10q10k10q10k.net

What changed in Willdan Group, Inc.'s 10-K — 2024 vs 2025

vs

Paragraph-level year-over-year comparison of Willdan Group, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+181 added−191 removedSource: 10-K (2025-03-07) vs 10-K (2024-03-08)

Top changes in Willdan Group, Inc.'s 2025 10-K

181 paragraphs added · 191 removed · 143 edited across 9 sections

Item 1. Business

Business — how the company describes what it does

43 edited+9 added−32 removed98 unchanged
Biggest changeSee Part I, Item 1A, "Risk Factors" included in this Annual Report on Form 10-K for a discussion of the risks related to the loss of key personnel or our inability to attract and retain qualified personnel. 13 Table of Contents The following table sets forth the number of our employees in each of our business segments and our holding company: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal Year ​ ​ 2023 2022 2021 Energy 814 781 860 Engineering and Consulting 714 623 619 Holding Company Employees (Willdan Group, Inc.) 88 87 81 Total 1,616 1,491 1,560 ​ Diversity, Equity and Inclusion ​ Willdan has a culture of acceptance and individuality, where all employees feel respected, included, and encouraged to contribute their unique perspectives, develop innovative ideas, and bring their best skills to work each day.
Biggest changeSee Part I, Item 1A, "Risk Factors" included in this Annual Report on Form 10-K for a discussion of the risks related to the loss of key personnel or our inability to attract and retain qualified personnel.
Workplace Safety The health and safety of our employees is a core value and we continuously strive to provide a working environment that is reflective of that belief. At Willdan, our leadership embraces and supports the efforts required to drive the proactive management of risk and the elevation of our safety culture.
The health and safety of our employees is a core value and we continuously strive to provide a working environment that is reflective of that belief. At Willdan, our leadership embraces and supports the efforts required to drive the proactive management of risk and the elevation of our safety culture.
Over that time, we have saved the LADWP and its customers over half a million MWh per year and almost one hundred MW of peak demand and also provided lead generation identifying over 5,000 water efficiency upgrades. We also collaborate with Duke Energy - Progress to manage the small business direct install program in North Carolina and South Carolina.
Over that time, we have saved the LADWP and its customers over half a million MWh per year and almost one hundred MW of peak demand, and also provided lead generation identifying over 5,500 water efficiency upgrades. We also collaborate with Duke Energy - Progress to manage the small business direct install program in North Carolina and South Carolina.
We collaborate with the LADWP through the Commercial Direct Install Program, which is a small business lighting energy efficiency program that serves all commercial customers in LADWP territory with demand up to 250kW. On average, this program typically implements approximately 8,000 energy efficiency projects a year and has implemented over 103,000 projects since program inception in 2008.
We collaborate with the LADWP through the Commercial Direct Install Program, which is a small business lighting energy efficiency program that serves all commercial customers in the LADWP territory with demand up to 250kW. On average, this program typically implements approximately 8,000 energy efficiency projects a year and has implemented over 106,000 projects since program inception in 2008.
We are managed under the direction of the Board, which is currently composed of eight directors. As of the start of fiscal year 2024, the role of Chairman of the Board is separate from the role of CEO. The Board has determined that our directors, except for Mr. Bieber, our President and CEO, and Dr.
We are managed under the direction of the Board, which is currently composed of seven directors. As of the start of fiscal year 2024, the role of Chairman of the Board is separate from the role of CEO. The Board has determined that our directors, except for Mr. Bieber, our President and CEO, and Dr.
QBS requires the selection of the most technically qualified firms for a project, while the financial and legal terms of the engagement are generally secondary. 12 Table of Contents Our competition varies geographically. Although we provide services in several states, we may be stronger in certain service lines in some geographical areas than in other regions.
QBS requires the selection of the most technically qualified firms for a project, while the financial and legal terms of the engagement are generally secondary. Our competition varies geographically. Although we provide services in several states, we may be stronger in certain service lines in some geographical areas than in other regions.
Consolidated Edison has been a customer of ours since 2009. ​ In connection with our acquisition of substantially all of the assets of Genesys in March 2016, we entered into an administrative services agreement with Genesys pursuant to which our subsidiary, WES, provides Genesys with ongoing administrative, operational and other non-professional support services.
Consolidated Edison has been a customer of ours since 2009. 10 Table of Contents In connection with our acquisition of substantially all of the assets of Genesys in March 2016, we entered into an administrative services agreement with Genesys pursuant to which our subsidiary, WES, provides Genesys with ongoing administrative, operational and other non-professional support services.
For time-and-materials and fixed price contracts, we bill our clients periodically in accordance with the contract terms, based on costs incurred on either an hourly fee basis or on a percentage of completion basis or upon the achievement of certain prescribed milestones, as the project progresses.
For time-and-materials and fixed price contracts, we bill our clients periodically in accordance with the contract terms, based on costs incurred on either an hourly fee basis or on a percentage of completion basis or upon the 11 Table of Contents achievement of certain prescribed milestones, as the project progresses.
During fiscal year 2023, we had no individual customers that accounted for more than 10% of our Engineering and Consulting segment contract revenues. 4 Table of Contents For further information related to our financial reporting segments, see Part II, Item 8, Note 9, Segment and Geographical Information , of the Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K.
During fiscal year 2024, we had no individual customers that accounted for more than 10% of our Engineering and Consulting segment contract revenues. 4 Table of Contents For further information related to our financial reporting segments, see Part II, Item 8, Note 9, “ Segment and Geographical Information” , of the Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K.
The SEC maintains an Internet site that contains reports, proxy, and information statements and other information regarding our filings at http://www.sec.gov. ​ ​ 17 Table of Contents
The SEC maintains an Internet site that contains reports, proxy, and information statements and other information regarding our filings at http://www.sec.gov. ​ ​ 15 Table of Contents
At any time, shareholders and other interested parties may communicate by writing to the Board generally, with the non-employee directors as a group, or to a specific director. Intellectual Property We believe we have strong name recognition and that this provides us with a competitive advantage in obtaining new business.
At any time, shareholders and other interested parties may communicate by writing to the Board generally, with the non-employee directors as a group, or to a specific director. 14 Table of Contents Intellectual Property We believe we have strong name recognition and that this provides us with a competitive advantage in obtaining new business.
The name and logo of our proprietary 16 Table of Contents software, MuniMagic+ SM , our California energy efficiency CEDA, as well as our proprietary platform as a service VIEWPOINT are also registered marks, and we have registered a federal copyright for the source code for the MuniMagic+ SM software.
The name and logo of our proprietary software, MuniMagic+SM, our California energy efficiency CEDA, as well as our proprietary platform as a service VIEWPOINT are also registered marks, and we have registered a federal copyright for the source code for the MuniMagic+SM software.
Consequently, we believe it is important to protect our brand identity through trademark registrations. The Willdan, Willdan Group, Inc., Willdan Engineering, Willdan Energy Company, Willdan Financial Services, and Willdan Energy Solutions names are service marks of ours, and we have obtained a service mark for the Willdan and “W” logo.
Consequently, we believe it is important to protect our brand identity through trademark registrations. The Willdan, Willdan Group, Inc., Willdan Engineering, Willdan Energy Company, Willdan Financial Services, and Willdan Energy Solutions names are service marks of ours, and we have obtained service marks for “E3”, “Willdan” and our stylized “W” logo.
We administer special districts on behalf of public agencies. The types of special districts administered include community facilities districts (in California, Mello-Roos districts), assessment districts, landscape and lighting districts, school facilities improvement districts, benefit assessment districts, fire suppression districts, and business improvement districts.
We administer special districts on behalf of public agencies. The types of special districts administered include property assessed clean energy (PACE), community facilities districts (in California, Mello-Roos districts), assessment districts, landscape and lighting districts, school facilities improvement districts, benefit assessment districts, fire suppression districts, and business improvement districts.
We also provide economic and financial consulting to public agencies. Lastly, we supplement the engineering services that we offer our clients by offering expertise and support for the various financing techniques public agencies utilize to finance their operations and infrastructure. We also support the mandated reporting and other requirements associated with these financings.
Lastly, we supplement the engineering services that we offer our clients by offering expertise and support for the various financing techniques public agencies utilize to finance their operations and infrastructure. We also support the mandated reporting and other requirements associated with these financings. We provide financial advisory services for municipal securities but do not provide underwriting services.
Engineering and Consulting Services Our Engineering and Consulting segment provides civil engineering-related construction management, building and safety, city engineering office management, city planning, civil design, geotechnical, material testing and other engineering consulting services to our clients. Our engineering services include traffic, bridges, rail, port, water, mining and other civil engineering projects.
Engineering and Consulting Services Our Engineering and Consulting segment provides civil engineering-related construction management, building and safety, city engineering office management, city planning, civil design, geotechnical, material testing and other engineering consulting services to our clients. Our engineering services include traffic, bridges, rail, port, water, and other civil engineering projects. We also provide economic and financial consulting to public agencies.
As of December 29, 2023, we had approximately 2,300 open projects. During fiscal year 2023, we had no individual customers that accounted for more than 10% of our consolidated contract revenues and our top 10 customers accounted for 52.7% of our consolidated contract revenues. Our largest clients are based in California and New York.
As of December 27, 2024, we had approximately 2,500 open projects. During fiscal year 2024, we had no individual customers that accounted for more than 10% of our consolidated contract revenues and our top 10 customers accounted for 51.3% of our consolidated contract revenues. Our largest clients are based in California and New York.
We typically mitigate some of these risks through the use of fixed price subcontracts for services, material, and equipment. 11 Table of Contents The following table presents, for the periods indicated, the approximate percentage of our contract revenue subject to each type of pricing provision: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal Year ​ ​ 2023 2022 2021 Time-and-materials 19 % 20 % 24 % Unit-based 42 % 45 % 54 % Fixed price 39 % 35 % 22 % Total 100 % 100 % 100 % In relation to the pricing provisions, our service-related contracts, including operations and maintenance services and a variety of technical assistance services, are accounted for over the period of performance, in proportion to the cost of performance.
The following table presents, for the periods indicated, the approximate percentage of our contract revenue subject to each type of pricing provision: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal Year ​ ​ 2024 2023 2022 Time-and-materials 18 % 19 % 20 % Unit-based 40 % 42 % 45 % Fixed price 42 % 39 % 35 % Total 100 % 100 % 100 % In relation to the pricing provisions, our service-related contracts, including operations and maintenance services and a variety of technical assistance services, are accounted for over the period of performance, in proportion to the cost of performance.
We continue to implement programs across these four states and have completed over 30,000 projects for Duke Energy resulting in over 890,000 MWh in savings to small businesses. 10 Table of Contents We implement Consolidated Edison’s Small and Medium Business Program across the utility's New York City and Westchester County service area.
We continue to implement programs across these four states and have completed over 35,000 projects for Duke Energy resulting in over 925,000 MWh in savings to small businesses. We implement Consolidated Edison’s Small and Medium Business Program across the utility's New York City and Westchester County service area, as well as Consolidated Edison’s Multifamily program, their largest energy efficiency program.
Government Regulation, Licensing, and Enforcement A significant portion of our revenues is derived from services provided to public utilities which are generally overseen by state or local public utility commissions who provide and administer a regulatory framework governing the sourcing, distribution, pricing and general management of electricity and natural gas.
We believe our coverage limits reasonably protect us from any material adverse impact that may arise from these insured risks. 12 Table of Contents Government Regulation, Licensing, and Enforcement A significant portion of our revenues is derived from services provided to public utilities which are generally overseen by state or local public utility commissions who provide and administer a regulatory framework governing the sourcing, distribution, pricing and general management of electricity and natural gas.
An integral part of our ability to attract and retain qualified talent depends on our ability to maintain a culture reflective of the diverse communities that we serve. Our Workforce As of December 29, 2023, we employed a total of 1,616 employees, excluding contractors.
An integral part of our ability to attract and retain qualified talent depends on our ability to maintain a culture reflective of the diverse communities that we serve.
Our corporate governance practices set clear expectations and responsibilities for leaders, employees, and partners to create long-term, competitive returns for shareholders and lasting value for all stakeholders.
Governance At Willdan, strong and effective corporate governance is the foundation of a well-run, sustainable business. Our corporate governance practices set clear expectations and responsibilities for leaders, employees, and partners to create long-term, competitive returns for shareholders and lasting value for all stakeholders.
We have reviewed grading plans, street lighting and traffic signal plans, erosion control plans, storm drain plans, street improvement plans, and sewer water and utility plans. Disaster Recovery. We provide disaster recovery services to cities, counties and local government. Our experience in disaster recovery includes assisting communities in the disaster recovery process following earthquakes, firestorms, mudslides and other natural disasters.
We have reviewed grading plans, street lighting and traffic signal plans, erosion control plans, storm drain plans, street improvement plans, and sewer water and utility plans. Disaster Recovery. We provide disaster recovery services to cities, counties and local government.
In fiscal year 2023, services provided to clients in California accounted for 45.1% of our consolidated contract revenue and services provided to clients in New York accounted for 24.7% of our consolidated contract revenue.
In fiscal year 2024, services provided to clients in California accounted for 43.9% of our consolidated contract revenue, and services provided to clients in New York accounted for 23.6% of our consolidated contract revenue.
We provide planning and policy analysis for governments, regulators, and utilities, as well as innovative financing programs that bring the benefit of clean energy to underserved neighborhoods and disadvantaged customers. 15 Table of Contents We help clients reduce carbon intensity to become cleaner, more sustainable organizations through measurement and goal setting, sustainable engineering designs, installation of more efficient lighting, heating and cooling measures and the development and implementation of master plans for environmental sustainability, carbon reduction and energy efficiency to meet specific goals.
We help clients reduce carbon intensity to become cleaner, more sustainable organizations through measurement and goal setting, sustainable engineering designs, installation of more efficient lighting, heating and cooling measures and the development and implementation of master plans for environmental sustainability, carbon reduction and energy efficiency to meet specific goals.
These services are tailored to the unique needs of each municipality, ranging from staffing an entire engineering department to carrying out specific projects within a municipality. Development Review.
We provide municipalities with city engineering services related to the public works department needs and assist with the development and capital improvements implementation, and enforcement of building and development codes. These services are tailored to the unique needs of each municipality, ranging from staffing an entire engineering department to carrying out specific projects within a municipality. Development Review.
Federal Compliance. We offer several services that support bonded debt compliance reporting for cities, counties, states, school districts, water districts, housing authorities, 501(c)(3) and other municipal entities.
Federal Compliance. We offer several services that support bonded debt compliance reporting for cities, counties, states, school districts, water districts, housing authorities, 501(c)(3) and other municipal entities. We provide 8 Table of Contents federal compliance services to approximately 750 issuers in 43 states and the District of Columbia managing approximately $69 billion in municipal debt.
We provided construction management and public works inspection services for the City’s capital improvement and street maintenance programs. The projects involve building tenet improvements, landscaping, asphalt overlays, ADA compliance ramps, sidewalks, storm drains, water lines, sewer installations, underground utility improvements and other appurtenant work.
The projects involve building tenant improvements, landscaping, asphalt overlays, ADA compliance ramps, sidewalks, storm drains, water lines, sewer installations, underground utility improvements and other appurtenant work.
The following table presents the approximate percentage of our consolidated contract revenue attributable to each financial reporting segment. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal Year ​ ​ 2023 2022 2021 Energy ​ 84 % 83 % 81 % Engineering and Consulting 16 % 17 % 19 % During fiscal year 2023, we derived 22.7% of our Energy segment contract revenues from two customers, the Los Angeles Department of Water and Power (“LADWP”) and the Dormitory Authority State of New York (“DASNY”).
The following table presents the approximate percentage of our consolidated contract revenue attributable to each financial reporting segment. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal Year ​ ​ 2024 2023 2022 Energy ​ 84 % 84 % 83 % Engineering and Consulting 16 % 16 % 17 % During fiscal year 2024, we derived 10.7% of our Energy segment contract revenues from one customer, Southern California Edison.
Geotechnical. Our geotechnical and earthquake engineering services include soil engineering, earthquake and seismic hazard studies, geology and hydrogeology engineering, and construction inspection. We operate a licensed, full-service geotechnical laboratory at our headquarters in Anaheim, California, which offers an array of testing services, including construction materials testing and inspection. 7 Table of Contents Planning and Surveying.
We operate a licensed, full-service geotechnical laboratory at our headquarters in Anaheim, California, which offers an array of testing services, including construction materials testing and inspection. 7 Table of Contents Planning and Surveying. We assist communities with a full range of planning services, from the preparation of long-range policy plans to assistance with the day-to-day operations of a planning department.
Both programs help customers save energy, lower their bills and protect the environment by providing financial incentives to identify and buy down the cost of energy efficiency measures. To support this effort, we provide full-service program implementation including outreach and direct sales to potential commercial customers, on-site energy efficiency assessments, direct implementation of energy savings measures and participating contractor management.
They also provide incentives to customers who electrify their buildings and reduce their carbon footprint by installing heat pumps. To support this effort, we provide full-service program implementation including outreach and direct sales to potential commercial customers, on-site energy efficiency assessments, direct implementation of energy savings measures and participating contractor management.
In addition, to better communicate and market our safety objectives, our corporate safety council meets monthly and engages member representatives across the organization, bringing practical and timely information forward to share with our workforce. Environmental Stewardship As a leading energy solutions provider and sustainability consultant, climate change mitigation is at the core of our identity.
In addition, to better communicate and market our safety objectives, our corporate safety council meets monthly and engages member representatives across the organization, bringing practical and timely information forward to share with our workforce. Our Workforce As of December 27, 2024, we employed a total of 1,761 employees, excluding contractors.
We provide financial advisory services for municipal securities but do not provide underwriting services. In general, contracts for engineering and consulting services are awarded by public agencies based primarily upon the qualifications of the engineering or consulting professional, rather than the proposed fees.
In general, contracts for engineering and consulting services are awarded by public agencies based primarily upon the qualifications of the engineering or consulting professional, rather than the proposed fees. We have longstanding relationships with many of these agencies and are recognized as having relevant expertise and customer focused services.
Serving the two City departments was a team of full-time engineers, scientists, managers, observers/inspectors, project managers, administrative support staff, and a team of subconsultants. All work was accomplished through a task order process that defined the scope of work, time of performance, and cost of services. ● City of Long Beach, California, Engineering and Construction Management Services.
All work was accomplished through a task order process that defined the scope of work, time of performance, and cost of services. ● City of Long Beach, California, Engineering and Construction Management Services. We provided construction management and public works inspection services for the City’s capital improvement and street maintenance programs.
We have partnered with Ygrene Energy Fund to provide a national PACE program. 9 Table of Contents Clients Our clients primarily consist of investor and municipal owned energy utilities, public and governmental agencies including cities, counties, redevelopment agencies, water districts, school districts and universities, state agencies, federal agencies and a variety of other special districts and agencies.
We provide annual cost of service studies, proposed schedule of recommended rates and charges, community-specific charge calculation sheets, member outreach and public hearing presentations regarding proposed changes to water and wastewater service charges, and other related support services at the request of GLWA. 9 Table of Contents Clients Our clients primarily consist of investor and municipal owned energy utilities, public and governmental agencies including cities, counties, redevelopment agencies, water districts, school districts and universities, state agencies, federal agencies and a variety of other special districts and agencies.
Private industry and public agencies increasingly seek out cost-effective, turnkey solutions that provide innovative plans, tools, and solutions to address energy efficiency, renewable energy, water conservation and sustainability. State and local governments frequently turn to specialized resource conservation firms to help strike the balance between environmental responsibility and economic competitiveness.
State and local governments frequently turn to specialized resource conservation firms to help strike the balance between environmental responsibility and economic competitiveness.
Fire plan reviewers are assigned commercial fire protection systems and Fire Code reviews. Plan reviewers are assigned residential new construction, additions and remodels reviews. ● Contra Costa County, California, Financial Services. We provided finance review, financial analysis, and contract administration services for the Contra Costa County Public Works Department.
Fire plan reviewers are assigned commercial fire protection systems and Fire Code reviews. Plan reviewers are assigned residential new construction, additions and remodels reviews. ● City of Sherman, Texas, Financial Services .
We provided comprehensive technical support to the Public Works and Development Services Departments for the over 170,000-resident community of Elk Grove, California. Our services have included public counter service, drainage/stormwater/NPDES, traffic engineering, permitting, land development review and inspection, CIP design and construction support.
The following are examples of typical projects we have performed in the Engineering and Consulting segment: ● City of Elk Grove, California, City Engineering, Capital Improvement, and Infrastructure Services. We provided comprehensive technical support to the Public Works and Development Services Departments for the over 170,000-resident community of Elk Grove, California.
We have longstanding relationships with many of these agencies and are recognized as having relevant expertise and customer focused services. A substantial percentage of our work is for existing clients that we have served for many years. Our Engineering and Consulting services include the following: Building and Safety.
A substantial percentage of our work is for existing clients that we have served for many years. Our Engineering and Consulting services include the following: Building and Safety. Our building and safety services range from managing and staffing an entire municipal building department to providing specific outsourced services, such as plan review and field inspections for code compliance.
We typically organize and staff several local disaster recovery centers which function as “one-stop permit centers” that guarantee turn-around performance for fast-track plan checking and inspection services. Additionally, we have performed street and storm drain clean-up, replacement or repair of damaged storm drains, streets, and bridges, debris management and preparation and implementation of a near-term erosion and sediment control program.
Additionally, we have performed street and storm drain clean-up, replacement or repair of damaged storm drains, streets, and bridges, debris management and preparation and implementation of a near-term erosion and sediment control program. Geotechnical. Our geotechnical and earthquake engineering services include soil engineering, earthquake and seismic hazard studies, geology and hydrogeology engineering, and construction inspection.
Our building and safety services range from managing and staffing an entire municipal building department to providing specific outsourced services, such as plan review and field inspections for code compliance. Other related services under this umbrella include performing accessibility compliance and providing disaster recovery teams, energy compliance evaluations, permit processing and issuance, seismic retrofitting programs, and structural plan review.
Other related services under this umbrella include performing accessibility compliance and providing disaster recovery teams, energy compliance evaluations, fire and life safety, permit processing and issuance, seismic retrofitting programs, and structural plan review. Many of our building and safety services contracts are with municipalities and counties where we supplement the capacity of in-house staff. City Engineering and Code Enforcement.
We perform economic analyses and financial projects for public agencies, including fee and rate studies; utility rate analysis; utility system appraisals and asset acquisitions; economic development and redevelopment planning; Community Choice Aggregation feasibility studies, in which local entities contemplate aggregating buying power in order to secure alternative energy supply contracts; real estate and market analysis associated with planning efforts, and development fee studies; special district formation and other special projects.
We perform economic analyses and financial projects for public agencies, including fee and rate studies; utility rate analyses; utility system appraisals and asset acquisitions; economic development and redevelopment planning; development and implementation of land-based financing districts to provide revenue for public facilities and services; feasibility analyses, formation assistance, long-term financial plans, and annual district administration of Texas special districts (Public Improvement Districts, Tax Increment Reinvestment Zones, and Municipal Management Districts); real estate and market analyses associated with planning efforts; development fee studies; special district formation and other special projects.
We deliver comprehensive sustainable solutions to our clients to reduce their carbon intensity and facilitate their transition to a net-zero carbon future.
We deliver comprehensive sustainable solutions to our clients to reduce their carbon intensity and facilitate their transition to a net-zero carbon future. We provide planning and policy analysis for governments, regulators, and utilities, as well as innovative financing programs that bring the benefit of clean energy to underserved neighborhoods and disadvantaged customers.
Removed
Many of our building and safety services contracts are with municipalities and counties where we supplement the capacity of in-house staff. City Engineering and Code Enforcement. We provide municipalities with city engineering services related to the public works department needs and assist with the development, implementation and enforcement of building and development codes.
Added
In addition, the rapid growth in artificial intelligence is creating increased power demand from data centers and thus becoming a new catalyst in expanding the energy services market. Private industry and public agencies increasingly seek out cost-effective, turnkey solutions that provide innovative plans, tools, and solutions to address energy efficiency, renewable energy, water conservation and sustainability.
Removed
We assist communities with a full range of planning services, from the preparation of long-range policy plans to assistance with the day-to-day operations of a planning department.
Added
Our experience in disaster recovery includes assisting communities in the disaster recovery process following earthquakes, firestorms, hurricanes, mudslides and other natural disasters. We typically organize and staff several local disaster recovery centers which function as “one-stop permit centers” that guarantee turn-around performance for fast-track plan checking and inspection services.
Removed
We provide federal compliance services to approximately 760 issuers in 43 states and the District of Columbia managing approximately $68 billion in municipal debt. 8 Table of Contents The following are examples of typical projects we have performed in the Engineering and Consulting segment: ● City of Elk Grove, California, City Engineering, Capital Improvement, and Infrastructure Services.
Added
Our services have included public counter service, drainage/stormwater/NPDES, traffic engineering, permitting, land development review and inspection, CIP design and construction support. Serving the two City departments was a team of full-time engineers, scientists, managers, observers/inspectors, project managers, administrative support staff, and a team of subconsultants.
Removed
Willdan provided municipal services in a variety of professional and technical administrative and finance measures. ● Property Assessed Clean Energy (“PACE”). PACE is a financing mechanism that enables low-cost, long-term funding for energy efficiency, renewable energy and water conservation projects.
Added
We assist the City of Sherman with navigating the financial aspects of the largest capital projects in the city’s history to support $3 billion in private investment for chip and wafer manufacturing.
Removed
PACE financing is repaid as an assessment on the property owner’s regular tax bill, and is processed the same way as other local public benefit assessments that have been utilized for decades. Depending on local legislation, PACE can be used to pay for new heating and cooling systems, solar panels, insulation and more for commercial, nonprofit and residential properties.
Added
We completed a Water and Wastewater Utility Rate Study, and provide economic development decision support, and ongoing comparative scenario analyses, and hold briefings and alignment workshops for elected officials. ● Great Lakes Water Authority (“GLWA”), Detroit, Michigan, Financial Services. We serve as GLWA’s rate and financial consultant.
Removed
This allows property owners to implement improvements without a large up-front cash payment.
Added
After giving effect to renewals and extensions, both contracts continue through the end of 2025. These programs help customers save energy, lower their bills, and protect the environment by providing financial incentives to identify and buy down the cost of energy efficiency measures.
Removed
After giving effect to renewals and extensions, this Consolidated Edison contract continues through the end of 2025. We also implement the Consolidated Edison Multifamily program, their largest energy efficiency program. After giving effect to renewals and extensions, that contract continues through the end of 2024.
Added
We typically mitigate some of these risks through the use of fixed price subcontracts for services, material, and equipment.
Removed
We believe our coverage limits reasonably protect us from any material adverse impact that may arise from these insured risks.
Added
Willdan has a culture of acceptance, individuality, and respect, creating an environment where every employee feels included and empowered to contribute their unique perspectives, develop innovative ideas, and bring their best skills to work each day.
Removed
We value the richness that diversity and inclusion bring to our workforce and are proud that our employees represent various races, genders, ages, national origins, and points of view.
Added
The following table sets forth the number of our employees in each of our business segments and our holding company: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal Year ​ ​ 2024 2023 2022 Energy 865 814 781 Engineering and Consulting 801 714 623 Holding Company Employees (Willdan Group, Inc.) 95 88 87 Total 1,761 1,616 1,491 ​ ​ ​ 13 Table of Contents Environmental Stewardship As a leading energy solutions provider and sustainability consultant, climate change mitigation is at the core of our identity.
Removed
Our culture is focused on hiring, empowering, and retaining highly talented employees and professionals with the diverse background and expertise required to develop solutions for the current and future energy and infrastructure challenges and to help us consistently raise the bar and drive innovation forward.
Removed
To encourage more diverse and talented people to join our team, we partner with professional organizations that represent and support a diverse pool of applicants.
Removed
We actively seek out and hire minority-owned subcontractors on our projects and, in conjunction with our clients, we regularly propose and achieve specific percentage content goals for the use of minority-owned and disadvantaged businesses in our projects. These partnerships offer economic opportunity to local, minority-owned, and disadvantaged business enterprises.
Removed
At Willdan, we believe that we can better serve all communities by utilizing qualified employees, suppliers, and subcontractors that mirror the culture and demographics of the communities where we live and work. We take pride in, and celebrate, our employees. In 2020, we established Willdan’s Diversity, Equity, and Inclusion Working Group (“DEI Working Group”).
Removed
The DEI Working Group is designed to increase overall employee engagement and collaboration. Among other things, the DEI Working Group focuses on recruiting, development and community outreach, and developing and tracking progress toward DE&I objectives. The DEI Working Group is comprised of four employee-led subgroups: (i) Business Partnerships, (ii) Community Outreach and Engagement, (iii) Inclusive Culture, and (iv) Recruitment.
Removed
Each subgroup is led by a chair or co- chairpersons championing the needs and well-being of stakeholders, including employees. Collectively, the subgroups positively impact professional development, community outreach and business by creating and embracing cultural initiatives. Our employees are highly engaged in the formation of Employee Resource Groups (“ERGs”).
Removed
We believe that ERGs foster a greater sense of community while increasing employee engagement, inclusiveness, representation, and collaboration. All employees have the opportunity to initiate, join, and lead ERGs. Employee Engagement and Development Sustaining long-term growth requires continued investment in people, innovation, and new opportunities.
Removed
We continuously strive to improve upon our engagement between employees and management teams to drive our company goals and enhance the employee experience. At all locations, we provide our employees with performance assessments and evaluations and professional development opportunities including access to job specific training.
Removed
We also provide our employees with training on workplace culture and enrichment through our learning platform, which covers topics such as anti-harassment, creating healthy work environments, inclusion, ethics and compliance. To measure our human capital objectives, we continuously engage with our employees.
Removed
We provide several mechanisms for our employees to provide their feedback, including direct discussions with managers, company-wide employee surveys, and leadership meetings. We review the company-wide employee survey results and implement 14 Table of Contents action plans aimed at enhancing employee satisfaction and alignment with our overall human capital strategy.
Removed
In 2021, we began collecting additional human capital metrics, such as employee gender ratios and other demographic information, and we have expanded the roster of universities at which we conduct recruiting activities. We continue to invest in our employee development strategy by expanding our employee training and professional development programs.
Removed
In fiscal 2023, we expanded our online learning and development platform and launched a new intra-net employee communication platform. Community Training In 2020, we established and financed the Willdan Clean Energy Academy (“WCEA”), which offers free training and career services to disadvantaged workers in the New York City area.
Removed
In 2021, we increased the funding for this outreach effort, expanding WCEA to the Los Angeles City area. In 2022, WCEA celebrated 500+ graduates and achieved a 73%+ successful employment outcome rate for unemployed and under-employed students/participants. The WCEA supports a diverse workforce and collaborates with community-based organizations and workforce centers to support energy efficiency workforce development.
Removed
We recognize the important role that every employee plays in preventing work-related injuries. Training is an integral part of our Health and Safety Program and all employees receive the relevant safety training for their assigned tasks.
Removed
For those working on project sites, this includes a project-safety orientation prior to beginning work on the site, participation in weekly tailgate meetings, and additional in-depth safety training for those supervising or conducting job site observations. Safety orientations also extend to our subcontractors and visitors who must access our project sites.
Removed
We track and report all safety incidents and use metrics such as recordable case rate (“RCR”) and lost-time incident rate (“LTIR”). For context, lost-time injuries are those occurring in the workplace and resulting in an employee’s inability to work the next full workday.
Removed
A RCR describes the number of employees per 100 full-time employees that have been involved in an OSHA recordable injury or illness. The LTIR is the number of lost-time injuries that occurred in a given period, relative to the total number of hours worked in the same period.
Removed
In 2023, we launched a more robust cloud-based environmental, health, and safety (“EH&S”) platform in support of our risk management efforts. This enhanced system allows us to report incidents, document investigations, perform pre-mobilization inspections, conduct safety observations, record corrective actions, and publish dashboard management information for use in real-time.
Removed
The system also includes a learning management system module that administers a broad library of safety-related material, tracks assigned training, and verifies course completion, as well as an oversight module to monitor key requirements of our subcontractors’ safety compliance efforts. This system helps us support safe and compliant working environments.

… 4 more changes not shown on this page.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

37 edited+13 added−5 removed175 unchanged
Biggest changeWhile we have implemented security measures designed to protect against cyber security breaches, there can be no assurance that these measures will be effective. We take steps designed to detect, mitigate, and remediate vulnerabilities in our information systems (such as our hardware and/or software, including that of third parties upon which we rely).
Biggest changeWe take steps designed to detect, mitigate, and remediate vulnerabilities in our information systems (such as our hardware and/or software, including that of third parties with whom we work). We may not, however, detect and remediate all such vulnerabilities including on a timely basis.
We could experience cost overruns if these estimates were initially inaccurate as a result of errors or ambiguities in the contract specifications, or become inaccurate as a result of a change in circumstances following the submission of the estimate due to, among other things, unanticipated technical or equipment problems, difficulties in obtaining permits or approvals, changes in local laws or labor conditions, weather delays, changes in costs of raw materials as a result of rising inflation, supply chain shortages or otherwise, or the inability of our vendors or subcontractors to perform their obligations.
We could experience cost overruns if these estimates were initially inaccurate as a result of errors or ambiguities in the contract specifications, or become inaccurate as a result of a change in circumstances following the submission of the estimate due to, among other things, unanticipated technical or equipment problems, difficulties in obtaining permits or approvals, changes in local laws or labor conditions, weather delays, changes in costs of raw materials as a result of elevated inflation, supply chain shortages or otherwise, or the inability of our vendors or subcontractors to perform their obligations.
A change in the individuals responsible for selecting consultants for and awarding contracts on behalf of a public agency (for example, due to an election) could adversely affect our ability to retain an existing contract with or obtain additional contracts from such public agency. 26 Table of Contents If our business partners fail to perform their contractual obligations on a project, we could be exposed to legal liability, loss of reputation and profit reduction or loss on the project.
A change in the individuals responsible for selecting consultants for and awarding contracts on behalf of a public agency (for example, due to an election) could adversely affect our ability to retain an existing contract with or obtain additional contracts from such public agency. 24 Table of Contents If our business partners fail to perform their contractual obligations on a project, we could be exposed to legal liability, loss of reputation and profit reduction or loss on the project.
Our failure to comply (or perceived failure to comply) with these obligations could result in costly enforcement actions (including regulatory proceedings, investigations, fines, penalties, audits, and inspections), litigation (including class action claims) or mass arbitration demands, penalties and fines, require us to change our business practices or cause business interruptions, and may lead to liabilities and other harms. 31 Table of Contents ​ ITEM 1B.
Our failure to comply (or perceived failure to comply) with these obligations could result in costly enforcement actions (including regulatory proceedings, investigations, fines, penalties, audits, and inspections), litigation (including class action claims) or mass arbitration demands, penalties and fines, require us to change our business practices or cause business interruptions, and may lead to liabilities and other harms. 29 Table of Contents ITEM 1B.
If economic growth slows, including as a result of rising inflation and rising interest rates, government fiscal conditions worsen, or client spending declines, it may have a material adverse effect on our business, results of operations and financial condition. Our government clients may face budget deficits that prohibit them from funding new or existing projects.
If economic growth slows, including as a result of elevated inflation and interest rates, government fiscal conditions worsen, or client spending declines, it may have a material adverse effect on our business, results of operations and financial condition. Our government clients may face budget deficits that prohibit them from funding new or existing projects.
The goodwill impairment test requires us to determine the fair value of our reporting units, which are the components at or 28 Table of Contents one level below our reportable segments. In determining fair value, we make significant judgments and estimates, including assumptions about our strategic plans with regard to our operations.
The goodwill impairment test requires us to determine the fair value of our reporting units, which are the components at or 26 Table of Contents one level below our reportable segments. In determining fair value, we make significant judgments and estimates, including assumptions about our strategic plans with regard to our operations.
If a project is significant, or if there are one or more common issues that impact multiple projects, costs overruns could increase the unpredictability of our earnings, as well as have a material adverse impact on our business, results of operations and financial condition. ​ Under our time-and-material contracts, we are generally paid for our efforts at negotiated hourly billing rates for our staff, plus reimbursement for subcontractors and other direct costs.
If a project is significant, or if there are one or more common issues that impact multiple projects, costs overruns could increase the unpredictability of our earnings, as well as have a material adverse impact on our business, results of operations and financial condition. ​ 16 Table of Contents Under our time-and-material contracts, we are generally paid for our efforts at negotiated hourly billing rates for our staff, plus reimbursement for subcontractors and other direct costs.
These conditions, combined with tightening labor markets resulting from elevated resignation rates among U.S. workers, could increase the cost and difficulty of recruiting and retaining employees, or could result in project delays or cancellations which could negatively impact our operations and financial results. ​ Our profitability could suffer if we are not able to maintain adequate utilization of our workforce.
These conditions, combined with tightening labor markets resulting from elevated resignation rates among U.S. workers, could increase the cost and difficulty of recruiting and retaining 18 Table of Contents employees, or could result in project delays or cancellations which could negatively impact our operations and financial results. ​ Our profitability could suffer if we are not able to maintain adequate utilization of our workforce.
If a client determines not to proceed with the completion of the project or if the client defaults on its payment obligations, we may face difficulties in collecting payment of amounts due to us for the costs previously incurred or for the amounts previously expended to purchase equipment or supplies. ​ 20 Table of Contents Our use of the percentage-of-completion method of revenue recognition on our fixed price contracts could result in a reduction or reversal of previously recorded revenue and profits.
If a client determines not to proceed with the completion of the project or if the client defaults on its payment obligations, we may face difficulties in collecting payment of amounts due to us for the costs previously incurred or for the amounts previously expended to purchase equipment or supplies. ​ Our use of the percentage-of-completion method of revenue recognition on our fixed price contracts could result in a reduction or reversal of previously recorded revenue and profits.
If we fail to conduct due diligence on our potential targets effectively, we may, for example, not identify problems at target companies, or fail to recognize 27 Table of Contents incompatibilities or other obstacles to successful integration.
If we fail to conduct due diligence on our potential targets effectively, we may, for example, not identify problems at target companies, or fail to recognize 25 Table of Contents incompatibilities or other obstacles to successful integration.
Since our internal controls are subject to inherent limitations, including human error, it is possible that these controls could be intentionally circumvented or become inadequate because of changed conditions. As a result, we cannot assure that our controls will protect us from reckless or criminal acts committed by our employees or agents.
Since our internal controls are subject to inherent limitations, including human error, it is possible that these controls could be intentionally circumvented or become inadequate because of changed conditions. As a result, we 20 Table of Contents cannot assure that our controls will protect us from reckless or criminal acts committed by our employees or agents.
Changes in federal, state and local tax laws and regulations could adversely affect our business, results of operations and financial condition. 25 Table of Contents Because we primarily provide services to municipalities, public utilities and other public agencies, we are more susceptible to the unique risks associated with government contracts. We primarily work for utilities, municipalities and other public agencies.
Changes in federal, state and local tax laws and regulations could adversely affect our business, results of operations and financial condition. Because we primarily provide services to municipalities, public utilities and other public agencies, we are more susceptible to the unique risks associated with government contracts. We primarily work for utilities, municipalities and other public agencies.
Those regulatory mandates, including mandates for greenhouse gas reductions, the composition of energy generation sources, the amount of energy consumption reductions, 18 Table of Contents the cost effectiveness of those reductions and the various terms under which those mandates are to be delivered set firm boundaries within which the utilities may contract with third parties such as Willdan.
Those regulatory mandates, including mandates for greenhouse gas reductions, the composition of energy generation sources, the amount of energy consumption reductions, the cost effectiveness of those reductions and the various terms under which those mandates are to be delivered set firm boundaries within which the utilities may contract with third parties such as Willdan.
If our cash flows and capital resources are insufficient to fund our debt service obligations, we could face substantial liquidity problems and could be forced to reduce or delay investments and capital expenditures or to dispose of material assets or operations, seek additional debt or equity capital or restructure or refinance our indebtedness.
If our cash flows and capital resources are insufficient to fund our debt service obligations, we could face substantial liquidity problems and could be forced to reduce or delay investments and capital expenditures or to dispose of material assets or operations, 21 Table of Contents seek additional debt or equity capital or restructure or refinance our indebtedness.
Our 22 Table of Contents failure to comply with applicable laws or regulations, or acts of misconduct could subject us to fines and penalties, loss of security clearances, and suspension or debarment from contracting, any or all of which could harm our reputation, reduce our revenue and profits, and subject us to criminal and civil enforcement actions.
Our failure to comply with applicable laws or regulations, or acts of misconduct could subject us to fines and penalties, loss of security clearances, and suspension or debarment from contracting, any or all of which could harm our reputation, reduce our revenue and profits, and subject us to criminal and civil enforcement actions.
In addition, performance of projects can be affected by a number of factors beyond our control, including, among other things, unavoidable delays from government inaction, public opposition, inability to obtain financing, weather conditions, unavailability of vendor materials (including but not limited to import restrictions or pandemics or other public health emergencies such as the Covid-19 pandemic), changes in the project scope of services requested by our clients, industrial accidents, environmental hazards, and labor disruptions.
In addition, performance of projects can be affected by a number of factors beyond our control, including, among other things, unavoidable delays from government inaction, public opposition, inability to obtain financing, weather conditions, unavailability of vendor materials (including but not limited to import restrictions or pandemics or other public health emergencies), changes in the project scope of services requested by our clients, industrial accidents, environmental hazards, and labor disruptions.
Further, we face exposure to personal injury claims in the event that an individual is injured because of 21 Table of Contents our negligence or the negligence of one of our subcontractors. Moreover, we may not have adequate resources in the event of a successful claim against us.
Further, we face exposure to personal injury claims in the event that an individual is injured because of our negligence or the negligence of one of our subcontractors. Moreover, we may not have adequate resources in the event of a successful claim against us.
Accordingly, a relaxation or repeal of these laws and regulations, or changes in governmental policies regarding the funding, implementation or enforcement of these programs, could result in a decline in demand for our services, which could in turn negatively impact our revenue.
Accordingly, a relaxation or repeal of these laws and regulations, or changes in governmental policies regarding the funding, implementation or enforcement 27 Table of Contents of these programs, could result in a decline in demand for our services, which could in turn negatively impact our revenue.
Those changes could have the effect of making our utility contracts more or less profitable and increase or decrease the demand for our services. ​ Demand for our services is cyclical and vulnerable to economic downturns.
Those changes could have the effect of making our utility contracts more or less profitable and increase or decrease the demand for our services. ​ 17 Table of Contents Demand for our services is cyclical and vulnerable to economic downturns.
Cybersecurity attacks in particular are evolving, and we and the third parties upon which we rely face the constant risk of cybersecurity threats, including, among other things, computer viruses, malicious code, attacks by computer hackers, organized cyber-attacks, ransomware attacks, and other electronic security breaches that could lead to disruptions in critical systems, unauthorized, unlawful, or accidental acquisition, modification, destruction, loss, encryption, access to, release or other compromise of confidential or sensitive information.
Cybersecurity attacks in particular are evolving, and we and the third parties with whom we work face the constant risk of cybersecurity threats, including, among other things, computer viruses, malicious code, attacks by computer hackers, organized cyber-attacks, ransomware attacks, and other electronic security breaches that could lead to disruptions in critical systems, unauthorized, unlawful, or accidental acquisition, modification, destruction, loss, encryption, access to, release or other compromise of confidential or sensitive information.
We may not be able to effect any such 23 Table of Contents alternative measures, if necessary, on commercially reasonable terms or at all and, even if successful, those alternative actions may not allow us to meet our scheduled debt service obligations.
We may not be able to effect any such alternative measures, if necessary, on commercially reasonable terms or at all and, even if successful, those alternative actions may not allow us to meet our scheduled debt service obligations.
Certain organizations that provide corporate governance and other corporate risk information to investors and shareholders have developed, and others may in the future develop, scores and ratings to evaluate 29 Table of Contents companies and investment funds based upon ESG or “sustainability” metrics.
Certain organizations that provide corporate governance and other corporate risk information to investors and shareholders have developed, and others may in the future develop, scores and ratings to evaluate companies and investment funds based upon ESG or “sustainability” metrics.
We had no goodwill impairment in fiscal years 2023, 2022, or 2021.
We had no goodwill impairment in fiscal years 2024, 2023, or 2022.
We may not, however, detect and remediate all such vulnerabilities including on a timely basis. Further, we may experience delays in developing and deploying remedial measures and patches designed to address identified vulnerabilities. Vulnerabilities could be exploited and result in a cyber security breach or other interruption.
Further, we may experience delays in developing and deploying remedial measures and patches designed to address identified vulnerabilities. Vulnerabilities could be exploited and result in a cyber security breach or other interruption.
The global economy has been experiencing supply chain constraints and labor shortages. These conditions, in addition to rising inflation, have increased the costs for materials, other goods, and labor, and have caused delivery and project performance schedules to be extended.
Supply chain constraints and labor shortages could negatively impact our business, financial condition and results of operations. The global economy has been experiencing supply chain constraints and labor shortages. These conditions, in addition to elevated inflation, have increased the costs for materials, other goods, and labor, and have caused delivery and project performance schedules to be extended.
Our future revenue and growth prospects could be adversely affected if other contractors eliminate or reduce their subcontracts or teaming arrangement relationships with us, or if a government agency terminates or reduces these other contractors’ programs, does not award them new contracts, or refuses to pay under a contract. 19 Table of Contents Supply chain constraints and labor shortages could negatively impact our business, financial condition and results of operations.
Our future revenue and growth prospects could be adversely affected if other contractors eliminate or reduce their subcontracts or teaming arrangement relationships with us, or if a government agency terminates or reduces these other contractors’ programs, does not award them new contracts, or refuses to pay under a contract.
We face exposure to product liability and personal injury claims in the event that our services cause bodily injury or property damage. Since the majority of our products use electricity, it is possible that the products we use could result in property damage or personal injury, whether due to product malfunctions, defects, improper installation or other causes.
Since the majority of our products use electricity, it is possible that the products we use could result in property damage or personal injury, whether due to product malfunctions, defects, improper installation 19 Table of Contents or other causes.
We may also face reputational damage in the event our corporate responsibility initiatives, objectives, reporting, or disclosure controls, including with respect matters such as to board diversity and climate change, do not meet the expectations of our investors, shareholders, lawmakers, listing exchange or other constituencies, or if we are unable to achieve an acceptable ESG or sustainability rating from third party rating services.
We may face reputational damage in the event our corporate responsibility initiatives, objectives, reporting, or disclosure controls, including with respect matters such as to board diversity and climate change, do not meet the expectations of our investors, shareholders, lawmakers, listing exchange or other constituencies, In addition, we may communicate ESG goals or initiatives from time to time, which can be costly to achieve and difficult to implement.
The loss of key utility programs or key clients (or financial difficulties at this utility program or these clients, which result in nonpayment or nonperformance) could have a significant and adverse effect on our business, results of 24 Table of Contents operations and financial condition.
Such funding is subject to periodic renewal and is outside our control or its contract counterparty and may, at times, be delayed or inhibited. 22 Table of Contents The loss of key utility programs or key clients (or financial difficulties at this utility program or these clients, which result in nonpayment or nonperformance) could have a significant and adverse effect on our business, results of operations and financial condition.
Cyber security breaches or other systems and information technology interruptions could result in liability, harm our reputation and impact our ability to operate. We rely on computer, information, and communications technology and systems to operate. We store and process large amounts of confidential information concerning our employees, customers, contractors, and vendors.
We rely on computer, information, and communications technology and systems to operate. We store and process large amounts of confidential and other sensitive information concerning our employees, customers, contractors, and vendors.
These laws and regulations affect how we do business with our clients and, in some instances, impose additional costs on our business operations. Although we take precautions to prevent and deter fraud, misconduct, and non-compliance, we face the risk that our employees or outside partners may engage in misconduct, fraud, or other improper activities.
Although we take precautions to prevent and deter fraud, misconduct, and non-compliance, we face the risk that our employees or outside partners may engage in misconduct, fraud, or other improper activities.
While we have historically made reasonably reliable estimates of the progress towards completion of long-term contracts, the uncertainties inherent in the estimating process make it possible for actual costs to vary materially from initial estimates, which could result in reductions or reversals of previously recorded revenue and profit. ​ The loss of key personnel or our inability to attract and retain qualified personnel could impair our ability to provide services to our clients and otherwise conduct our business effectively.
While we have historically made reasonably reliable estimates of the progress towards completion of long-term contracts, the uncertainties inherent in the estimating process make it possible for actual costs to vary materially from initial estimates, which could result in reductions or reversals of previously recorded revenue and profit. ​ Our revenues are primarily derived from the energy services industry and, therefore, we are highly susceptible to risks relating to such industry.
The existence of the foregoing provisions and anti-takeover measures could limit the price that investors might be willing to pay in the future for shares of our common stock. They could also deter potential acquirers of our company, thereby potentially reducing the likelihood that our stockholders could receive a premium for their common stock in an acquisition.
The existence of the foregoing provisions and anti-takeover measures could limit the price that investors might be willing to pay in the future for shares of our common stock.
We also rely in part on third-party software and information technology vendors to run certain parts of our information technology systems and our business. If our third-party service providers experience a cyber security breach or other interruption, we could experience adverse consequences. 30 Table of Contents In the ordinary course of business, we have been targeted by malicious cyber-attacks.
If the third parties with whom we work with experience a cyber security breach or other interruption, we could experience material adverse consequences. In the ordinary course of business, we have been and may be in the future be targeted by malicious cyber-attacks.
If we over-utilize our workforce, our employees may become disengaged, which could impact employee attrition. If we under-utilize our workforce, our profit margin and profitability could suffer. If we are unable to accurately estimate and control our contract costs, then we may incur losses on our contracts, which could decrease our operating margins and reduce our profits.
Failure to meet performance standards or complete performance on a timely basis could also adversely affect our reputation and client base. If we are unable to accurately estimate and control our contract costs, then we may incur losses on our contracts, which could decrease our operating margins and reduce our profits.
If we experience system interruptions and delays from cybersecurity attacks or otherwise, it could suspend or stop our operations, and could have a material adverse effect on our business, results of operations and financial condition, and could negatively impact our clients.
If we or the third parties with whom we work experience or are perceived to experience cybersecurity attacks or otherwise, we could experience material adverse consequences, such as suspending or stopping our operations, government enforcement actions, additional reporting requirements, litigation, and other harms, which could have a material adverse effect on our business, results of operations and financial condition, and could negatively impact our clients.
Corporate responsibility, specifically related to environmental, social and governance (“ESG”) matters, may impose additional costs and expose us to new risks. Public ESG and sustainability reporting is becoming more broadly expected by investors, shareholders, and other stakeholders.
Corporate responsibility, specifically related to environmental, social and governance (“ESG”) matters, may impose additional costs and expose us to new risks. Companies across various industries are facing increasing scrutiny related to their environmental, social and governance (ESG) practices and reporting, both in the United States and internationally.
Removed
Failure to meet performance standards or complete performance on a timely basis could also adversely affect our reputation and client base. ​ Our revenues are primarily derived from the energy services industry and, therefore, we are highly susceptible to risks relating to such industry.
Added
If we over-utilize our workforce, our employees may become disengaged, which could impact employee attrition. If we under-utilize our workforce, our profit margin and profitability could suffer. ​ The loss of key personnel or our inability to attract and retain qualified personnel could impair our ability to provide services to our clients and otherwise conduct our business effectively.
Removed
Such funding is subject to periodic renewal and is outside our control or its contract counterparty and may, at times, be delayed or inhibited.
Added
We face exposure to product liability and personal injury claims in the event that our services cause bodily injury or property damage.
Removed
In addition, investors, particularly institutional investors, use these scores to benchmark companies against their peers and if a company is perceived as lagging, these investors may engage with such company to improve ESG disclosure or performance and may also make voting decisions, or take other actions, to hold these companies and their boards of directors accountable.
Added
Tax reform remains a legislative priority for the U.S. government and certain legislations have already been enacted. While there is current uncertainty regarding what changes will eventually be enacted, such new laws may affect our operating 23 Table of Contents results and financial conditions.
Removed
A low ESG or sustainability rating by a third-party rating service could also result in the exclusion of our common stock from consideration by certain investors who may elect to invest with our competition instead.
Added
For example, as a government contractor, we maintain plans to ensure compliance with nondiscrimination and regulatory requirements for qualified employees on the basis of gender, race, disability, and veteran status. Consequently, we may be subject to executive orders and regulatory changes affecting various aspects of our operations, including compliance with nondiscrimination plans.
Removed
Ongoing focus on corporate responsibility matters by investors and other parties as described above, as well as disclosure regulations, may impose additional costs or expose us to new risks.
Added
Any required elimination or modification of such plans in response to new executive orders could pose challenges in hiring or retaining employees, and may lead to other adverse operational impacts. Laws and regulations applicable to us as a government contractor affect how we do business with our clients and, in some instances, impose additional costs on our business operations.
Added
There is no assurance that we will achieve any of these goals, that our initiatives will achieve their intended outcome, and our ability to implement these ESG-related initiatives or achieve ESG-related goals may be dependent on external factors outside our control.
Added
Further, we may experience backlash from customers, government entities, advocacy groups, employees, or other stakeholders who disagree with our actual or perceived positions, or with our lack of position on social, environmental, governance, political, public policy, economic, geopolitical, or other sensitive issues.
Added
Any perceived lack of transparency about these matters could harm our brand and reputation, our employees’ engagement and retention, and the willingness of our customers and partners to do business with us.
Added
They could also deter potential acquirers of our company, thereby potentially reducing the likelihood that our stockholders could receive a premium for their common stock in an acquisition. 28 Table of Contents Cyber security breaches or other systems and information technology interruptions could result in liability, harm our reputation, impact our ability to operate, and other material adverse consequences.
Added
We also rely in part on third-party software and information technology vendors to run certain parts of our information technology systems and our business, and our ability to monitor these third parties’ information security practices is limited. These third parties may not have adequate information security measures in place.
Added
In particular, severe ransomware attacks are becoming increasingly prevalent and can lead to material adverse consequences. While we have implemented security measures designed to protect against cyber security breaches, there can be no assurance that these measures will be effective.
Added
Any of the previously identified or similar threats could cause a cyber security breach or other interruption that could result in unauthorized, unlawful, or accidental acquisition, modification, destruction, loss, alteration, encryption, disclosure of, or access to our confidential or sensitive information or our information technology systems, or those of the third parties with whom we work.
Added
For example, we have been the target of unsuccessful phishing attempts in the past, and expect such attempts will continue in the future.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

5 edited+0 added−0 removed12 unchanged
Biggest changeThe Company performs due diligence before engaging with certain third-party service providers designed to evaluate the service providers’ cybersecurity practices, including their security policies, incident response capabilities, and data protection measures (as evidenced by third party certifications including ISO 27001 and SOC II reports); including specific cybersecurity requirements in contracts with certain third-party service providers, such as regarding security standards, data protection, and incident reporting as applicable; and monitoring and auditing certain third-party service providers’ cybersecurity practices and compliance with contractual obligations.
Biggest changeThe Company performs due diligence before engaging with certain third-party service providers designed to evaluate the service providers’ cybersecurity practices, including their security policies, incident response capabilities, and data protection measures; including specific cybersecurity requirements in contracts with certain third-party service providers, such as regarding security standards, data protection, and incident reporting as applicable; and monitoring and auditing certain third-party service providers’ cybersecurity practices and compliance with contractual obligations.
Our cybersecurity team has decades-long experience in cybersecurity and holds industry-standard certifications including Certified Information Systems Security Professional (“CISSP”), Certified Cloud Security Professional (“CCSP”), among others. ​ Management is responsible for hiring appropriate personnel, helping to integrate cybersecurity risk considerations into the Company’s overall risk management strategy, and communicating key priorities to relevant personnel.
Our cybersecurity team has decades-long experience in cybersecurity and holds industry-standard certifications including Certified Information Systems Security Professional (“CISSP”), and Certified Cloud Security Professional (“CCSP”), among others. ​ Management is responsible for hiring appropriate personnel, helping to integrate cybersecurity risk considerations into the Company’s overall risk management strategy, and communicating key priorities to relevant personnel.
Risk Factors in this Annual Report on Form 10-K, Cyber security breaches or other systems and information technology interruptions could result in liability, harm our reputation and impact our ability to operate . ​ The Company engages third-party cybersecurity consultants and auditors who help the cybersecurity team in identifying, assessing, and managing material risks from cybersecurity threats, including by evaluating and enhancing the Company’s cybersecurity posture.
Risk Factors in this Annual Report on Form 10-K, Cyber security breaches or other systems and information technology interruptions could result in liability, harm our reputation, impact our ability to operate, and other material adverse consequences . ​ The Company engages third-party cybersecurity consultants and auditors who help the cybersecurity team in identifying, assessing, and managing material risks from cybersecurity threats, including by evaluating and enhancing the Company’s cybersecurity posture.
Depending on the nature of the services provided, the sensitivity of the information systems and data at issue, and the identity of the provider, the Company’s vendor management process may involve different levels of assessment designed to help 32 Table of Contents identify cybersecurity risks associated with a provider and impose contractual obligations related to cybersecurity on the provider. ​ Governance ​ The Board addresses the Company’s cybersecurity risk management as part of its general oversight function.
Depending on the nature of the services provided, the sensitivity of the information systems and data at issue, and the identity of the provider, the Company’s vendor management process may involve different 30 Table of Contents levels of assessment designed to help identify cybersecurity risks associated with a provider and impose contractual obligations related to cybersecurity on the provider. ​ Governance ​ The Board addresses the Company’s cybersecurity risk management as part of its general oversight function.
These updates cover topics that include cybersecurity team member updates, cybersecurity infrastructure updates, improvement in cyber-security tools and technologies, cybersecurity framework compliance, cyber-risk hardware/software enhancement updates, cybersecurity threats and mitigation measures, and more. The Board also has access to various reports, summaries or presentations related to cybersecurity threats, risk and mitigation.
These updates cover topics that include cybersecurity team member updates, cybersecurity infrastructure updates, improvement in cyber-security tools and technologies, cybersecurity framework compliance, cyber-risk hardware/software enhancement updates, cybersecurity threats and mitigation measures, and more. The Board also has access to various reports, summaries or presentations related to cybersecurity threats, risk and mitigation. ​ ​ ​ 31 Table of Contents

Item 2. Properties

Properties — owned and leased real estate

2 edited+0 added−0 removed1 unchanged
Biggest changeIn addition to the U.S. locations, we also have one office in Canada and one office in the Commonwealth of Puerto Rico. In total, our facilities contain approximately 243,000 square feet of office space and are subject to leases that expire through 2029. We rent a small portion of this total space on a month-to-month basis.
Biggest changeIn addition to the U.S. locations, we also have one office in Canada and one office in the Commonwealth of Puerto Rico. In total, our facilities contain approximately 240,000 square feet of office space and are subject to leases that expire through 2029. We rent a small portion of this total space on a month-to-month basis.
ITEM 2. PROPERTIES Our corporate headquarters is located at 2401 East Katella Avenue, Anaheim, California, where we lease approximately 18,000 square feet of office space. In addition, we lease office space in 44 other locations nationwide, principally in California and New York.
ITEM 2. PROPERTIES Our corporate headquarters is located at 2401 East Katella Avenue, Anaheim, California, where we lease approximately 18,000 square feet of office space. In addition, we lease office space in 49 other locations nationwide, principally in California and New York.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

2 edited+0 added−0 removed6 unchanged
Biggest changeIn accordance with accounting standards regarding loss contingencies, we accrue an undiscounted liability for those contingencies where the incurrence of a loss is probable and the amount can be reasonably estimated, and we 33 Table of Contents disclose the amount accrued and an estimate of any reasonably possible loss in excess of the amount accrued, if such disclosure is necessary for our financial statements not to be misleading.
Biggest changeIn accordance with accounting standards regarding loss contingencies, we accrue an undiscounted liability for those contingencies where the incurrence of a loss is probable and the amount can be reasonably estimated, and we disclose the amount accrued and an estimate of any reasonably possible loss in excess of the amount accrued, if such disclosure is necessary for our financial statements not to be misleading.
However, in the opinion of our management, after consulting with legal counsel, and taking into account insurance coverage, the ultimate liability related to current outstanding claims and lawsuits is not expected to have a material adverse effect on our financial statements. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. ​ 34 Table of Contents PART II
However, in the opinion of our management, after consulting with legal counsel, and taking into account insurance coverage, the ultimate liability related to current outstanding claims and lawsuits is not expected to have a material adverse effect on our financial statements. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. ​ 32 Table of Contents PART II

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

2 edited+0 added−0 removed0 unchanged
Biggest changeITEM 4. MINE SAFETY DISCLOSURES 34 ​ PART II ​ ITEM 5. MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES 35 ITEM 6. RESERVED 37 ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 38 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 54 ITEM 8.
Biggest changeITEM 4. MINE SAFETY DISCLOSURES 32 ​ PART II ​ ITEM 5. MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES 33 ITEM 6. RESERVED 35 ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 36 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 52 ITEM 8.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 55 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE 103 ITEM 9A. CONTROLS AND PROCEDURES 103
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 53 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE 102 ITEM 9A. CONTROLS AND PROCEDURES 102

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

5 edited+2 added−0 removed6 unchanged
Biggest changeThe stock price performance shown in the graph is not necessarily indicative of future stock price performance. 35 Table of Contents Recent Sales of Unregistered Securities None. Issuer Repurchases of Equity Securities None. ​ 36 Table of Contents
Biggest changeThe stock price performance shown in the graph is not necessarily indicative of future stock price performance. 33 Table of Contents ​ Recent Sales of Unregistered Securities None.
The customized peer group consists of American Superconductor Corporation, Atlas Technical Consultants, Inc., Bowman Consulting Group Ltd., C3.ai, Inc., Charah Solutions, Inc., Exponent, Inc., FTC Solar, Inc., ICF International, Inc., Limbach Holdings, Inc., Montrose Environmental Group, Inc., NV5 Global, Inc., Orion Energy Systems, Inc., RCM Technologies, Inc., Resource Connection, Inc., and Stem, Inc.
The old peer group consisted of American Superconductor Corporation, Atlas Technical Consultants, Inc., Bowman Consulting Group Ltd., C3.ai, Inc., Charah Solutions, Inc., Exponent, Inc., FTC Solar, Inc., ICF International, Inc., Limbach Holdings, Inc., Montrose Environmental Group, Inc., NV5 Global, Inc., Orion Energy Systems, Inc., RCM Technologies, Inc., Resource Connection, Inc., and Stem, Inc.
Stockholders As of March 6, 2024, there were 171 stockholders of record of our common stock. This number does not include persons who hold our common stock in nominee or “street name” accounts through brokers or banks. Dividends We did not declare or pay cash dividends on our common stock in fiscal years 2023, 2022, or 2021.
Stockholders As of March 5, 2025, there were 190 stockholders of record of our common stock. This number does not include persons who hold our common stock in nominee or “street name” accounts through brokers or banks. Dividends We did not declare or pay cash dividends on our common stock in fiscal years 2024, 2023, or 2022.
An investment of $100, with reinvestment of all dividends, is assumed to have been made in our common stock, in the peer group, and in the Nasdaq Composite on December 28, 2018, and the relative performance of each is tracked through and including December 29, 2023.
An investment of $100, with reinvestment of all dividends, is assumed to have been made in our common stock, in the peer group, and in the Nasdaq Composite on December 27, 2019, and the relative performance of each is tracked through and including December 27, 2024.
The peer group investment is weighted by market capitalization as of December 28, 2018 and is adjusted monthly.
The peer group investment is weighted by market capitalization as of December 27, 2019 and is adjusted monthly.
Added
The customized peer group consists of American Superconductor Corporation, Ameresco, Inc., Bowman Consulting Group Ltd., C3.ai, Inc., Exponent, Inc., ICF International, Inc., Iteris, Inc., Limbach Holdings, Inc., LSI Industries Inc., Montrose Environmental Group, Inc., NV5 Global, Inc., Quest Resource Holding Corporation, RCM Technologies, Inc., Resource Connection, Inc., and Stem, Inc.
Added
Issuer Repurchases of Equity Securities During the fiscal quarter ended December 27, 2024, we made the following repurchases of shares of our common stock from employees to satisfy tax withholding obligations incurred in connection with the vesting of restricted stock: ​ ​ ​ ​ ​ ​ Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Number (or Approximate Dollar Value) of Shares That May Yet be Purchased Under the Plans or Programs September 28, 2024 – October 25, 2024 — — — — October 26, 2024 – November 22, 2024 3,519 $47.31 — — November 23, 2024 – December 27, 2024 — — — — TOTAL 3,519 $47.31 — — ​ ​ ​ 34 Table of Contents

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

43 edited+14 added−11 removed129 unchanged
Biggest changeWe provide financial advisory services for municipal securities but do not provide underwriting services. ​ 38 Table of Contents Results of Operations Summary Comparison of 2023, 2022, and 2021 The following table sets forth, for the periods indicated, certain information derived from our consolidated statements of comprehensive income (1) : ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal Year ​ ​ 2023 ​ 2022 ​ 2021 ​ ​ (in thousands, except percentages) Contract revenue ​ $ 510,095 ​ 100.0 % ​ $ 429,138 ​ 100.0 % ​ $ 353,755 ​ 100.0 % Direct costs of contract revenue: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Salaries and wages ​ ​ 89,915 ​ 17.6 ​ ​ ​ 82,972 ​ 19.3 ​ ​ ​ 65,648 ​ 18.6 ​ Subcontractor services and other direct costs ​ ​ 240,413 ​ 47.1 ​ ​ ​ 202,587 ​ 47.2 ​ ​ ​ 152,233 ​ 43.0 ​ Total direct costs of contract revenue ​ ​ 330,328 ​ 64.8 ​ ​ ​ 285,559 ​ 66.5 ​ ​ ​ 217,881 ​ 61.6 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross profit ​ ​ 179,767 ​ 35.2 ​ ​ ​ 143,579 ​ 33.5 ​ ​ ​ 135,874 ​ 38.4 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ General and administrative expenses: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Salaries and wages, payroll taxes and employee benefits ​ ​ 95,556 ​ 18.7 ​ ​ ​ 81,801 ​ 19.1 ​ ​ ​ 73,812 ​ 20.9 ​ Facilities and facilities related ​ ​ 9,565 ​ 1.9 ​ ​ ​ 9,287 ​ 2.2 ​ ​ ​ 9,896 ​ 2.8 ​ Stock-based compensation ​ ​ 5,323 ​ 1.0 ​ ​ ​ 8,373 ​ 2.0 ​ ​ ​ 16,563 ​ 4.7 ​ Depreciation and amortization ​ ​ 16,431 ​ 3.2 ​ ​ ​ 17,489 ​ 4.1 ​ ​ ​ 17,146 ​ 4.8 ​ Other ​ ​ 30,818 ​ 6.0 ​ ​ ​ 33,692 ​ 7.9 ​ ​ ​ 27,148 ​ 7.7 ​ Total general and administrative expenses ​ ​ 157,693 ​ 30.9 ​ ​ ​ 150,642 ​ 35.1 ​ ​ ​ 144,565 ​ 40.9 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income (loss) from operations ​ ​ 22,074 ​ 4.3 ​ ​ ​ (7,063) ​ (1.6) ​ ​ ​ (8,691) ​ (2.5) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other income (expense): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest expense ​ ​ (9,413) ​ (1.8) ​ ​ ​ (5,328) ​ (1.2) ​ ​ ​ (3,869) ​ (1.1) ​ Other, net ​ ​ 1,930 ​ 0.4 ​ ​ ​ 939 ​ 0.2 ​ ​ ​ 156 ​ 0.0 ​ Total other income (expense) ​ ​ (7,483) ​ (1.5) ​ ​ ​ (4,389) ​ (1.0) ​ ​ ​ (3,713) ​ (1.0) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income (Loss) before income tax expense ​ ​ 14,591 ​ 2.9 ​ ​ ​ (11,452) ​ (2.7) ​ ​ ​ (12,404) ​ (3.5) ​ Income tax expense (benefit) ​ ​ 3,665 ​ 0.7 ​ ​ ​ (3,004) ​ (0.7) ​ ​ ​ (3,987) ​ (1.1) ​ Net income (loss) ​ $ 10,926 ​ 2.1 ​ ​ $ (8,448) ​ (2.0) ​ ​ $ (8,417) ​ (2.4) ​ ​ (1) Percentages are expressed as a percentage of contract revenue and may not total due to rounding. ​ 39 Table of Contents The following tables provides information about disaggregated revenue of our two segments, Energy and Engineering and Consulting by contract type, client type, and geographical region: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2023 ​ Energy Engineering and Consulting Total ​ (in thousands) Contract Type ​ ​ ​ ​ ​ ​ ​ ​ ​ Time-and-materials ​ $ 35,582 ​ $ 63,530 ​ $ 99,112 Unit-based ​ ​ 199,040 ​ ​ 15,753 ​ ​ 214,793 Fixed price ​ ​ 192,354 ​ ​ 3,836 ​ ​ 196,190 Total (1) ​ $ 426,976 ​ $ 83,119 ​ $ 510,095 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Client Type ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial ​ $ 31,162 ​ $ 5,866 ​ $ 37,028 Government ​ ​ 159,935 ​ ​ 76,972 ​ ​ 236,907 Utilities (2) ​ ​ 235,879 ​ ​ 281 ​ ​ 236,160 Total (1) ​ $ 426,976 ​ $ 83,119 ​ $ 510,095 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Geography (3) ​ ​ ​ ​ ​ ​ ​ ​ ​ Domestic ​ $ 426,976 ​ $ 83,119 ​ $ 510,095 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2022 ​ Energy Engineering and Consulting Total ​ (in thousands) Contract Type ​ ​ ​ ​ ​ ​ ​ ​ ​ Time-and-materials ​ $ 32,491 ​ $ 53,584 ​ $ 86,075 Unit-based ​ ​ 180,509 ​ ​ 14,296 ​ ​ 194,805 Fixed price ​ ​ 144,460 ​ ​ 3,798 ​ ​ 148,258 Total (1) ​ $ 357,460 ​ $ 71,678 ​ $ 429,138 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Client Type ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial ​ $ 29,782 ​ $ 5,566 ​ $ 35,348 Government ​ ​ 126,494 ​ ​ 65,969 ​ ​ 192,463 Utilities (2) ​ ​ 201,184 ​ ​ 143 ​ ​ 201,327 Total (1) ​ $ 357,460 ​ $ 71,678 ​ $ 429,138 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Geography (3) ​ ​ ​ ​ ​ ​ ​ ​ ​ Domestic ​ $ 357,460 ​ $ 71,678 ​ $ 429,138 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2021 ​ Energy Engineering and Consulting Total ​ (in thousands) Contract Type ​ ​ ​ ​ ​ ​ ​ ​ ​ Time-and-materials ​ $ 34,004 ​ $ 52,209 ​ $ 86,213 Unit-based ​ ​ 180,311 ​ ​ 10,688 ​ ​ 190,999 Fixed price ​ ​ 72,069 ​ ​ 4,474 ​ ​ 76,543 Total (1) ​ $ 286,384 ​ $ 67,371 ​ $ 353,755 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Client Type ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial ​ $ 24,541 ​ $ 5,323 ​ $ 29,864 Government ​ ​ 65,249 ​ ​ 61,899 ​ ​ 127,148 Utilities (2) ​ ​ 196,594 ​ ​ 149 ​ ​ 196,743 Total (1) ​ $ 286,384 ​ $ 67,371 ​ $ 353,755 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Geography (3) ​ ​ ​ ​ ​ ​ ​ ​ ​ Domestic ​ $ 286,384 ​ $ 67,371 ​ $ 353,755 ​ (1) Amounts may not add to the totals due to rounding.
Biggest changeWe provide financial advisory services for municipal securities but do not provide underwriting services. ​ 36 Table of Contents Results of Operations Summary Comparison of 2024, 2023, and 2022 The following table sets forth, for the periods indicated, certain information derived from our consolidated statements of comprehensive income (1) : ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal Year ​ ​ 2024 ​ 2023 ​ 2022 ​ ​ (in thousands, except percentages) Contract revenue ​ $ 565,798 ​ 100.0 % ​ $ 510,095 ​ 100.0 % ​ $ 429,138 ​ 100.0 % Direct costs of contract revenue: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Salaries and wages ​ ​ 93,543 ​ 16.5 ​ ​ ​ 89,915 ​ 17.6 ​ ​ ​ 82,972 ​ 19.3 ​ Subcontractor services and other direct costs ​ ​ 269,473 ​ 47.6 ​ ​ ​ 240,413 ​ 47.1 ​ ​ ​ 202,587 ​ 47.2 ​ Total direct costs of contract revenue ​ ​ 363,016 ​ 64.2 ​ ​ ​ 330,328 ​ 64.8 ​ ​ ​ 285,559 ​ 66.5 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross profit ​ ​ 202,782 ​ 35.8 ​ ​ ​ 179,767 ​ 35.2 ​ ​ ​ 143,579 ​ 33.5 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ General and administrative expenses: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Salaries and wages, payroll taxes and employee benefits ​ ​ 105,373 ​ 18.6 ​ ​ ​ 95,556 ​ 18.7 ​ ​ ​ 81,801 ​ 19.1 ​ Facilities and facilities related ​ ​ 9,718 ​ 1.7 ​ ​ ​ 9,565 ​ 1.9 ​ ​ ​ 9,287 ​ 2.2 ​ Stock-based compensation ​ ​ 7,388 ​ 1.3 ​ ​ ​ 5,323 ​ 1.0 ​ ​ ​ 8,373 ​ 2.0 ​ Depreciation and amortization ​ ​ 14,745 ​ 2.6 ​ ​ ​ 16,431 ​ 3.2 ​ ​ ​ 17,489 ​ 4.1 ​ Other ​ ​ 34,205 ​ 6.0 ​ ​ ​ 30,818 ​ 6.0 ​ ​ ​ 33,692 ​ 7.9 ​ Total general and administrative expenses ​ ​ 171,429 ​ 30.3 ​ ​ ​ 157,693 ​ 30.9 ​ ​ ​ 150,642 ​ 35.1 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income (loss) from operations ​ ​ 31,353 ​ 5.5 ​ ​ ​ 22,074 ​ 4.3 ​ ​ ​ (7,063) ​ (1.6) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other income (expense): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest expense ​ ​ (7,801) ​ (1.4) ​ ​ ​ (9,413) ​ (1.8) ​ ​ ​ (5,328) ​ (1.2) ​ Other, net ​ ​ 3,127 ​ 0.6 ​ ​ ​ 1,930 ​ 0.4 ​ ​ ​ 939 ​ 0.2 ​ Total other income (expense) ​ ​ (4,674) ​ (0.8) ​ ​ ​ (7,483) ​ (1.5) ​ ​ ​ (4,389) ​ (1.0) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income (Loss) before income tax expense ​ ​ 26,679 ​ 4.7 ​ ​ ​ 14,591 ​ 2.9 ​ ​ ​ (11,452) ​ (2.7) ​ Income tax expense (benefit) ​ ​ 4,109 ​ 0.7 ​ ​ ​ 3,665 ​ 0.7 ​ ​ ​ (3,004) ​ (0.7) ​ Net income (loss) ​ $ 22,570 ​ 4.0 ​ ​ $ 10,926 ​ 2.1 ​ ​ $ (8,448) ​ (2.0) ​ ​ (1) Percentages are expressed as a percentage of contract revenue and may not total due to rounding. ​ 37 Table of Contents The following tables provides information about disaggregated revenue of our two segments, Energy and Engineering and Consulting by contract type, client type, and geographical region: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2024 ​ Energy Engineering and Consulting Total ​ (in thousands) Contract Type ​ ​ ​ ​ ​ ​ ​ ​ ​ Time-and-materials ​ $ 34,381 ​ $ 67,931 ​ $ 102,312 Unit-based ​ ​ 205,117 ​ ​ 19,676 ​ ​ 224,793 Fixed price ​ ​ 233,811 ​ ​ 4,882 ​ ​ 238,693 Total (1) ​ $ 473,309 ​ $ 92,489 ​ $ 565,798 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Client Type ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial ​ $ 34,072 ​ $ 7,548 ​ $ 41,620 Government ​ ​ 182,079 ​ ​ 84,695 ​ ​ 266,774 Utilities (2) ​ ​ 257,158 ​ ​ 246 ​ ​ 257,404 Total (1) ​ $ 473,309 ​ $ 92,489 ​ $ 565,798 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Geography (3) ​ ​ ​ ​ ​ ​ ​ ​ ​ Domestic ​ $ 473,309 ​ $ 92,489 ​ $ 565,798 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2023 ​ Energy Engineering and Consulting Total ​ (in thousands) Contract Type ​ ​ ​ ​ ​ ​ ​ ​ ​ Time-and-materials ​ $ 35,582 ​ $ 63,530 ​ $ 99,112 Unit-based ​ ​ 199,040 ​ ​ 15,753 ​ ​ 214,793 Fixed price ​ ​ 192,354 ​ ​ 3,836 ​ ​ 196,190 Total (1) ​ $ 426,976 ​ $ 83,119 ​ $ 510,095 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Client Type ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial ​ $ 31,162 ​ $ 5,866 ​ $ 37,028 Government ​ ​ 159,935 ​ ​ 76,972 ​ ​ 236,907 Utilities (2) ​ ​ 235,879 ​ ​ 281 ​ ​ 236,160 Total (1) ​ $ 426,976 ​ $ 83,119 ​ $ 510,095 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Geography (3) ​ ​ ​ ​ ​ ​ ​ ​ ​ Domestic ​ $ 426,976 ​ $ 83,119 ​ $ 510,095 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2022 ​ Energy Engineering and Consulting Total ​ (in thousands) Contract Type ​ ​ ​ ​ ​ ​ ​ ​ ​ Time-and-materials ​ $ 32,491 ​ $ 53,584 ​ $ 86,075 Unit-based ​ ​ 180,509 ​ ​ 14,296 ​ ​ 194,805 Fixed price ​ ​ 144,460 ​ ​ 3,798 ​ ​ 148,258 Total (1) ​ $ 357,460 ​ $ 71,678 ​ $ 429,138 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Client Type ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial ​ $ 29,782 ​ $ 5,566 ​ $ 35,348 Government ​ ​ 126,494 ​ ​ 65,969 ​ ​ 192,463 Utilities (2) ​ ​ 201,184 ​ ​ 143 ​ ​ 201,327 Total (1) ​ $ 357,460 ​ $ 71,678 ​ $ 429,138 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Geography (3) ​ ​ ​ ​ ​ ​ ​ ​ ​ Domestic ​ $ 357,460 ​ $ 71,678 ​ $ 429,138 ​ (1) Amounts may not add to the totals due to rounding.
Outstanding Indebtedness See Part II, Item 8, Note 5, “ Debt Obligations ”, of the Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K for information regarding our indebtedness, including information about new borrowings and repayments, principal repayment terms, interest rates, covenants, and other key terms of our outstanding indebtedness. 45 Table of Contents Insurance Premiums We have also financed, from time to time, insurance premiums by entering into unsecured notes payable with insurance companies.
Outstanding Indebtedness See Part II, Item 8, Note 5, “ Debt Obligations ”, of the Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K for information regarding our indebtedness, including information about new borrowings and repayments, principal repayment terms, interest rates, covenants, and other key terms of our outstanding indebtedness. 43 Table of Contents Insurance Premiums We have also financed, from time to time, insurance premiums by entering into unsecured notes payable with insurance companies.
Recent Accounting Standards ​ For a description of recently issued and adopted accounting pronouncements, including adoption dates and expected effects on our results of operations and financial condition, see Part II, Item 8, Note 2, “ Recent Accounting Pronouncements ”, of the Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K. ​ 53 Table of Contents
Recent Accounting Standards ​ For a description of recently issued and adopted accounting pronouncements, including adoption dates and expected effects on our results of operations and financial condition, see Part II, Item 8, Note 2, “ Recent Accounting Pronouncements ”, of the Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K. ​ 51 Table of Contents
Billings do not necessarily correlate with revenue recognized using the percentage-of-completion method of revenue recognition. 50 Table of Contents Accounts receivable are carried at original invoice amount less an estimate made for doubtful accounts based upon our review of all outstanding amounts on a quarterly basis.
Billings do not necessarily correlate with revenue recognized using the percentage-of-completion method of revenue recognition. 48 Table of Contents Accounts receivable are carried at original invoice amount less an estimate made for doubtful accounts based upon our review of all outstanding amounts on a quarterly basis.
Any reduction in the estimated fair value of our Energy segment could result in an impairment charge of goodwill associated with this segment in future periods. 51 Table of Contents Business Combinations The acquisition method of accounting for business combinations requires us to use significant estimates and assumptions, including fair value estimates, as of the business combination date.
Any reduction in the estimated fair value of our Energy segment could result in an impairment charge of goodwill associated with this segment in future periods. 49 Table of Contents Business Combinations The acquisition method of accounting for business combinations requires us to use significant estimates and assumptions, including fair value estimates, as of the business combination date.
We expense general and administrative costs when incurred. 47 Table of Contents Critical Accounting Policies This discussion and analysis of financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles in the U.S. (“GAAP”).
We expense general and administrative costs when incurred. 45 Table of Contents Critical Accounting Policies This discussion and analysis of financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles in the U.S. (“GAAP”).
We do not consider these types of warranties to be separate performance obligations. 49 Table of Contents In some cases, we have a master service or blanket agreement with a customer under which each task order releases us to perform specific portions of the overall scope in the service contract.
We do not consider these types of warranties to be separate performance obligations. 47 Table of Contents In some cases, we have a master service or blanket agreement with a customer under which each task order releases us to perform specific portions of the overall scope in the service contract.
In addition, the percentage-of-completion method is a common method of revenue recognition in our industry. 48 Table of Contents Many of our fixed price contracts involve a high degree of subcontracted fixed price effort and are relatively short in duration, thereby lowering the risks of not properly estimating the percent complete.
In addition, the percentage-of-completion method is a common method of revenue recognition in our industry. 46 Table of Contents Many of our fixed price contracts involve a high degree of subcontracted fixed price effort and are relatively short in duration, thereby lowering the risks of not properly estimating the percent complete.
If these non-finalized changes qualify as a contract modification, a determination is made whether to account for the change in contract value as a modification to the 46 Table of Contents existing contract, or a separate contract and revenue under the claims or change orders is recognized accordingly.
If these non-finalized changes qualify as a contract modification, a determination is made whether to account for the change in contract value as a modification to the 44 Table of Contents existing contract, or a separate contract and revenue under the claims or change orders is recognized accordingly.
The increase in total other expense, net is primarily due to higher interest expense as a 41 Table of Contents result of the increase in market interest rates which directly affected our variable interest rates under our credit facilities, combined with a one-time charge of $0.5 million for unamortized debt issuance costs related to our prior credit facilities, partially offset by interest income related to bank deposits.
The increase in total other expense, net is primarily due to higher interest expense as a result of the increase in market interest rates which directly affected our variable interest rates under our Credit Facilities, combined with a one-time charge of $0.5 million for unamortized debt issuance costs related to our prior credit facilities, partially offset by interest income related to bank deposits.
For acquired business entities, if we identify changes to acquired deferred tax asset valuation allowances or liabilities related to uncertain tax positions during the measurement period and they relate to new information obtained about facts and circumstances that existed as of the acquisition date, those changes are considered a measurement period adjustment and we record the offset to goodwill.
For acquired business entities, if we identify changes to acquired deferred tax asset valuation allowances or liabilities related to uncertain tax positions during the measurement period and they relate to new information obtained 50 Table of Contents about facts and circumstances that existed as of the acquisition date, those changes are considered a measurement period adjustment and we record the offset to goodwill.
Because these funds are held in trust for pass through to the utility’s customers and have no impact on our working capital or operating cash flows, these cash receipts are presented in the consolidated statement of 44 Table of Contents cash flows as financing cash inflows, “Receipt of restricted cash”, with the subsequent payments classified as financing cash outflows, “Payment of restricted cash”.
Because these funds are held in trust for pass through to the utility’s customers and have no impact on our working capital or operating cash flows, these cash receipts are presented in the consolidated statement of cash flows as financing cash inflows, “Receipt of restricted cash”, with the subsequent payments classified as financing cash outflows, “Payment of restricted cash”.
We did not recognize any goodwill impairment charges in fiscal years 2023, 2022, or 2021. We test our goodwill for impairment at the level of our reporting units, which are components of our operating segments.
We did not recognize any goodwill impairment charges in fiscal years 2024, 2023, or 2022. We test our goodwill for impairment at the level of our reporting units, which are components of our operating segments.
The decrease in stock-based compensation expenses was primarily related to previously awarded stock grants reaching the end of their corresponding vesting periods, partially offset by new equity awards being issued at lower stock prices.
The decrease in stock-based compensation expenses was primarily related to previously awarded stock grants reaching the 40 Table of Contents end of their corresponding vesting periods, partially offset by new equity awards being issued at lower stock prices.
We have, however, an administrative services agreement with Genesys in which we provide Genesys with ongoing administrative, operational and other non-professional support services. We manage Genesys and have the power to direct the activities that most significantly impact Genesys’ performance, in addition to being obligated to absorb expected losses from Genesys.
We have, however, an administrative services agreement with Genesys in which we provide Genesys with ongoing administrative, operational and other non-professional support services. We manage Genesys and have the power to direct the activities 42 Table of Contents that most significantly impact Genesys’ performance, in addition to being obligated to absorb expected losses from Genesys.
(2) Includes the portion of revenue related to small business programs paid by the end user/customer. (3) Revenue from our foreign operations were not material for fiscal years 2023, 2022 and 2021. ​ 40 Table of Contents Fiscal Year 2023 Compared to Fiscal Year 2022 Contract revenue.
(2) Includes the portion of revenue related to small business programs paid by the end user/customer. (3) Revenue from our foreign operations were not material for fiscal years 2024, 2023, and 2022. ​ 38 Table of Contents Fiscal Year 2024 Compared to Fiscal Year 2023 Contract revenue.
Cash Flows from Financing Activities Cash flows used in financing activities were $23.8 million for fiscal year 2023 compared to cash flows provided by financing activities of $8.4 million for fiscal year 2022 and cash flows used in financing activities of $18.5 million in fiscal year 2021.
Cash Flows from Financing Activities Cash flows used in financing activities were $5.6 million and $23.8 million for fiscal years 2024 and 2023, respectively, compared to cash flows provided by financing activities of $8.4 million for fiscal year 2022.
Liquidity and Capital Resources ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal Year ​ ​ ​ 2023 ​ ​ 2022 ​ ​ 2021 ​ ​ (in thousands) Net cash provided by (used in): ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating activities ​ $ 39,214 ​ $ 9,433 ​ $ 9,804 Investing activities ​ ​ (11,457) ​ ​ (9,527) ​ ​ (8,454) Financing activities ​ ​ (23,845) ​ ​ 8,358 ​ ​ (18,534) Net increase (decrease) in cash and cash equivalents ​ $ 3,912 ​ $ 8,264 ​ $ (17,184) ​ Sources of Cash Our primary sources of liquidity for the next 12 months and beyond are cash generated from operations, cash and cash equivalents, and available borrowings under our revolving credit facility under the Credit Agreement (the “Revolving Credit Facility”).
Liquidity and Capital Resources ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal Year ​ ​ ​ 2024 ​ ​ 2023 ​ ​ 2022 ​ ​ (in thousands) Net cash provided by (used in): ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating activities ​ $ 72,073 ​ $ 39,214 ​ $ 9,433 Investing activities ​ ​ (15,743) ​ ​ (11,457) ​ ​ (9,527) Financing activities ​ ​ (5,569) ​ ​ (23,845) ​ ​ 8,358 Net increase (decrease) in cash and cash equivalents ​ $ 50,761 ​ $ 3,912 ​ $ 8,264 ​ Sources of Cash Our primary sources of liquidity for the next 12 months and beyond are cash generated from operations, cash and cash equivalents, and available borrowings under our revolving credit facility under the Credit Agreement (the “Revolving Credit Facility”).
Contract revenue in our Engineering and Consulting segment increased $4.3 million, or 6.4%, in fiscal year 2022 compared to fiscal year 2021, primarily due to increased demand for services provided to our governmental clients. Direct costs of contract revenue.
Contract revenue in our Engineering and Consulting segment increased $9.4 million, or 11.3%, in fiscal year 2024 compared to fiscal year 2023, primarily due to increased demand for services provided to our clients. Direct costs of contract revenue.
The increase in net income was primarily attributable to the increase in revenue and gross profit, partially offset by higher interest expense and income tax expense. Fiscal Year 2022 Compared to Fiscal Year 2021 Contract revenue.
The increase in net income was primarily attributable to the increase in revenue and gross profit, partially offset by higher interest expense and income tax expense.
As of 43 Table of Contents December 29, 2023, we had a fully drawn $100 million term loan with $98.1 million outstanding (the “Term Loan”), and a $50.0 million Revolving Credit Facility with no borrowed amounts and $4.1 million in letters of credit issued, each scheduled to mature on September 29, 2026.
As of December 27, 2024, we had a fully drawn $100 million term loan with $90.0 million outstanding (the “Term Loan”, and collectively with the Revolving Credit Facility, the “Credit Facilities”), and a $50.0 million Revolving Credit Facility with no borrowed amounts and $1.6 million in letters of credit issued, each scheduled to mature on September 29, 2026.
Cash Flows from Investing Activities Cash flows used in investing activities were $11.5 million, $9.5 million, and $8.5 million for fiscal years 2023, 2022, and 2021, respectively. Cash flows used in investing activities for fiscal years 2023, 2022, and 2021 were primarily due to cash paid for the development of software and the purchase of computers and other equipment.
Cash flows used in investing activities for fiscal years 2023, and 2022 were primarily due to cash paid for the development of proprietary software and the purchase of computers and other equipment.
Within G&A expenses, the increase of $8.0 million in salaries and wages, payroll taxes and employee benefits combined with the increase of $6.5 million in other general and administrative expenses was partially offset by a decrease of $8.2 million in stock-based compensation and a decrease of $0.6 million in facilities and facility related expenses.
Within G&A expenses, the increase of $9.8 million in salaries and wages, payroll taxes and employee benefits, combined with the increase of $3.4 million in other general and administrative expenses, and the increase of $2.1 million in stock-based compensation was partially offset by a decrease of $1.7 million in depreciation and amortization.
We recognize interest and penalties related to unrecognized tax benefits in income tax expense. 52 Table of Contents For further discussion of our income taxes, see Part II, Item 8, Note 11, “ Income Taxes ” of the Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K.
For further discussion of our income taxes, see Part II, Item 8, Note 11, “ Income Taxes ” of the Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K.
Cash Flows from Operating Activities Cash flows provided by operating activities were $39.2 million, $9.4 million, and $9.8 million for fiscal years 2023, 2022, and 2021, respectively. Cash flows from operating activities primarily consists of net income, adjusted for non-cash charges, such as depreciation and amortization and stock-based compensation, plus or minus changes in current operating assets and liabilities.
Cash flows from operating activities primarily consists of net income, adjusted for non-cash charges, such as depreciation and amortization and stock-based compensation, plus or minus changes in current operating assets and liabilities.
See Part II, Item 8, Note 5, “ Debt Obligations” , of the Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K, for information regarding our indebtedness, including information about new borrowings and repayments, principal repayment terms, interest rates, covenants, and other key terms of our outstanding indebtedness.
See Part II, Item 8, Note 5, “ Debt Obligations” , of the Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K, for information regarding our indebtedness, including information about new borrowings and repayments, principal repayment terms, interest rates, covenants, and other key terms of our outstanding indebtedness. 41 Table of Contents Cash Flows from Operating Activities Cash flows provided by operating activities were $72.1 million, $39.2 million, and $9.4 million for fiscal years 2024, 2023, and 2022, respectively.
As of December 29, 2023, 19% of our contracts are time-and-materials contracts, 42% are unit-based contracts, and 39% are fixed price contracts, compared to 20% for time-and-materials contracts, 45% for unit-based contracts, and 35% for fixed price contract s, as of December 30, 2022.
As of December 27, 2024, 18% of our contracts are time-and-materials contracts, 40% are unit-based contracts, and 42% are fixed price contracts, compared to 19% for time-and-materials contracts, 42% for unit-based contracts, and 39% for fixed price contracts, as of December 29, 2023.
The tax benefit is measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement.
The tax benefit is measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. We recognize interest and penalties related to unrecognized tax benefits in income tax expense.
Cash flows used in financing activities for fiscal year 2021 were primarily attributable to principal repayments of $13.0 million under our Term A Loan and Revolving Credit Facility, increases of $6.6 million for contingent consideration related to prior acquisitions, payments of taxes on stock grants of $3.1 million, payments on notes payable of $1.9 million, partially offset by $2.7 million in proceeds from sales of common stock under our employee stock purchase plan and $1.9 million in proceeds from stock option exercise.
Cash flows used in financing activities for fiscal year 2024 were primarily attributable to the repayments of $8.1 million under our Term Loan, $1.4 million principal payments on finance leases, and $1.4 million cash used to pay withholding taxes on stock grants, partially offset by $2.8 million of proceeds from sales of common stock under employee stock purchase plan and $2.8 million in proceeds from stock option exercises.
The increase in salaries and wages, payroll taxes and employee benefits was primarily due to increases in personnel. The increase in other general and administrative expenses was primarily due to increased contingent consideration expense related to prior acquisitions, higher computer-related expenses and higher professional service fees.
The increase in salaries and wages, payroll taxes and employee benefits was primarily due to an increase in incentive compensation, consistent with the improvement in operating profit, and higher fringe benefit costs, combined with increases in employee headcount. The increase in other general and administrative expenses was primarily due to increased professional service fees and computer-related expenses.
As of December 29, 2023, we were in compliance with the covenants contained in the Credit Agreement and borrowings under our Credit Facilities, exclusive of the effects of upfront fees, undrawn fees and issuance cost amortization, bore interest at an annual rate of 8.5%.
As of December 27, 2024, unhedged b orrowings under our Credit Facilities, exclusive of the effects of upfront fees, undrawn fees and issuance cost amortization, bore interest at an annual rate of 6.4%.
Direct costs of contract revenue in our Energy segment increased $67.3 million, or 36.5%, in fiscal year 2022 compared to fiscal year 2021, primarily as a result of the reasons described above. Direct costs of contract revenue for the Engineering and Consulting segment increased $0.4 million, or 1.2%, for the fiscal year 2022 compared to fiscal year 2021.
Direct costs of contract revenue in our Energy segment increased $30.2 million, or 10.4%, in fiscal year 2024 compared to fiscal year 2023. Direct costs of contract revenue in our Engineering and Consulting segment increased $2.5 million, or 6.4%, in fiscal year 2024 compared to fiscal year 2023.
Contractual Obligations The following table sets forth our known contractual obligations as of December 29, 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Less than ​ ​ ​ ​ More than Contractual Obligations ​ Total ​ 1 Year ​ 1 - 3 Years ​ 3 - 5 Years ​ 5 Years ​ ​ (in thousands) ​ Debt (1) ​ $ 97,431 ​ $ 8,452 ​ $ 88,979 ​ $ — ​ $ — ​ Interest payments on debt outstanding (2) ​ ​ 19,946 ​ ​ 7,976 ​ ​ 11,970 ​ ​ — ​ ​ — ​ Operating leases ​ 14,295 ​ 4,537 ​ 7,189 ​ 2,465 ​ 104 ​ Finance leases ​ 2,370 ​ 1,186 ​ 1,074 ​ 110 ​ — ​ Total contractual cash obligations ​ $ 134,042 ​ $ 22,151 ​ $ 109,212 ​ $ 2,575 ​ $ 104 ​ (1) Debt includes $98.1million outstanding on our Term Loan, net of issuance costs, and no borrowed amounts outstanding on our Revolving Credit Facility as of December 29, 2023.
Contractual Obligations The following table sets forth our known contractual obligations as of December 27, 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Less than ​ ​ ​ ​ More than Contractual Obligations ​ Total ​ 1 Year ​ 1 - 3 Years ​ 3 - 5 Years ​ 5 Years ​ ​ (in thousands) ​ Debt (1) ​ $ 89,487 ​ $ 10,137 ​ $ 79,350 ​ $ — ​ $ — ​ Interest payments on debt outstanding (2) ​ ​ 9,114 ​ ​ 5,452 ​ ​ 3,662 ​ ​ — ​ ​ — ​ Operating leases ​ 15,743 ​ 5,804 ​ 7,727 ​ 2,212 ​ — ​ Finance leases ​ 2,517 ​ 1,138 ​ 1,263 ​ 116 ​ — ​ Total contractual cash obligations ​ $ 116,861 ​ $ 22,531 ​ $ 92,002 ​ $ 2,328 ​ $ — ​ (1) Debt includes $89.5 million outstanding on our Term Loan, net of issuance costs, and no borrowed amounts outstanding on our Revolving Credit Facility as of December 27, 2024.
The increase in G&A expenses consisted of an increase of $9.2 million in the Energy segment combined with an increase of $2.3 million in the Engineering and Consulting 42 Table of Contents segment, partially offset by a decrease of $5.4 million in unallocated corporate expenses.
General and administrative (“G&A”) expenses increased by $13.7 million, or 8.7%, in fiscal year 2024 compared to fiscal year 2023. G&A expenses consisted of an increase of $7.4 million in the Energy segment combined with an increase of $4.2 million in the Engineering and Consulting segment, and an increase of $2.1 million in unallocated corporate expenses.
Future interest payments on our Credit Facility are estimated using floating rates in effect as of December 29, 2023. ​ As of December 29, 2023, we did not have any remaining contingent consideration payable related to any prior acquisitions.
Future interest payments on our Credit Facility are estimated using floating rates in effect as of December 27, 2024. ​ We are obligated to pay earnout payments in connection with our acquisition of Enica Engineering, PLLC. (“Enica”).
Income (loss) from operations . Operating loss was $7.1 million for fiscal year 2022, compared to an operating loss of $8.7 million for fiscal year 2021, as a result of the factors noted above. As a percentage of contract revenue, the operating loss improved to 1.6% for fiscal year 2022 from an operating loss of 2.5% for fiscal year 2021.
Operating income increased 42.0% to $31.4 million for fiscal year 2024, compared to an operating income of $22.1 million for fiscal year 2023, as a result of the factors noted above. Total other expense, net . Total other expense, net, decreased $2.8 million, or 37.5%, in fiscal year 2024 compared to fiscal year 2023.
In addition, as of December 29, 2023, we had $23.4 million of unrestricted cash and cash equivalents.
In addition, as of December 27, 2024, we had $74.2 million of unrestricted cash and cash equivalents. As of December 27, 2024, we were in compliance with the covenants contained in the Credit Agreement.
Direct costs of consolidated contract revenue increased $67.7 million, or 31.1%, in fiscal year 2022 compared to fiscal year 2021, primarily due to increases in our contract revenues in our Energy segment as described above as well as the ramping up of new projects for which we saw higher project startup costs relative to the revenue recognized.
Direct costs of consolidated contract revenue increased $32.7 million, or 9.9%, in fiscal year 2024 compared to fiscal year 2023, primarily as a result of the increase, and change of mix, in contract revenues as described above.
As described in Part II, Item 8, Note 5, “ Debt Obligations ,” of the Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K , on September 29, 2023, we and certain of our subsidiaries entered into the Credit Agreement with a syndicate of financial institutions as lenders and BMO, as administrative agent.
For further discussion of our acquisitions, see Part II, Item 8, Note 13 , “ Business Combinations ” of the Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K. Income Taxes Income taxes are accounted for under the asset and liability method.
The decrease in gross margin percentage was primarily driven by changes in the mix of revenues as described above, combined with a reduction in software licensing revenues and the ramping up of new projects for which we saw higher project startup costs relative to the revenue recognized. ​ General and administrative expenses.
Gross profit increased 12.8% to $202.8 million, or a 35.8% gross margin, for fiscal year 2024 compared to $179.8 million, or a 35.2% gross margin for fiscal year 2023. The increase in gross margin was primarily driven by changes in the mix of revenues as described above. ​ General and administrative expenses.
Subcontractor services and other direct costs increased by $50.4 million, or 33.1%, and salaries and wages increased by $17.3 million, or 26.4%, in fiscal year 2022 compared to fiscal year 2021, primarily due to the increases in contract revenues as described above combined with changes in the mix of those contract revenues to those which contain a higher percentage of material costs and installation subcontracting and lower percentage of labor costs, as well as the ramping up of new projects for which we saw higher project startup costs relative to the revenue recognized.
Subcontractor services and other direct costs increased $29.1 million, or 12.1%, in fiscal year 2024 compared to fiscal year 2023, primarily due to the increase in construction management revenues, which utilize a higher percentage of material cost and installation subcontracting.
Income tax expense (benefit) . We recorded an income tax benefit of $3.0 million for fiscal year 2022 compared to a tax benefit of $4.0 million for fiscal year 2021.
We recorded an income tax expense of $4.1 million for fiscal year 2024, compared to a tax expense of $3.7 million for fiscal year 2023. The tax expense is primarily attributable to the income before income tax combined with increases in discrete items related to stock compensation and additional energy efficiency building deductions.
Total other expense, net . Total other expense, net, was $4.4 million for fiscal year 2022 compared to $3.7 million for fiscal year 2021. The increase in total other expense, net is primarily due to higher interest expense as a result of higher variable interest rates under our credit facilities, partially offset by income from indemnification agreements.
The decrease in total other expense, net is primarily due to lower interest expense resulting from the reduced interest rate spread derived from lower debt leverage levels under our Credit Facilities, combined with increased income from interest as a result of our higher cash balances. 39 Table of Contents Income tax expense (benefit) .
Removed
Consolidated contract revenue increased $75.4 million, or 21.3%, in fiscal year 2022 compared to fiscal year 2021, primarily due to incremental revenues in our Energy segment generated from new governmental construction-management and design-build projects, combined with incremental revenues from the resumption of projects that had been suspended in fiscal year 2021 due to the Covid-19 pandemic, and increased governmental revenues in our Engineering and Consulting segment, partially offset by lower software licensing revenue.
Added
Consolidated contract revenue increased $55.7 million, or 10.9%, in fiscal year 2024 compared to fiscal year 2023, due to incremental revenues in both our Energy segment and in our Engineering and Consulting segment.
Removed
Contract revenue in our Energy segment increased $71.1 million, or 24.8%, in fiscal year 2022 compared to fiscal year 2021, primarily as a result of incremental revenues from new governmental construction-management and design-build projects, combined with incremental revenues from the resumption of projects that had been suspended in fiscal year 2021 due to the Covid-19 pandemic, partially offset by lower software licensing revenue.
Added
Contract revenue in our Energy segment increased $46.3 million, or 10.9%, in fiscal year 2024 compared to fiscal year 2023, primarily as a result of higher construction management revenues for government clients and increased demand for energy efficiency and electrification services under utility programs.
Removed
Gross Profit . Gross profit increased 5.7% to $143.6 million, or a 33.5% gross margin, for fiscal year 2022 compared to $135.9 million, or a 38.4% gross margin for fiscal year 2021.
Added
As a percentage of contract revenue, direct salaries and wages decreased to 16.5% in fiscal year 2024, from 17.6% in fiscal year 2023, while subcontractor services and other direct costs increased to 47.6% in fiscal year 2024, from 47.1% in fiscal year 2023.
Removed
General and administrative (“G&A”) expenses increased by $6.1 million, or 4.2%, in fiscal year 2022 compared to fiscal year 2021.
Added
Salaries and wages increased by $3.6 million, or 4.0%, in fiscal year 2024 compared to fiscal year 2023, primarily as a result of the increases in contract revenue as described above. Gross Profit .
Removed
The increase in G&A expenses was primarily attributed to higher salaries and wages, payroll taxes and employee benefits, increased contingent consideration expense related to prior acquisitions, and higher computer-related expenses, partially offset by lower stock-based compensation expenses.
Added
The increase in stock-based compensation expenses was primarily related to new stock grants to current employees and executives at a higher stock price. The decrease in depreciation and amortization was primarily related to lower amortization of intangible assets from acquisitions prior to fiscal year 2024. Income (loss) from operations .
Removed
The decrease in stock-based compensation expenses was primarily related to previously awarded stock grants reaching the end of their corresponding vesting periods. The decrease in facilities and facility related expenses was due to satisfied facility leases that were not renewed. Depreciation and amortization was relatively flat for the fiscal year 2022 compared to fiscal year 2021.
Added
Compared to prior year, the lower effective tax rate in fiscal year 2024 resulted from increased deductions for energy efficiency building deductions. Net income (loss) . Our net income was $22.6 million for fiscal year 2024, as compared to a net income of $10.9 million for fiscal year 2023.
Removed
The decrease in the income tax benefit is primarily attributable to the lower loss before income tax expense, the non-recurrence tax benefits provided by the Coronavirus Aid, Relief, and Economic Security Act of 2020 (“CARES Act”), and various tax deductions and tax credits. Net income (loss) .
Added
The increase in net income was primarily attributable to the increase in income from operations combined with the decrease in total other expense and lower effective tax rate. Fiscal Year 2023 Compared to Fiscal Year 2022 Contract revenue.
Removed
Our net loss was relatively flat for fiscal year 2022, compared to fiscal year 2021, as a result of the factors described above.
Added
Cash flows provided by operating activities for fiscal year 2024 resulted primarily from the increase in earnings, and lower working capital requirements resulting from more robust billing and payment terms and the timing of collections at the end of the fiscal year.
Removed
Cash flows provided by operating activities for fiscal year 2021 resulted primarily from the changing mix of revenues, partially offset by increased demand for working capital related to the resumption of our utility programs that were suspended in 2020 and start-up costs associated with certain new contract awards.
Added
Cash Flows from Investing Activities Cash flows used in investing activities were $15.7 million, $11.5 million, and $9.5 million for fiscal years 2024, 2023, and 2022, respectively.
Removed
In addition, as of December 29, 2023, we did not have any arrangements involving the potential incurrence of future contingent consideration .
Added
Cash flows used in investing activities for fiscal year 2024 were primarily due to cash paid for an acquisition, combined with cash paid for the development of proprietary software and the purchase of computers and equipment.
Removed
During fiscal years 2023, 2022 and 2021, we did not have any material acquisitions. Income Taxes Income taxes are accounted for under the asset and liability method.
Added
We are obligated to pay up to $6.0 million in cash if Enica exceeds certain financial targets during the two years after the Enica closing date of October 23, 2024 (the “Enica Closing Date”). As of December 27, 2024, we had contingent consideration payable of $4.2 million related to the Enica acquisition.
Added
For fiscal year 2024, our statement of operations includes $0.2 million of interest accretion (excluding fair value adjustments) related to the contingent consideration.
Added
During fiscal year 2024, we acquired substantially all of the assets of Enica. As of December 27, 2024, we had not yet completed our final estimate of fair value of the assets acquired relating to the acquisitions of Enica due to the timing of the transactions and lack of complete information necessary to finalize such estimates of fair value.
Added
Accordingly, we have preliminarily estimated the fair values of the assets acquired and will finalize such fair value estimates within twelve months of the Enica Closing Date. During fiscal years 2023 and 2022, we did not have any material acquisitions.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

4 edited+0 added−0 removed6 unchanged
Biggest changeBased upon the amount of our outstanding indebtedness as of December 29, 2023, a one percentage point increase in the effective interest rate would change our annual interest expense by approximately $1.0 million in fiscal year 2023.
Biggest changeBased upon the amount of our outstanding indebtedness as of December 27, 2024, a one percentage point increase in the effective interest rate, inclusive of our interest rate swap agreement, would change our annual interest expense by approximately $0.4 million in fiscal year 2024.
The interest swap agreement was designated as a cash flow hedge to fix the variable interest rate on a portion of the outstanding principal amount under our Term Loan. The interest rate swap fixed rate is 4.77% and expires on September 29, 2026. ​ ​ ​ ​ 54 Table of Contents
The interest swap agreement was designated as a cash flow hedge to fix the variable interest rate on a portion of the outstanding principal amount under our Term Loan. The interest rate swap fixed rate is 4.77% and expires on September 29, 2026. ​ ​ ​ ​ 52 Table of Contents
The value of a financial instrument may change as a result of changes in interest rates, exchange rates, commodity prices, equity prices and other market changes. Market risk is attributed to all market risk sensitive financial instruments, including long-term debt. As of December 29, 2023, we had cash and cash equivalents of $23.4 million.
The value of a financial instrument may change as a result of changes in interest rates, exchange rates, commodity prices, equity prices and other market changes. Market risk is attributed to all market risk sensitive financial instruments, including long-term debt. As of December 27, 2024, we had cash and cash equivalents of $74.2 million.
As of December 29, 2023, $98.1 million was outstanding under our Term Loan, and we had no borrowed amounts outstanding and $4.1 million in letters of credit were issued under our Revolving Credit Facility. Each of our Term Loan and Revolving Credit Facility mature on September 29, 2026 and are governed by our Credit Agreement.
As of December 27, 2024, $90.0 million was outstanding under our Term Loan, and we had no borrowed amounts outstanding and $1.6 million in letters of credit were issued under our Revolving Credit Facility. Each of our Term Loan and Revolving Credit Facility mature on September 29, 2026 and are governed by our Credit Agreement.

Other WLDN 10-K year-over-year comparisons