U.S. Markets open in 5 hrs 14 mins

Edited Transcript of WLDN earnings conference call or presentation 4-May-17 9:30pm GMT

Thomson Reuters StreetEvents

Q1 2017 Willdan Group Inc Earnings Call

ANAHEIM May 11, 2017 (Thomson StreetEvents) -- Edited Transcript of Willdan Group Inc earnings conference call or presentation Thursday, May 4, 2017 at 9:30:00pm GMT

TEXT version of Transcript

================================================================================

Corporate Participants

================================================================================

* Michael A. Bieber

Willdan Group, Inc. - President

* Stacy B. McLaughlin

Willdan Group, Inc. - CFO and VP

* Thomas D. Brisbin

Willdan Group, Inc. - Chairman and CEO

* Tony Rossi

Financial Profiles, Inc. - SVP

================================================================================

Conference Call Participants

================================================================================

* John Salvatore Quealy

Canaccord Genuity Limited, Research Division - MD and Analyst

* Ryan Curtis Cassil

Seaport Global Securities LLC, Research Division - Director of Flow Control and Engineering and Construction and Senior Industrials Analyst

================================================================================

Presentation

--------------------------------------------------------------------------------

Operator [1]

--------------------------------------------------------------------------------

Good day, and welcome to the Willdan Group First Quarter 2017 Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Tony Rossi of Financial Profile. Please go ahead.

--------------------------------------------------------------------------------

Tony Rossi, Financial Profiles, Inc. - SVP [2]

--------------------------------------------------------------------------------

Thank you, Elise. Good afternoon, everyone, and thank you for joining us to discuss Willdan Group's financial results for the first quarter ended March 31, 2017. With us today from management are Chairman and Chief Executive Officer, Thomas Brisbin; Chief Financial Officer, Stacy McLaughlin; and Mike Bieber, President of Willdan Group.

Management will review prepared remarks and will then open up the call to your questions. Statements made in the course of today's conference call, which are not purely historical, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The forward-looking statements involve certain risks and uncertainties, and it is important to note that the company's future results could differ materially from those in any such forward-looking statements. Factors that could cause actual results to differ materially and other risk factors are listed from time-to-time in the company's SEC reports, including, but not limited to, the Form 10-Q for the year ended December 30, 2016, and subsequent quarterly reports on Form 10-Q.

The company cautions investors not to place undue reliance on the forward-looking statements made during the course of this conference call. Willdan Group disclaims any obligation and does not undertake to update or revise any forward-looking statements made today. In addition to GAAP financial results, Willdan also provides non-GAAP financial measures that we believe enhance investors' ability to analyze our business trends and performance. Our non-GAAP measures include revenue net of subcontractor costs and EBITDA. We believe revenue net of subcontractor costs, allows us for an improved measure of the revenue derived from the work performed by our employees. EBITDA is a supplemental measure of operating performance, which removes the impact of certain nonrecurring income and expense items from our operating results. GAAP reconciliations for both of these non-GAAP measures are included at the end of the earnings release we issued today.

With that, I will now turn the call over to Chief Financial Officer, Stacy McLaughlin. Stacy?

--------------------------------------------------------------------------------

Stacy B. McLaughlin, Willdan Group, Inc. - CFO and VP [3]

--------------------------------------------------------------------------------

Thanks, Tony. I'd like to add my welcome to those joining us on today's call. I'll start with an overview of our income statement then our balance sheet and finally our guidance.

Total contract revenue for the first quarter of 2017 increased 102% to $68.4 million from $33.9 million for the first quarter of 2016. Genesys Engineering, the firm we acquired in March 2016, contributed $22 million in contract revenue for the first quarter of 2017. By segment, including both organic and acquisitive revenue, Energy Efficiency Services increased 164% to $50.1 million. Engineering Services contract revenue increased 27.7% to $14.4 million. Revenue from Public Finance Services increased 8.3% to $3.2 million and Homeland Security Services revenue decreased 9.1% to $623,000 in the quarter.

For the purposes of calculating our organic growth in the quarter, we are including the revenue generated by Genesys Engineering that exceeds the revenue recorded in the same period of the prior year. In the first quarter of 2016, Genesys generated $3.9 million in total contract revenue. The quarter-over-quarter difference of $25.6 million is used for the calculation of our organic growth, which we calculate to be 60% in the first quarter of 2017. Since the acquisition, we have won joint programs where all the revenue is being reported under the Genesys legal entity. Thus, the growth in Genesys revenue is reflective of our organic business development efforts and is counted in our organic revenue growth.

Net revenue, defined as contract revenue minus subcontractor services and other direct costs was $28.5 million, an increase of 28.3% from $22.2 million in the year-ago quarter. Direct costs of contract revenue were $50.7 million for the first quarter of 2017 compared with $20.3 million in the same period last year. Genesys Engineering accounted for $16.1 million of incremental direct cost in the first quarter of 2017. Excluding the impact of Genesys, the direct cost of contract revenue increased by approximately $14.3 million, primarily as a result of the growth in total contract revenue in the Energy Efficiency Services segment and the corresponding increase in subcontractor services and other direct costs.

Our direct costs of contract revenue were 74.2% of our total contract revenue in the first quarter of 2017, up from 68.5% in the fourth quarter of 2016. I will note that subcontractor services and other direct costs were $39.9 million or 59% of contract revenue in the quarter, up from 34% in the year-ago quarter. We expect to see some volatility in these ratios as they are a byproduct of the mix of project work that we have in any 1 particular quarter.

General and administrative expenses for the first quarter were $15.7 million compared to $11.8 million for the prior year period. As a percentage of total contract revenue, our G&A expenses were 23% compared with 34.8% in the first quarter of 2016. The improvement in this ratio was primarily driven by increased efficiencies and greater operating leverage as we scale the company.

G&A grew 33% quarter-over-quarter, while revenue grew 102% over the same time period, indicating that our back-office costs are growing at a far slower rate than revenue. That being said, we are currently seeing an increase in proposal activity for utilities, governments and commercial facilities throughout the country. This is driving higher selling expenses in the near term for programs that would potentially come online in 2018.

Operating income was $2 million for the first quarter of 2017 compared with $1.8 million generated in the first quarter of 2016. EBITDA was $3.1 million for the first quarter of 2017 compared with $2.4 million for the first quarter of 2016. EBITDA margin for the first quarter was 4.5%, down from 7.1% in the same period in the prior year, primarily due to higher pass-through revenue. As a percentage of our net revenue, our EBITDA margin was 10.8% in the first quarter compared to 10.9% in the same period last year.

We recorded an income tax benefit of $673,000 in the first quarter of 2017 compared to income tax expense of $711,000 in the same period last year. The income tax benefit recorded this quarter was the result of tax deductions related to stock option exercises pursuant to the new accounting rules that went into effect for the company in 2016. We expect our tax rate to increase in the next 3 quarters to approximately 42%. As a reminder, Congress has not yet reenacted the energy tax deductions available through 179D, which lowered the company tax rate in 2016.

Net income for the first quarter of 2017 was $2.6 million or $0.30 per diluted share compared to net income of $1.1 million or $0.13 per diluted share for the first quarter of 2016.

Turning to the balance sheet. We had $19.4 million in cash and cash equivalents at March 31, 2017 down from $22.7 million at the end of the prior quarter. The decline was attributable to negative cash flow from operations that we typically experience in the first quarter of each fiscal year, due in part to seasonally slower collections at the beginning of the year. Our rapid growth and the number of new programs we are working on also played a role in the use of cash in the first quarter.

Consistent with the seasonally slower collections in the first quarter, our DSO increased to 70 days at March 31, up from 65 days at the end of the prior quarter. As of March 31, 2017, we had approximately $1.5 million in borrowings under our revolving line of credit.

Turning to our outlook for the remainder of fiscal 2017. We are increasing our revenue guidance to range from $240 million to $250 million and our diluted earnings per share to range between $1.08 and $1.21. I’d now like turn the call over to Tom.

--------------------------------------------------------------------------------

Thomas D. Brisbin, Willdan Group, Inc. - Chairman and CEO [4]

--------------------------------------------------------------------------------

Thanks, Stacy, and good afternoon, everyone. As Stacy indicated we're off to good start in 2017 and we expect a good year. The results demonstrate that we are in good position for continued growth. Our pipeline of opportunities is growing and the type of work that we can respond to is diversifying. We are winning and executing new types of work.

For example, going way back some 50 years ago when we were doing civil engineering for cities in Southern California. 8 years ago, we started in energy efficiency. Energy efficiency now represents approximately 75% of our revenue. This energy efficiency work, originally auditing type work for Southern California utilities, has now expanded nationwide for over 30 utilities and some 50 different programs. Through our recent acquisitions, we now provide electrical and mechanical engineering. This allows us to take on a city, university or hospital's complete engineering requirements as reflected in our announcement on Lawrence, Kansas last quarter.

We can also provide energy savings guarantees to a customer, known as performance contracting. We can now handle complex mechanical and electrical systems for any building, campus or community. At Illinois Institute of Technology, we're just getting started evaluating a campus cogen facility that may be used as a distributed energy for the IIT campus microgrid, as well as a planned adjacent microgrid. Together, this would constitute a community microgrid. We were also selected for a California Energy Commission CEC grant for the air quality management board campus in Southern California. Again, we will be looking at energy efficiency, renewable, storage and generation. Two additional awards for the State of California will have us looking at similar methods to reduce energy consumption for all publicly owned facilities in the state. We are building a company to address the modernization of the grid, enabling customers to take more control over their energy requirements. We are seeking people with the very best expertise to address the energy problems utilities, commercial, industrial and public sector clients face. Technology is changing rapidly. We want our people to be the most knowledgeable as we help our customers navigate this changing energy landscape.

Our strategy is to pursue and execute on organic growth first as evidenced by the 60% growth for this quarter.

Second, we want to make strategic acquisitions that are synergistic, can grow faster as part of Willdan and keep Willdan well positioned for the rapidly evolving energy market, specifically how we get our electricity and how we use it. The pace of change will require niche acquisitions with new capabilities to keep Willdan in a leading position.

The United States is moving towards using less energy and becoming more energy independent. Customers want to spend less money, have more control. And in cases of critical infrastructure, be more resilient. Willdan is positioning for this rapidly changing landscape.

Looking ahead, as Stacy indicated, we have increased our financial targets for the year, primarily due to our outperformance in the first quarter. Based on the current volume of work and the new programs scheduled to ramp up later this year, we continue to be optimistic about our ability to deliver profitable growth in 2017. We recently received the notice to proceed on our LCR, local capacity requirement, contract with San Diego Gas & Electric. We are starting on our first project under this contract in the second quarter, which will be a nice incremental addition to 2017 before making a larger contribution next year.

As in Brooklyn-Queens, where Willdan provided 30 megawatts of targeted load reduction, the utility deferred $1 billion to $2 billion in infrastructure. Energy efficiency is only one type of distributed energy resource. Renewables, battery storage, combined heat and power are coming online throughout the National Grid and can be disruptive. Willdan is assisting utilities to overcome this problem.

Finally, I would like to say a couple of things about the shelf filing that we did a few weeks ago. While we have no immediate plans to utilize the shelf, it's a valuable tool that we thought we needed to have in place to allow us to be opportunistic in the marketplace. The acquisitions we have made over the past few years have been instrumental in our success in building shareholder value. And having the shelf filing in place, will give us the flexibility to continue to use M&A as an important component of our overall growth strategy.

With that, I would now like to turn the call back to the operator for questions.

================================================================================

Questions and Answers

--------------------------------------------------------------------------------

Operator [1]

--------------------------------------------------------------------------------

(Operator Instructions) Our first question comes from Ryan Cassil with Seaport Global.

--------------------------------------------------------------------------------

Ryan Curtis Cassil, Seaport Global Securities LLC, Research Division - Director of Flow Control and Engineering and Construction and Senior Industrials Analyst [2]

--------------------------------------------------------------------------------

I guess, maybe just like to get an update on any new projects you guys started in the first quarter? And how those are going? Just trying to understand the drivers behind the accelerated growth again, and I know there was a couple of projects teed up like San Diego Gas & Electric, et cetera, so curious if those have started? And how they're going?

--------------------------------------------------------------------------------

Thomas D. Brisbin, Willdan Group, Inc. - Chairman and CEO [3]

--------------------------------------------------------------------------------

Well, I'll add a few and Mike will add a few. The ones that I can think of, Salt Lake City, PacifiCorp, Con Edison, multifamily housing, probably, Genesys University. I would probably also look at 360, which one?

--------------------------------------------------------------------------------

Michael A. Bieber, Willdan Group, Inc. - President [4]

--------------------------------------------------------------------------------

NYCHA.

--------------------------------------------------------------------------------

Thomas D. Brisbin, Willdan Group, Inc. - Chairman and CEO [5]

--------------------------------------------------------------------------------

NYCHA, New York City Housing Authority, a lighting contract. Any other significant ones. Those are all pretty significant.

--------------------------------------------------------------------------------

Michael A. Bieber, Willdan Group, Inc. - President [6]

--------------------------------------------------------------------------------

360, Lawrence, Kansas.

--------------------------------------------------------------------------------

Thomas D. Brisbin, Willdan Group, Inc. - Chairman and CEO [7]

--------------------------------------------------------------------------------

Lawrence, Kansas got started. So although we announced those wins probably last year. They're beginning to ramp up.

--------------------------------------------------------------------------------

Ryan Curtis Cassil, Seaport Global Securities LLC, Research Division - Director of Flow Control and Engineering and Construction and Senior Industrials Analyst [8]

--------------------------------------------------------------------------------

Okay. SDG&E you didn't mention, is that one still on the come, I guess, in terms of ramping up?

--------------------------------------------------------------------------------

Thomas D. Brisbin, Willdan Group, Inc. - Chairman and CEO [9]

--------------------------------------------------------------------------------

SDG&E I did mention when I said -- maybe I didn't mention it clear enough. Let me go back. I called it the LCR contract, local capacity requirement, and that one was the one that we announced probably just about a year ago and through negotiations, the announcement said about $90 million award for, I think it was 6-years -- 5 or 6 years? 6 years. And our first project is just coming online in the second quarter of this year. So that one is just -- we signed the contract probably couple of months ago, maybe this quarter, part of this year. I called it LCR. I thought -- we said our LCR, local capacity recruitment, contract with San Diego Gas & Electric is just getting started, that was that $90 million work.

--------------------------------------------------------------------------------

Ryan Curtis Cassil, Seaport Global Securities LLC, Research Division - Director of Flow Control and Engineering and Construction and Senior Industrials Analyst [10]

--------------------------------------------------------------------------------

Okay, great. So I mean, I guess, your growth rate kind of answers my question here, but any issues sort of ramping up all of these new awards all at -- seemingly at the same time? How are you guys feeling from an infrastructure or capacity standpoint as all this work ramps?

--------------------------------------------------------------------------------

Thomas D. Brisbin, Willdan Group, Inc. - Chairman and CEO [11]

--------------------------------------------------------------------------------

We’re okay right now, so I'll say not yet. But Mike, you want to add to that?

Mike doesn't want to add to that. We're -- of course they're all difficult ramping up. We're staying on top on it, I think, better than when we were 2 years ago. Mike is doing a good job making sure that there is no operational issues and that if we're behind on targets, we meet with clients and have -- make sure we meet them within our first year of ramp up. And as of right now, everything is on schedule.

--------------------------------------------------------------------------------

Ryan Curtis Cassil, Seaport Global Securities LLC, Research Division - Director of Flow Control and Engineering and Construction and Senior Industrials Analyst [12]

--------------------------------------------------------------------------------

Okay, great. And I guess, as I look at the guidance, it -- I look at the growth rates, or the implied growth rate through the end of the year, imply things normalize. You start lapping some tougher comparisons, sure. But it seems like the business has so much momentum. Is there a bit of conservatism being applied here at this point?

--------------------------------------------------------------------------------

Thomas D. Brisbin, Willdan Group, Inc. - Chairman and CEO [13]

--------------------------------------------------------------------------------

We are early in the year. We just finished our first quarter. First quarter was outstanding. And we'll see how the year progresses. Our projects are subject to both delays and acceleration. So that's how we looked at setting guidance.

--------------------------------------------------------------------------------

Ryan Curtis Cassil, Seaport Global Securities LLC, Research Division - Director of Flow Control and Engineering and Construction and Senior Industrials Analyst [14]

--------------------------------------------------------------------------------

Sure. No, I appreciate it. And maybe just could you update us on some of the opportunities that you're seeing out there to the extent you can talk about them. I know, Stacy mentioned an increase in bidding opportunities. You guys have talked about Illinois sort of pulling their proposal, because they were increasing the scope of it so much, it had to be rebid. Could you talk about maybe that one? And are there any other new opportunities that have arisen that you might want to share with us?

--------------------------------------------------------------------------------

Thomas D. Brisbin, Willdan Group, Inc. - Chairman and CEO [15]

--------------------------------------------------------------------------------

Sure. We can go kind of across the country. There's hospitals in Texas. Illinois is still -- they haven't decided if they're going to pull back or go forward now with what they have or they might modify. So it's still moving forward. The IIT campus one is new and that gets us into the Illinois Commerce Commission approved funding for a microgrid right next to the Illinois Institute of Technology and the cogen facility we're working on willpower potentially both microgrids. And New York, New Jersey, Massachusetts all around the Northeast there are additional programs. Con Ed is coming out with new programs. What's happening a little bit in the Northeast for Con Ed is, like Brooklyn-Queens that's why I mentioned it, they are targeting new load pockets. So instead of Brooklyn-Queens they are attaching new names to them, and they are wanting to know how to reduce the amount of electricity in specific areas. And that's exactly what San Diego Gas & Electric is, how to reduce load-specific areas. We're also looking at in California, as I mentioned, the CEC grants for the air quality board. There are other CEC grants coming on microgrids that we're pursuing. We're, for the first time, looking at a federal pursuit. Can't tell you how that will turn out. That's probably -- they usually have long decision times. What have I missed Mike, anything?

--------------------------------------------------------------------------------

Michael A. Bieber, Willdan Group, Inc. - President [16]

--------------------------------------------------------------------------------

California.

--------------------------------------------------------------------------------

Thomas D. Brisbin, Willdan Group, Inc. - Chairman and CEO [17]

--------------------------------------------------------------------------------

California. California is still deciding what they want to do. We've heard June. We've heard August for an RFP. We've heard they want to do something before the end of the year. We are prepared. We are ready, our programs are still continuing. But we are looking forward to the re-compete, because as I said earlier, they're mandated to go from 20% outsourcing to 60%. So the pipeline is full -- I mean, we're writing -- I think Stacy alluded to our marketing expenses are up, and we've got many opportunities -- we're not just writing proposals, we're writing proposals we can win, so.

--------------------------------------------------------------------------------

Ryan Curtis Cassil, Seaport Global Securities LLC, Research Division - Director of Flow Control and Engineering and Construction and Senior Industrials Analyst [18]

--------------------------------------------------------------------------------

And for California, I mean, is that expected to be split across multiple players in the market? Or could you potentially win an outsized piece of that or all of that? What's the landscape look like on that front?

--------------------------------------------------------------------------------

Thomas D. Brisbin, Willdan Group, Inc. - Chairman and CEO [19]

--------------------------------------------------------------------------------

We will not win all of that. It will be split amongst multiple awards in different program. So you will look at residential, commercial, industrial, the public sector, you look at ag. They've got about, right now, 120 programs. We think they may consolidate down to 5 to 10. There is a lot of talk about that because everybody wants to keep what they had. But they are looking at consolidation. But even if they consolidate, there will be multiple winners and multiple programs, which is fine with us. I mean, they're going to grow by a factor of 3.

--------------------------------------------------------------------------------

Ryan Curtis Cassil, Seaport Global Securities LLC, Research Division - Director of Flow Control and Engineering and Construction and Senior Industrials Analyst [20]

--------------------------------------------------------------------------------

Okay, great. And you mentioned the high subcontractor cost in the quarter. Is there a way to think about that in the remainder of the year sort of a target that we can think about?

--------------------------------------------------------------------------------

Michael A. Bieber, Willdan Group, Inc. - President [21]

--------------------------------------------------------------------------------

We think it's going to hover around 50-50 for the next 2 quarters at least. It's tough to see into Q4 and Q1 of next year. But at least for the next couple of quarters probably hang around 50-50. It was up above that at 58% this quarter.

--------------------------------------------------------------------------------

Ryan Curtis Cassil, Seaport Global Securities LLC, Research Division - Director of Flow Control and Engineering and Construction and Senior Industrials Analyst [22]

--------------------------------------------------------------------------------

Okay. So normalizes a bit, but I think it's still a little up year-over-year last year, that's just mix of some of the work you guys have going on right now, I presume. Is that fair?

--------------------------------------------------------------------------------

Michael A. Bieber, Willdan Group, Inc. - President [23]

--------------------------------------------------------------------------------

That's correct.

--------------------------------------------------------------------------------

Operator [24]

--------------------------------------------------------------------------------

(Operator Instructions) Our next question comes from John Quealy from Canaccord Genuity.

--------------------------------------------------------------------------------

John Salvatore Quealy, Canaccord Genuity Limited, Research Division - MD and Analyst [25]

--------------------------------------------------------------------------------

First question in terms of the $240 million to $250 million guide on the top line, can you just remind us in terms of visibility, what's contracted and awarded in that number?

--------------------------------------------------------------------------------

Thomas D. Brisbin, Willdan Group, Inc. - Chairman and CEO [26]

--------------------------------------------------------------------------------

Practically all of it. Yes.

--------------------------------------------------------------------------------

John Salvatore Quealy, Canaccord Genuity Limited, Research Division - MD and Analyst [27]

--------------------------------------------------------------------------------

Okay. In terms of the cash flow profile. So Q1 obviously doing a lot of work and using some cash. Talk about the cash flow cadence, if you will, moving to the rest of the year with seasonality? And then a follow-on to that, folks, is dry powder. What are you thinking of with the cash on hand plus what you'll generate in obviously that you have available to draw down in terms of M&A potential?

--------------------------------------------------------------------------------

Stacy B. McLaughlin, Willdan Group, Inc. - CFO and VP [28]

--------------------------------------------------------------------------------

For cash flow operations, we've typically in the first quarter, as I mentioned, have a used in position, just with the holidays and the increase in amount of work. Additionally, we have an increase in AR and our cost and excess of billings, which help kind of bring that down. As we progress throughout the year, we go back into a positive operating situation with our cash. And that's been the case for the past, I think I have here, 4 years.

--------------------------------------------------------------------------------

John Salvatore Quealy, Canaccord Genuity Limited, Research Division - MD and Analyst [29]

--------------------------------------------------------------------------------

Yes. And Stacy any estimate our guestimate on CFO for the full year. I mean, last year was about 22-ish or something like that. And then what sort of dry powder you're thinking about in terms of size of M&A, and you look at that pipeline?

--------------------------------------------------------------------------------

Thomas D. Brisbin, Willdan Group, Inc. - Chairman and CEO [30]

--------------------------------------------------------------------------------

John, we haven't guided on free cash flow for the year, but it should be good. We're looking for cash flow that's similar to last year. We've got about $20 million in the bank right now, and we've got $35 million in borrowing capacity without expanding, plus another 25% in the accordion. We need it because we're -- $25 million in the accordion. We need it, we're looking at a number of M&A opportunities right now. And so it's likely that over the next little period of time, we'll start to run into a net debt position as we make acquisitions and use our credit facility.

--------------------------------------------------------------------------------

John Salvatore Quealy, Canaccord Genuity Limited, Research Division - MD and Analyst [31]

--------------------------------------------------------------------------------

Okay. That's helpful. And then just lastly, in terms of -- thanks for all the detail on the pipeline and potential target business. Talk about -- are you seeing any major pressures on wage inflation or subcontractor availability, talk about as you're expanding especially in energy filling out those relationships with sub-cons and how that's working for you?

--------------------------------------------------------------------------------

Thomas D. Brisbin, Willdan Group, Inc. - Chairman and CEO [32]

--------------------------------------------------------------------------------

Wages are going up, not as fast as revenue, but wages are going up, and we're able thus far to pass those along to our clients. Sometimes there is a delay in that, in that you might sign a one-year contract where you can't escalate until a certain period within a given contract year. But we're able to pass on the escalated wage costs in our contracts.

In terms of subcontractors, we are using those quite a bit as we ramp up these large contracts that Tom mentioned. We're relying heavily on subcontractors to allow us to ramp that quickly. In future years or periods, we may be able to pull some of that work in-house, once we get to a more steady run rate on some of the new contracts.

--------------------------------------------------------------------------------

Operator [33]

--------------------------------------------------------------------------------

Thank you. It appears we have no further questions at this time. I'll turn it back to management for any additional or closing remarks.

--------------------------------------------------------------------------------

Thomas D. Brisbin, Willdan Group, Inc. - Chairman and CEO [34]

--------------------------------------------------------------------------------

Okay. I'd like to thank all of you for participating on our call today and for your continued interest in Willdan. Have a great day. Thank you.

--------------------------------------------------------------------------------

Operator [35]

--------------------------------------------------------------------------------

That conclude today's conference. We appreciate your participation. You may disconnect at any time, and have a great day.