | $3545 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income taxes | (1120) | (1616) |
| Supplemental disclosures of noncash investing and financing activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other working capital adjustment |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Equipment acquired under finance leases | 2451 | 1376 |

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**Willdan Group, Inc. and Subsidiaries**

**Reconciliation of GAAP Revenue to Net Revenue**

**(in thousands)**

(Non-GAAP Measure)

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended** | **Three Months Ended** | **Year Ended** | **Year Ended** |
|  | **December 30,**<br>**2022** | **December 31,**<br>**2021** | **December 30,**<br>**2022** | **December 31,**<br>**2021** |
| **Consolidated** |  |  |  |  |
| Contract revenue | $113256 | $92218 | $429138 | $353755 |
| Subcontractor services and other direct costs | 48691 | 40373 | 202587 | 152233 |
| Net Revenue | $64565 | $51845 | $226551 | $201522 |
| **Energy segment** |  |  |  |  |
| Contract revenue | $95274  | $76407  | $357460  | $286384  |
| Subcontractor services and other direct costs | 48020  | 40239  | 199465  | 146269  |
| Net Revenue | $47254  | $36168  | $157995  | $140115  |
| **Engineering and Consulting segment** |  |  |  |  |
| Contract revenue | $17982  | $15811  | $71678  | $67371  |
| Subcontractor services and other direct costs | 671  | 134  | 3122  | 5964  |
| Net Revenue | $17311  | $15677  | $68556  | $61407  |

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**Willdan Group, Inc. and Subsidiaries**

**Reconciliation of GAAP Net Income to Adjusted EBITDA**

**(in thousands)**

(Non-GAAP Measure)

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended** | **Three Months Ended** | **Year Ended** | **Year Ended** |
|  | **December 30,**<br>**2022** | **December 31,**<br>**2021** | **December 30,**<br>**2022** | **December 31,**<br>**2021** |
| Net income (loss) | $(425) | $(890) | $(8448) | $(8417) |
| Interest expense | 2112 | 769 | 5328 | 3869 |
| Income tax expense (benefit) | 2584 | 1370 | (3004) | (3987) |
| Stock-based compensation | 1747 | 2214 | 8373 | 16563 |
| Interest accretion (1) | 1509 | 1473 | 3168 | 2333 |
| Depreciation and amortization | 4249 | 4468 | 17489 | 17146 |
| Transaction costs (2) |  |  |  | 43 |
| (Gain) Loss on sale of equipment | 3 | 13 | (64) | (24) |
| Tax benefit distribution |  |  | 434 |  |
| Adjusted EBITDA | $11779 | $9417 | $23276 | $27526 |

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&nbsp;&nbsp;&nbsp;&nbsp;(1) Interest accretion represents the imputed interest and fair value adjustments to estimated contingent consideration.

&nbsp;&nbsp;&nbsp;&nbsp;(2) Transaction costs represents acquisition and acquisition related costs.

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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)

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended** | **Three Months Ended** | **Year Ended** | **Year Ended** |
|  | **December 30,**<br>**2022** | **December 31,**<br>**2021** | **December 30,**<br>**2022** | **December 31,**<br>**2021** |
| Net income (loss) | $(425) | $(890) | $(8448) | $(8417) |
| &nbsp;&nbsp;Adjustment for stock-based compensation | 1747 | 2214 | 8373 | 16563 |
| &nbsp;&nbsp;&nbsp;&nbsp;Tax effect of stock-based compensation | (249) | (278) | (1194) | (2079) |
| &nbsp;&nbsp;Adjustment for intangible amortization | 2697 | 2886 | 11228 | 11543 |
| &nbsp;&nbsp;&nbsp;&nbsp;Tax effect of intangible amortization | (385) | (362) | (1601) | (1449) |
| &nbsp;&nbsp;Adjustment for interest accretion | 1509 | 1473 | 3168 | 2333 |
| &nbsp;&nbsp;&nbsp;&nbsp;Tax effect of interest accretion | (215) | (185) | (452) | (293) |
| &nbsp;&nbsp;Adjustment for transaction costs |  |  |  | 43 |
| &nbsp;&nbsp;&nbsp;&nbsp;Tax effect of transaction costs |  |  |  | (5) |
| &nbsp;&nbsp;Adjustment for deferred tax valuation |  | 1105 |  | 1105 |
| &nbsp;&nbsp;&nbsp;&nbsp;Tax effect of deferred tax valuation |  |  |  |  |
| &nbsp;&nbsp;Adjustment for tax benefit distribution |  |  | 434 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Tax effect of tax benefit distribution |  |  | (62) |  |
| Adjusted Net Income (Loss) | $4679 | $5963 | $11446 | $19344 |
| Diluted weighted-average shares outstanding | 13138 | 12660 | 13013 | 12458 |
| Diluted earnings (loss) per share | $(0.03) | $(0.07) | $(0.65) | $(0.68) |
| &nbsp;&nbsp;Impact of adjustment:  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Stock-based compensation per share | 0.13 | 0.16 | 0.64 | 1.33 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Tax effect of stock-based compensation per share | (0.02) | (0.02) | (0.09) | (0.17) |
| &nbsp;&nbsp;&nbsp;&nbsp;Intangible amortization per share | 0.21 | 0.23 | 0.86 | 0.93 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Tax effect of intangible amortization per share | (0.03) | (0.03) | (0.12) | (0.12) |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest accretion per share | 0.12 | 0.12 | 0.24 | 0.19 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Tax effect of interest accretion per share | (0.02) | (0.01) | (0.03) | (0.02) |
| &nbsp;&nbsp;&nbsp;&nbsp;Transaction costs per share |  |  |  | 0.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Tax effect of transaction costs per share |  |  |  | (0.00) |
| &nbsp;&nbsp;&nbsp;&nbsp;Deferred tax valuation per share |  | 0.09 |  | 0.09 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Tax effect of deferred tax valuation per share |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Tax benefit distribution per share |  |  | 0.03 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Tax effect of tax benefit distribution per share |  |  | (0.00) |  |
| Adjusted Diluted EPS | $0.36 | $0.47 | $0.88 | $1.55 |

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Contact:

**Willdan Group, Inc.**

Al Kaschalk

VP Investor Relations

Tel: 310-922-5643

akaschalk@willdan.com

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