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Report of Independent Registered Public Accounting Firm (PCAOB ID 173 )
−Removed: Consolidated Balance Sheets as of December 27, 2024 and December 29, 2023
−Removed: Consolidated Statements of Comprehensive Income for each of the fiscal years in the three-year period ended December 27, 2024
−Removed: Consolidated Statements of Stockholders’ Equity for each of the fiscal years in the three-year period ended December 27, 2024
−Removed: Consolidated Statements of Cash Flows for each of the fiscal years in the three-year period ended December 27, 2024
+Added: Consolidated Balance Sheets as of January 2, 2026 and December 27, 2024
+Added: Consolidated Statements of Comprehensive Income for each of the fiscal years in the three-year period ended January 2, 2026
+Added: Consolidated Statements of Stockholders’ Equity for each of the fiscal years in the three-year period ended January 2, 2026
+Added: Consolidated Statements of Cash Flows for each of the fiscal years in the three-year period ended January 2, 2026
Notes to Consolidated Financial Statements
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We have audited the accompanying consolidated balance sheets of Willdan Group, Inc.
−Removed: (the "Company") as of December 27, 2024 and December 29, 2023, the related consolidated statements of comprehensive income (loss), stockholders’ equity, and cash flows for each of the years in the three-year period ended December 27, 2024, and the related notes (collectively referred to as the "financial statements").
−Removed: We also have audited the Company’s internal control over financial reporting as of December 27, 2024, based on criteria established in Internal Control – Integrated Framework:
+Added: (the "Company") as of January 2, 2026 and December 27, 2024, the related consolidated statements of comprehensive income (loss), stockholders’ equity, and cash flows for each of the years in the three-year period ended January 2, 2026, and the related notes (collectively referred to as the "financial statements").
+Added: We also have audited the Company’s internal control over financial reporting as of January 2, 2026, based on criteria established in Internal Control – Integrated Framework:
(2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
−Removed: In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 27, 2024 and December 29, 2023, and the results of its operations and its cash flows for each of the years in the three-year period ended December 27, 2024 in conformity with accounting principles generally accepted in the United States of America.
−Removed: Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 27, 2024, based on criteria established in Internal Control – Integrated Framework:
+Added: In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of January 2, 2026 and December 27, 2024, and the results of its operations and its cash flows for each of the years in the three-year period ended January 2, 2026 in conformity with accounting principles generally accepted in the United States of America.
+Added: Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of January 2, 2026, based on criteria established in Internal Control – Integrated Framework:
(2013) issued by COSO.
10 unchanged sentences
Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk.
−Removed: As permitted, the Company has excluded the operations of Enica Engineering, PLLC.
−Removed: acquired during 2024, which is described in Note 13 of the consolidated financial statements, from the scope of management’s report on internal control over financial reporting.
−Removed: As such, it has also been excluded from the scope of our audit of internal control over financial reporting.
+Added: As permitted, the Company has excluded the operations of Compass Municipal Advisors, LLC, Alternative Power Generation, Inc., and Alpha Inspections, Inc., acquired during the fiscal year ended January 2, 2026, which is described in Note 13 of the consolidated financial statements, from the scope of management’s report on internal control over financial reporting.
+Added: As such, they have also been excluded from the scope of our audit of internal control over financial reporting.
Our audits also included performing such other procedures as we considered necessary in the circumstances.
1 unchanged sentence
Definition and Limitations of Internal Control Over Financial Reporting
−Removed: A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.
−Removed: A company’s internal control over financial reporting includes those policies
−Removed: and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;
+Added: A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with
+Added: generally accepted accounting principles.
+Added: A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;
(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;
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● Recalculated revenue recognition based on the percentage of completion.
−Removed: ● Performed a retrospective review procedures to assess management’s historical ability to accurately estimate the transaction price and cost to complete of fixed price contracts.
+Added: ● Performed retrospective review procedures to assess management’s historical ability to accurately estimate the transaction price and cost to complete of fixed price contracts.
/s/ Crowe LLP
1 unchanged sentence
Los Angeles, California
−Removed: March 6, 2025
+Added: February 26, 2026
WILLDAN GROUP, INC.
5 unchanged sentences
Restricted cash
−Removed: Accounts receivable, net of allowance for doubtful accounts of $ 1,313 and $ 866 at December 27, 2024 and December 29, 2023, respectively
+Added: Accounts receivable, net of allowance for doubtful accounts of $ 340 and $ 1,313 at January 2, 2026 and December 27, 2024, respectively
Contract assets
16 unchanged sentences
Total current liabilities
−Removed: Contingent consideration payable
+Added: Contingent consideration payable, less current portion
Notes payable, less current portion
7 unchanged sentences
Common stock, $ 0.01 par value, 40,000 shares authorized;
−Removed: 14,169 and 13,682 shares issued and outstanding at December 27, 2024 and December 29, 2023, respectively
+Added: 14,762 and 14,169 shares issued and outstanding at January 2, 2026 and December 27, 2024, respectively
Additional paid-in capital
59 unchanged sentences
Issuance of restricted stock award and units
+Added: Stock issued to acquire businesses
Stock-based compensation expense
1 unchanged sentence
Net unrealized gain (loss) on derivative contracts
−Removed: Balance at December 27, 2024
+Added: Balance at January 2, 2026
See accompanying notes to consolidated financial statements.
30 unchanged sentences
Payments on contingent consideration
−Removed: Receipt of restricted cash
Payment on restricted cash
1 unchanged sentence
Payments on debt issuance costs
−Removed: Proceeds from notes payable
−Removed: Borrowings under term loan facility and line of credit
−Removed: Repayments under term loan facility and line of credit
+Added: Borrowings under prior term loan and line of credit
+Added: Payments made to retire prior credit agreement
+Added: Borrowing to fund new credit agreement
+Added: Principal payments on outstanding debt
Principal payments on finance leases
9 unchanged sentences
Supplemental disclosures of noncash investing and financing activities:
+Added: Issuance of common stock related to business acquisitions
Contingent consideration related to business acquisitions
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The Company operates and reports its quarterly financial results based on the 13 -week period ending on the Friday closest to June 30, September 30, and December 31 and the 13 or 14 -week period ending on the Friday closest to March 31, as applicable.
−Removed: Fiscal year 2024, fiscal year 2023, and fiscal year 2022, which ended on December 27, 2024 , December 29, 2023, and December 30, 2022, respectively, were all comprised of 52 weeks, with all quarters presented consisting of 13 weeks.
+Added: Fiscal year 2025 , which ended on January 2 , 2026, was comprised of 53 weeks, with the first quarter consisting of 14 weeks and the remaining quarters consisting of 13 weeks each.
+Added: Fiscal year 2024 and fiscal year 2023, which ended on December 27, 2024, December 29, 2023, respectively, were both comprised of 52 weeks, with all quarters presented consisting of 13 weeks.
Principles of Consolidation
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Actual results could differ from those estimates.
+Added: WILLDAN GROUP, INC.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
Cash and Cash Equivalents
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The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk on cash and cash equivalents.
−Removed: WILLDAN GROUP, INC.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
Restricted Cash
7 unchanged sentences
The carrying amounts of certain other assets and contingent consideration are discounted to their present value because the time between the origination of these instruments and their expected realization or payment is greater than one year.
−Removed: As of December 27, 2024 and December 29, 2023, the carrying amounts of the Company's cash and cash equivalents, accounts receivable, contract assets, other receivables, prepaid expenses and other current assets, accounts payable, accrued liabilities and contract liabilities, approximate their fair values because of the relatively short period of time between the origination of these instruments and their expected realization or payment.
+Added: As of January 2, 2026 and December 27, 2024, the carrying amounts of the Company's cash and cash equivalents, accounts receivable, contract assets, other receivables, prepaid expenses and other current assets, accounts payable, accrued liabilities and contract liabilities, approximate their fair values because of the relatively short period of time between the origination of these instruments and their expected realization or payment.
The carrying amounts of debt obligations approximate their fair values since the terms are comparable to terms currently offered by local lending institutions for loans of similar terms to companies with comparable credit risk.
−Removed: The carrying amounts of the derivative financial instrument is valued based on Level 2 inputs.
−Removed: The fair value of the contingent consideration liability is valued on Level 3 inputs.
+Added: The carrying amounts of the derivative financial instrument is valued based on Level 2 inputs and the fair value of the contingent consideration liability is valued on Level 3 inputs.
Variable Interest Entities
6 unchanged sentences
In accordance with ASC 810, the Company performs ongoing reassessments of whether an enterprise is the primary beneficiary of a VIE.
−Removed: As of December 27, 2024, the Company had one VIE — Genesys Engineering, P.C.
−Removed: Pursuant to New York law, the Company does not own capital stock of Genesys and does not have control over the professional decision making of Genesys’s engineering services.
−Removed: The Company, however, has entered into an administrative services agreement with Genesys pursuant to which WES, the Company’s wholly-owned subsidiary, will provide Genesys with ongoing administrative, operational and other non-professional support services.
−Removed: The Company manages Genesys and has the power to direct the activities that most significantly impact Genesys’s performance, in addition to being
WILLDAN GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
−Removed: obligated to absorb expected losses from Genesys.
+Added: As of January 2, 2026, the Company had one VIE — Genesys Engineering, P.C.
+Added: Pursuant to New York law, the Company does not own capital stock of Genesys and does not have control over the professional decision making of Genesys’s engineering services.
+Added: The Company, however, has entered into an administrative services agreement with Genesys pursuant to which WES, the Company’s wholly-owned subsidiary, will provide Genesys with ongoing administrative, operational and other non-professional support services.
+Added: The Company manages Genesys and has the power to direct the activities that most significantly impact Genesys’s performance, in addition to being obligated to absorb expected losses from Genesys.
Accordingly, the Company is the primary beneficiary of Genesys and consolidates Genesys as a VIE.
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As such, the Company identifies a contract with a customer, identifies the performance obligations in the contract, determines the transaction price, allocates the transaction price to each performance obligation in the contract and recognizes revenues when (or as) the Company satisfies a performance obligation.
+Added: WILLDAN GROUP, INC.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
The following table reflects the Company’s two reportable segments and the types of contracts that each most commonly enters into for revenue generating activities.
9 unchanged sentences
Percentage-of-completion
−Removed: WILLDAN GROUP, INC.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
Revenue on the vast majority of the Company’s contracts is recognized over time because of the continuous transfer of control to the customer.
3 unchanged sentences
Many of the Company’s fixed price contracts involve a high degree of subcontracted fixed price effort and, usually, are relatively short in duration, thereby lowering the risks of not properly estimating the percent complete.
+Added: As of January 2, 2026, the Company had $ 179.7 million related to fixed price contract obligations of which $ 107.9 million related to fixed price contract obligations in excess of twelve months.
Revenue on time-and-materials and unit-based contracts is recognized as the work is performed in accordance with the specific rates and terms of the contract.
5 unchanged sentences
In accordance with ASC 606, the Company performs an assessment of each contract to identify the performance obligations, determine the overall transaction price for the contract, allocate the transaction price to the performance obligations, and recognize the revenue when the performance obligations are satisfied.
−Removed: The Company utilizes the residual approach by which it estimates the standalone selling price by reference to the total transaction price less the sum of the observable standalone selling prices of other goods or services promised in the contract.
+Added: In cases where the standalone selling price of the software licenses is not present, the Company utilizes the residual approach by which it estimates the standalone selling price by reference to the total transaction price less the sum of the observable standalone selling prices of other goods or services promised in the contract.
The software license revenue is typically recognized at a point in time when control is transferred to the client, which is defined as the point in time when the client can use and benefit from the license.
1 unchanged sentence
Related professional services include training and support services in which the standalone selling price is determined based on an input measure of hours incurred to total estimated hours and is recognized over time, which usually is the life of the contract.
+Added: WILLDAN GROUP, INC.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
To determine the proper revenue recognition method for contracts, the Company evaluates whether two or more contracts should be combined and accounted for as one single contract and whether the combined contract should be accounted for as one performance obligation.
8 unchanged sentences
For contracts with multiple performance obligations, the Company allocates the transaction price to each performance obligation using the best estimate of the standalone selling price of each distinct good or service in the contract.
−Removed: For the periods presented, the value of the separate performance obligations under contracts with multiple
−Removed: WILLDAN GROUP, INC.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
−Removed: performance obligations (generally measurement and verification tasks under certain energy performance contracts) were not material.
+Added: For the periods presented, the value of the separate performance obligations under contracts with multiple performance obligations (generally measurement and verification tasks under certain energy performance contracts) were not material.
In cases where the Company does not provide the distinct good or service on a standalone basis, the primary method used to estimate standalone selling price is the expected cost plus a margin approach, under which the Company forecasts the Company’s expected costs of satisfying a performance obligation and then adds an appropriate margin for the distinct good or service.
7 unchanged sentences
The Company estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on assessments of legal enforceability, the Company’s performance, and all information (historical, current and forecasted) that is reasonably available to the Company.
+Added: WILLDAN GROUP, INC.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
Due to the nature of the work required to be performed on many of the Company’s performance obligations, the estimation of total revenue and cost at completion is complex, subject to many variables and requires significant judgment.
10 unchanged sentences
The effect of a contract modification that is not distinct from the existing contract on the transaction price and the Company’s measure of progress for the performance obligation to which it relates is recognized as an adjustment to revenue (either as an increase in or a reduction of revenue) on a cumulative catch-up basis.
−Removed: WILLDAN GROUP, INC.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
For contract modifications that result in the promise to deliver goods or services that are distinct from the existing contract and the increase in price of the contract is for the same amount as the standalone selling price of the additional goods or services included in the modification, the Company accounts for such contract modifications as a separate contract.
5 unchanged sentences
Direct costs of contract revenue also include production expenses, subcontractor services and other expenses that are incurred in connection with revenue producing projects.
+Added: WILLDAN GROUP, INC.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
Direct costs of contract revenue exclude that portion of technical and nontechnical salaries and wages related to marketing efforts, vacations, holidays and other time not spent directly generating revenue under existing contracts.
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Retainage, included in contract assets, represents amounts withheld from billings to the Company’s clients pursuant to provisions in the contracts and may not be paid to the Company until specific tasks are completed or the project is completed and, in some instances, for even longer periods.
−Removed: As of December 27, 2024 and December 29, 2023, contract assets included retainage of $ 22.0 million and $ 14.3 million, respectively.
+Added: As of January 2, 2026 and December 27, 2024, contract assets included retainage of $ 29.5 million and $ 22.0 million, respectively.
General and Administrative Expenses
1 unchanged sentence
General and administrative expenses also include facility costs, depreciation and amortization, professional services, legal and accounting fees and administrative operating costs.
−Removed: WILLDAN GROUP, INC.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
Within general and administrative expenses, “Other” includes expenses such as provision for billed or unbilled receivables, professional services, legal and accounting, computer costs, travel and entertainment, marketing costs and acquisition costs.
The Company expenses general and administrative costs when incurred.
−Removed: In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No.
−Removed: 2016-02, Leases (Topic 842) (“ASU 2016-02”).
−Removed: ASU 2016-02 require, among other things, that lessees recognize the following for all leases (unless a policy election is made by class of underlying asset to exclude short-term leases) at the commencement date:
−Removed: (1) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis;
−Removed: and (2) a right-of-use asset, which is an asset that represents the lessee’s right to use, or the direct use of, a specified asset for the lease term.
−Removed: The FASB issued ASU 2018-11 on July 30, 2018, which allows entities to apply the provisions of ASC 842 at the effective date without adjusting comparative periods.
−Removed: Under this guidance, the net present value of future lease payments is recorded as right-of-use assets and lease liabilities.
−Removed: In addition, the Company elected the ‘package of practical expedients’ permitted under the transition guidance within the new standard, which among other things, allowed the Company to carry forward the historical lease classification.
+Added: The Company accounts for leases in accordance with ASC 842 which requires lessees to recognize a right-of-use asset and a lease liability on the balance sheet measured as the net present value of future lease payments, with the exception of short-term leases which are defined as those less than 12 months.
+Added: The lease expense is then recognized over the term of the lease.
+Added: The Company elected the ‘ package of practical expedients’ permitted under the transition guidance of ASC 842, which among other things, allowed the Company to carry forward the historical lease classification.
In addition, the Company elected not to utilize the hindsight practical expedient to determine the lease term for existing leases.
The Company also elected the practical expedient to not separate lease and non-lease components for its facilities leases.
−Removed: Previously, all of the Company’s office leases were classified as operating leases and rent expense was included in facilities expense in the consolidated statements of comprehensive income.
−Removed: In addition, the Company leases certain equipment under financing leases.
+Added: WILLDAN GROUP, INC.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
+Added: The Company also leases certain equipment under financing leases.
The economic substance of the leases is a financing transaction for acquisition of equipment and leasehold improvements.
15 unchanged sentences
Field equipment
−Removed: WILLDAN GROUP, INC.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
Goodwill represents the excess of costs over fair value of the assets acquired.
6 unchanged sentences
If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset.
+Added: WILLDAN GROUP, INC.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
Accounting for Claims against the Company
16 unchanged sentences
Business Combinations
+Added: During fiscal year 2025, the Company completed three acquisitions:
+Added: Compass Municipal Advisors, LLC.
+Added: (“Compass”), Alternative Power Generation, Inc.
+Added: (“APG”), and Alpha Inspections, Inc.
+Added: During the fiscal year 2024, the Company completed one acquisition:
+Added: Enica Engineering, PLLC .
+Added: During fiscal year 2023, the Company did not have any material acquisitions.
The acquisition method of accounting for business combinations requires the Company to use significant estimates and assumptions, including fair value estimates, as of the business combination date and to refine those estimates as necessary during the measurement period (defined as the period, not to exceed one year, in which the Company may adjust the provisional amounts recognized for a business combination based upon new information about facts that existed on the business combination date).
−Removed: WILLDAN GROUP, INC.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
Under the acquisition method of accounting, the Company recognizes separately from goodwill the identifiable assets acquired, the liabilities assumed, and any non-controlling interests in an acquiree, at the acquisition date fair value.
1 unchanged sentence
Generally, the Company engages a third-party independent valuation specialist to assist in management’s determination of fair values of tangible and intangible assets acquired and liabilities assumed.
+Added: WILLDAN GROUP, INC.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
In circumstances where an acquisition involves a contingent consideration arrangement, the Company recognizes a liability equal to the fair value of the contingent payments it expects to make as of the acquisition date.
2 unchanged sentences
Changes in the estimated fair value of contingent earn-out payments are included in general and administrative expenses.
+Added: As of January 2, 2026, the Company had contingent consideration payable of $ 20.4 million related to the acquisitions of Enica, APG, and Compass.
+Added: The Company has contingent obligations to make earnout payments in connection with its acquisitions of Enica, APG, and Compass, subject to their future financial performance.
+Added: The Company is 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 .
+Added: The Company is obligated to pay up to $ 18.0 million in cash if APG exceeds certain financial targets during the three years after the APG closing date of March 3, 2025 .
+Added: The Company is obligated to pay up to $ 1.0 million in cash if Compass exceeds certain financial targets during the one year after the Compass closing date of January 2, 2026 .
+Added: Through the twelve months ended January 2, 2026, the Company’s statement of operations includes $ 3.2 million of interest accretion related to the contingent consideration.
In circumstances where an acquisition involves acquiring customer relationships, the fair value for customer relationships is determined as of the acquisition date using the excess earnings method.
1 unchanged sentence
The assumptions that have the most significant effect on the fair value calculations are the customer attrition rates, projected customer revenue growth rates, margins, contributory asset charges, and discount rates.
+Added: During the fiscal year 2025, the accounting for the consideration for Enica was finalized.
+Added: In addition, the Company did not make any adjustments to the consideration for Enica, and as a result, there were no adjustments to the purchase price allocation for the fiscal year ended January 2, 2026.
Costs that the Company incurs to complete the business combination such as investment banking, legal and other professional fees are not considered part of consideration.
The Company charges these acquisition costs to general and administrative expense as they are incurred.
−Removed: On October 23, 2024, the Company acquired substantially all of the assets of Enica Engineering, PLLC.
−Removed: During fiscal years 2023 and 2022, the Company did not have any material acquisitions.
−Removed: For further information, see Note 13, “ Business Combinations ”, of the Notes to consolidated financial statements included in this Annual Report on Form 10-K.
+Added: For more information regarding current year acquisitions, see Note 13, “ Business Combinations ”, of the Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K.
Income taxes are accounted for under the asset and liability method.
6 unchanged sentences
Should a change in circumstances lead to a change in judgment about the utilization of deferred tax assets in future years, the Company would adjust the related valuation allowances in the period that the change in circumstances occurs, along with a corresponding increase or charge to income.
−Removed: During each fiscal year, management assesses the available positive and negative evidence to estimate if sufficient future taxable income will be generated to utilize existing deferred tax assets.
−Removed: At the end of fiscal year 2023, the Company had a total valuation allowance of $ 1.2 million.
−Removed: During 2024, the Company released $ 0.1 million of the
WILLDAN GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
−Removed: valuation allowance due to expected future utilization of deferred tax assets.
−Removed: As of December 27, 2024, the Company had a total valuation allowance of $ 1.1 million related to its deferred tax assets.
+Added: During each fiscal year, management assesses the available positive and negative evidence to estimate if sufficient future taxable income will be generated to utilize existing deferred tax assets.
+Added: At the start of fiscal year 2024, the Company had a total valuation allowance related to its deferred tax assets of $ 1.2 million.
+Added: During fiscal year 2024, the Company released $ 0.1 million of the valuation allowance due to expected future utilization of deferred tax assets, leaving a total valuation allowance of $ 1.1 million at the end of fiscal year 2024.
+Added: During fiscal year 2025, no changes were made to tax valuation allowance as the available positive and negative evidence did not warrant a revision.
For acquired business entities, if the Company identifies 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 the Company records the offset to goodwill.
3 unchanged sentences
The Company recognizes interest and penalties related to unrecognized tax benefits in income tax expense.
+Added: Discrete tax items are specific tax-related events or adjustments that are recognized in the period in which they occur, rather than being tied to ongoing operating income or recurring earnings.
+Added: Unlike regular income tax expense, which is typically calculated as a percentage of pre-tax income, discrete tax items arise from one-time or event-driven transactions.
+Added: The Company’s income tax expense can be significantly impacted by these discrete tax items, such as energy-efficiency building deductions or stock compensation windfalls and shortfalls.
+Added: As a result, these discrete tax items can generate substantial tax benefits or expenses that vary by reporting period and cause fluctuations from initially estimated effective tax rates.
For further information, see Note 11, “Income Taxes” , of the Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K.
9 unchanged sentences
The Company records changes in the fair value (i.e., gains or losses) of the derivatives that have been designated as cash flow hedges in its consolidated balance sheets as accumulated other comprehensive income (loss) and in its consolidated statements of comprehensive (loss) income as a loss or gain on cash flow hedge valuation.
+Added: WILLDAN GROUP, INC.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
Operating Cycle
4 unchanged sentences
Accounting Pronouncements Recently Adopted
−Removed: In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No.
−Removed: 2023-07, “Segment Reporting (Topic 280):
−Removed: Improvements to Reportable Segment Disclosures” (“ASU 2023-07”).
−Removed: ASU 2023-07 expands segment disclosure requirements through enhanced disclosures related to significant segment expenses that are regularly provided to the chief operating decision maker (“CODM”), a description of other segment items by reportable segment, and any additional measures of a segment's profit or loss used by the CODM when deciding how to allocate resources.
−Removed: All disclosure requirements under ASU 2023-07 are also required for public entities with a single reportable segment.
−Removed: The amendments are effective for the fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.
−Removed: The Company adopted this standard effective for its fiscal year 2024, which began on December 30, 2023 .
−Removed: For more information and related disclosures, see Note 9 , “ Segment Information ”, of the Notes to consolidated financial statements included in this Annual Report on Form 10-K.
+Added: In July 2025, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No.
+Added: 2025-05, “Financial Instruments – Credit Losses (Topic 326):
+Added: Measurement of Credit Losses for Accounts Receivable and Contract Assets” (“ASU 2025-05”).
+Added: ASU 2025-05 allows an entity to elect a practical expedient to assume that current conditions as of the balance sheet date do not change for the remaining life of the asset in the development of a reasonable and supportable forecast as part of estimating expected credit losses.
+Added: The amendments are effective for the annual reporting periods beginning after December 15, 2025, and interim periods within those fiscal year reporting periods beginning after December 15, 2025, with early adoption permitted.
+Added: The Company elected to early adopt this standard in the fourth quarter of fiscal year 2025.
+Added: The adoption of this standard did not have a material impact on the Company’s Consolidated Financial Statements.
+Added: In December 2023, the FASB issued ASU No.
+Added: 2023-09, “Income Taxes (Topic 740):
+Added: Improvements to Income Tax Disclosures” (“ASU 2023-09”).
+Added: ASU 2023-09 amends the rules on income tax disclosures to require entities to disclose specific categories in the rate reconciliation, the income or loss from continuing operations before income tax expense or benefit (separated between domestic and foreign) and income tax expense or benefit from continuing operations (separated by federal, state, and foreign).
+Added: In addition, ASU 2023-09 requires entities to disclose their income tax payments to international, federal, state, and local jurisdictions, among other changes.
+Added: The amendments can be applied on a prospective basis although retrospective application is permitted.
+Added: The amendments are effective for the annual reporting periods beginning after December 15, 2024, with early adoption permitted.
+Added: The Company adopted ASU 2023-09 for its fiscal year 2025 annual reporting period, and as permitted by ASU 2023-09, the Company adopted this standard on a prospective basis.
+Added: The adoption of this standard did not have a material impact on the Company’s Consolidated Financial Statements or disclosures.
Accounting Pronouncements Recently Issued
+Added: In December 2025, the FASB issued ASU No.
+Added: 2025-12, “Codification Improvements” (“ASU 2025-12”).
+Added: ASU 2025-12 addresses suggestions received from stakeholders on the Accounting Standards Codification and to make other incremental improvements to generally accepted accounting principles (“GAAP”).
+Added: ASU 2025-12 provides changes to the Codification that (1) clarify, (2) correct errors, or (3) make minor improvements.
+Added: The amendments are effective for the annual reporting periods beginning after December 15, 2026, and interim periods within those fiscal year reporting periods beginning after December 15, 2026, with early adoption permitted.
+Added: The Company does not believe the amendments in ASU 2025-12 will have a material impact on its Consolidated Financial Statements.
+Added: In December 2025, the FASB issued ASU No.
+Added: 2025-11, “Interim Reporting" (Topic 270):
+Added: Narrow-Scope Improvements” (“ASU 2025-11”).
+Added: The ASU 2025-11 amendments are intended to improve the guidance in Topic 270, Interim Reporting, by improving the navigability of the required interim disclosures and clarifying when that guidance is applicable.
+Added: The amendments also provide additional guidance on what disclosures should be provided in interim reporting periods.
+Added: The amendments are effective for the annual reporting periods beginning after December 15, 2027, and interim periods within those fiscal year reporting periods beginning after December 15, 2027, with early adoption permitted either (1) prospectively or (2) retrospectively.
+Added: The Company does not believe the amendments in ASU 2025-11 will have a material impact on its Consolidated Financial Statements.
In November 2025, the FASB issued ASU No.
+Added: 2025-09, “Derivatives and Hedging (Topic 815):
+Added: Hedge Accounting Improvements” (“ASU 2025-09”).
+Added: The ASU 2025-09 amendments are intended to simplify the application of hedge accounting and to more closely align hedge accounting with the economics of an entity's risk management activities in the following five areas:
+Added: (1) similar risk assessment for cash flow hedges, (2) hedging forecasted interest payments on choose-your-rate debt instruments, (3) cash flow hedges of nonfinancial forecasted transactions, (4) net written options as hedging instruments, and (5) foreign-currency-denominated debt instrument as hedging instrument and hedged item (dual hedge).
+Added: The amendments are effective for the annual reporting periods beginning after December 15, 2026, and interim periods within those fiscal year reporting periods beginning after December 15, 2026, with early
+Added: WILLDAN GROUP, INC.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
+Added: adoption permitted.
+Added: The Company is currently evaluating the impact this update will have on its consolidated financial statements.
+Added: In September 2025, the FASB issued ASU No.
+Added: 2025-06, “Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40):
+Added: Targeted Improvements to the Accounting for Internal Software” (“ASU 2025-06”).
+Added: ASU 2025-06 removes references to prescriptive and sequential software development stages which are referred to as “project stages” throughout Subtopic 350-40.
+Added: The amendment introduces a principles-based approach to capitalization of internal-use software costs and requires capitalization of software costs to begin when management has authorized and committed to funding the project and it is probable the project will be completed and used to perform the intended function.
+Added: The amendments do not change what internal-use software costs can be capitalized or when such capitalization ceases.
+Added: The amendments are effective for the annual reporting periods beginning after December 15, 2027, and interim periods within those fiscal year reporting periods beginning after December 15, 2027, with early adoption permitted.
+Added: The Company does not believe the amendments in ASU 2025-06 will have a material impact on its Consolidated Financial Statements.
+Added: In May 2025, the FASB issued ASU No.
+Added: 2025-03, “Business Combinations (Topic 805) and Consolidation (Topic 810):
+Added: Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity” (“ASU 2025-03”).
+Added: ASU 2025-03 requires an entity involved in an acquisition transaction effected primarily by exchanging equity interests when the legal acquiree is a Variable Interest Entity (“VIE”) that meets the definition of a business to consider the factors in paragraphs 805-10-55-12 through 55-15 to determine which entity is the accounting acquirer, rather than defaulting to the conclusion that the primary beneficiary is always the acquirer.
+Added: The amendments are effective for the annual reporting periods beginning after December 15, 2026, and interim periods within those fiscal year reporting periods beginning after December 15, 2026, with early adoption permitted.
+Added: The Company does not believe the amendments in ASU 2025-03 will have a material impact on its Consolidated Financial Statements.
+Added: In November 2024, the FASB issued ASU No.
2024-03, “Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40)” (“ASU 2024-03”).
8 unchanged sentences
The Company is currently evaluating the impact this update will have on its consolidated financial statements.
−Removed: In December 2023, the FASB issued ASU No.
−Removed: 2023-09, “Income Taxes (Topic 740):
−Removed: Improvements to Income Tax Disclosures” (“ASU 2023-09”).
−Removed: ASU 2023-09 amends the rules on income tax disclosures to require entities to disclose specific categories in the rate reconciliation, the income or loss from continuing operations before income tax expense or benefit (separated between domestic and foreign) and income tax expense or benefit from continuing operations (separated by federal, state, and foreign).
−Removed: In addition, ASU 2023-09 requires entities to disclose their income tax payments to international, federal, state, and local jurisdictions, among other changes.
−Removed: The amendments can be applied on a prospective basis although retrospective application is permitted.
−Removed: The amendments are effective for the annual reporting periods beginning after December 15, 2024, with early adoption permitted.
−Removed: The Company is currently evaluating the impact this update will have on its consolidated financial statements.
In October 2023, the FASB issued ASU No.
31 unchanged sentences
Allowances for doubtful accounts have been determined through specific identification of amounts considered to be uncollectible and potential write-offs, plus a non-specific allowance for other amounts for which some potential loss has been determined to be probable based on current and past experience.
−Removed: As of December 27, 2024, the Company had no individual customers that accounted for more than 10% of the Company’s billed outstanding receivables.
−Removed: As of December 29, 2023, two of the Company’s customers, Consolidated Edison of New York and Los Angeles Department of Water and Power (“LADWP”), accounted for 24.6 % of the Company’s billed outstanding receivables.
+Added: As of January 2, 2026, and December 27, 2024, the Company had no individual customers that accounted for more than 10% of the Company’s billed outstanding receivables, respectively.
WILLDAN GROUP, INC.
46 unchanged sentences
The interest rate swap agreement has a total notional amount of $ 50.0 million, has a fixed annual interest rate of 4.77 %, and expires on September 29, 2026 .
−Removed: As of December 27, 2024, the effective portion of the Company’s interest rate swap agreement designated as a cash flow hedge before tax effects was $( 0.2 ) million, of which no amounts were reclassified from accumulated other comprehensive income (loss) to interest expense in fiscal 2024.
+Added: As of January 2, 2026, the effective portion of the Company’s interest rate swap agreement designated as a cash flow hedge before tax effects was ($ 0.3 ) million, of which no amounts were reclassified from accumulated other comprehensive income (loss) to interest expense in fiscal 2025.
The Company expects to reclassify $ 0.3 million from accumulated other comprehensive income (loss) to interest expense within the next twelve months .
3 unchanged sentences
Balance Sheet Location
−Removed: December 27, 2024
+Added: January 2, 2026
December 27, 2024
1 unchanged sentence
Interest rate swap agreement
−Removed: Current assets
−Removed: Interest rate swap agreement
Accrued liabilities
1 unchanged sentence
Other noncurrent liabilities
−Removed: The impact of the effective portions of derivative instruments in cash flow hedging relationships and fair value relationships on other comprehensive income (loss) was $ 0.4 million for the year ended December 27, 2024.
−Removed: The accumulated balances and reporting period activities for the year ended December 27, 2024 related to reclassifications out of accumulated other comprehensive income (loss) are summarized as follows:
+Added: The impact of the effective portions of derivative instruments in cash flow hedging relationships and fair value relationships on other comprehensive income (loss) was immaterial to the Company’s consolidated financial statements the year ended January 2, 2026.
+Added: The accumulated balances and reporting period activities for the year ended January 2, 2026 related to reclassifications out of accumulated other comprehensive income (loss) are summarized as follows:
Gain (Loss) on
13 unchanged sentences
Net current-period other comprehensive income (loss)
−Removed: Balances at December 27, 2024
+Added: Balances at January 2, 2026
WILLDAN GROUP, INC.
3 unchanged sentences
(in thousands)
+Added: New Credit Agreement
+Added: Outstanding borrowings on Term Loan A
+Added: Outstanding borrowings on Revolving Credit Facility
+Added: Outstanding borrowings on Delayed Draw Term Loan
+Added: Prior Credit Agreement
Outstanding borrowings on Term Loan
4 unchanged sentences
Long-term debt portion
−Removed: Credit Facilities
−Removed: On September 29, 2023 (the “Closing Date”), the Company and certain of its subsidiaries entered into a credit agreement (the “Credit Agreement”) with a syndicate of financial institutions as lenders and BMO Bank, N.A.
−Removed: (“BMO”), as administrative agent.
−Removed: The Credit Agreement provides for (i) a $ 100.0 million term loan (the “Term Loan”) and (ii) a $ 50.0 million revolving credit facility (the “Revolving Credit Facility”, and collectively with the Term Loan, the “Credit Facilities”), each maturing on September 29, 2026.
−Removed: The Company may also request lenders to add incremental term loans or increase the aggregate commitment under the Revolving Credit Facility by an aggregate amount of up to $ 75.0 million, subject to meeting certain conditions, and only if the lenders agree to provide such additional term loans or revolving commitments.
−Removed: Borrowings under the Credit Facilities bear interest at either a Base Rate (as defined in the Credit Agreement) or the adjusted Secured Overnight Financing Rate (“SOFR”), at the Company’s option, and in each case, plus an applicable margin, which applicable margin ranges from 0.75 % to 2.00 % with respect to Base Rate borrowings and 1.75 % to 3.00 % with respect to SOFR borrowings, depending on the Company’s Total Net Leverage Ratio (as defined in the Credit Agreement);
+Added: Prior Credit Agreement
+Added: On September 29, 2023 (the “Prior Credit Agreement Closing Date”), the Company and certain of its subsidiaries entered into a credit agreement (the “Prior Credit Agreement”) with a syndicate of financial institutions as lenders and BMO Bank, N.A.
+Added: (“BMO”), as administrative agent (the “Administrative Agent”).
+Added: The Prior Credit Agreement provided for (i) a $ 100.0 million term loan (the “Term Loan”) and (ii) a $ 50.0 million revolving credit facility (the “Prior Revolving Credit Facility”, and collectively with the Term Loan, the “Prior Credit Facilities”), each maturing on September 29, 2026 .
+Added: The Company could also request lenders to add incremental term loans or increase the aggregate commitment under the Prior Revolving Credit Facility by an aggregate amount of up to $ 75.0 million, subject to meeting certain conditions, and only if the lenders agreed to provide such additional term loans or revolving commitments.
+Added: Borrowings under the Prior Credit Facilities bore interest at either a Base Rate (as defined in the Prior Credit Agreement) or the adjusted Secured Overnight Financing Rate (“SOFR”), at the Company’s option, and in each case, plus an applicable margin, which applicable margin ranged from 0.75 % to 2.00 % with respect to Base Rate borrowings and 1.75 % to 3.00 % with respect to SOFR borrowings, depending on the Company’s Total Net Leverage Ratio (as defined in the Prior Credit Agreement);
+Added: provided, that SOFR and the Base Rate could no t be less than 0.00 %, with the specific pricing reset on each date on which the Administrative Agent received the required financial statements under the Prior Credit Agreement for the fiscal quarter then ended.
+Added: The Company would also pay a commitment fee for the unused portion of the Prior Revolving Credit Facility, which ranged from 0.20 % to 0.40 % per annum depending on the Company’s Total Net Leverage Ratio, and fees on the face amount of any letters of credit outstanding under the Prior Revolving Credit Facility, which ranged from 1.3125 % to 2.25 % per annum, in each case, depending on the Company’s Total Net Leverage Ratio, as well as customary fronting fees payable to BMO as letter of credit issuer.
+Added: In connection with the closing of the Prior Credit Facilities, the Company paid certain other fees and expenses.
+Added: The prior Term Loan amortized quarterly in an amount equal to (i) 7.5 % per annum for the first year ending after the Prior Credit Agreement Closing Date and (ii) 10.0 % per annum for the second and third years ending after the Prior Credit Agreement Closing Date, with a final payment of all then remaining principal and interest due on the maturity date of September 29, 2026 .
+Added: The amounts outstanding under the Prior Credit Facilities could be prepaid in whole or in part at any time without penalty (other than customary breakage costs).
+Added: WILLDAN GROUP, INC.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
+Added: Willdan Group, Inc.
+Added: was the borrower under the Prior Credit Agreement and its obligations under the Prior Credit Agreement were guaranteed by its present and future domestic subsidiaries (other than inactive subsidiaries).
+Added: In addition, subject to certain exceptions, all such obligations were secured by substantially all of the assets of Willdan Group, Inc.
+Added: and the subsidiary guarantors (other than inactive subsidiaries).
+Added: The Prior Credit Agreement required compliance with financial covenants, including a maximum Net Leverage Ratio and a minimum Fixed Charge Coverage Ratio (as defined in the Prior Credit Agreement).
+Added: The Prior Credit Agreement also contained customary restrictive covenants, including (i) restrictions on the incurrence of additional indebtedness and additional liens on property, (ii) restrictions on permitted acquisitions and other investments and (iii) limitations on asset sales, mergers and acquisitions.
+Added: Further, the Prior Credit Agreement limited the Company’s payment of future dividends and distributions and share repurchases by the Company.
+Added: Subject to certain exceptions, the borrowings under the Prior Credit Agreement were also subject to mandatory prepayment from (a) any issuances of debt or equity securities, (b) any sale or disposition of assets, (c) insurance and condemnation proceeds, and (d) a percentage of excess cash flow.
+Added: The Prior Credit Agreement included customary events of default.
+Added: Amended and Restated Credit Agreement
+Added: On May 5, 2025 (the “Closing Date”), the Company entered into the Amended and Restated Credit Agreement (the “Amended and Restated Credit Agreement”) with BMO as Administrative Agent and the lenders party thereto, which amended and restated the Prior Credit Agreement.
+Added: The Amended and Restated Credit Agreement, (A) increased the borrowing limit under the Prior Revolving Credit Facility to $ 100.0 million (as amended, the “Revolving Credit Facility”), (B) reduced the Term Loan A (“TLA”) commitment to $ 50.0 million, (C) provided a new $ 50.0 million Delayed Draw Term Loan (the “Delayed Draw Term Loan”, and together with the Revolving Credit Facility and TLA, the “Amended and Restated Credit Facilities”), and (D) extended the maturity date of the Amended and Restated Credit Facilities to May 5, 2030 .
+Added: The Company may also request lenders to add incremental term loans or increase the aggregate commitment under the Revolving Credit Facility by an aggregate amount of (i) up to $ 75.0 million or (ii) 1.0 x the Company’s last twelve months (“LTM”) Adjusted EBITDA (as calculated pursuant to the Amended and Restated Credit Agreement), subject to meeting certain conditions, and only if the lenders agree to provide such additional term loans or revolving commitments.
+Added: Pursuant to the Amended and Restated Credit Agreement, borrowings under the Amended and Restated Credit Facilities bear interest at either a Base Rate (as defined in the Amended and Restated Credit Agreement) or the adjusted SOFR, at the Company’s option, and in each case, plus an applicable margin, which applicable margin ranges from 0.50 % to 1.50 % with respect to Base Rate borrowings and 1.50 % to 2.50 % with respect to SOFR borrowings, depending on the Company’s Total Net Leverage Ratio (as defined in the Amended and Restated Credit Agreement);
provided, that SOFR and the Base Rate can no t be less than 0.00 %, with the specific pricing reset on each date on which the Administrative Agent receives the required financial statements under the Credit Agreement for the fiscal quarter then ended.
The Company must also pay a commitment fee for the unused portion of the Revolving Credit Facility, which ranges from 0.15 % to 0.35 % per annum depending on the Company’s Total Net Leverage Ratio, and fees on the face amount of any letters of credit outstanding under the Revolving Credit Facility, which range from 1.125 % to 1.875 % per annum, in each case, depending on the Company’s Total Net Leverage Ratio, as well as customary fronting fees payable to BMO as letter of credit issuer.
−Removed: In connection with the closing of the Credit Facilities, the Company paid certain other fees and expenses.
−Removed: The Term Loan will amortize quarterly in an amount equal to (i) 7.5 % per annum for the first year ending after the Closing Date and (ii) 10.0 % per annum for the second and third years ending after the Closing Date, with a final payment of all then remaining principal and interest due on the maturity date of September 29, 2026.
−Removed: The amounts outstanding under the Credit Facilities may be prepaid in whole or in part at any time without penalty (other than customary breakage costs).
−Removed: The Term Loan issuance costs are amortized to interest expense over the term of the loan, and as of December 27, 2024, issuance costs of $ 0.7 million remained unamortized.
−Removed: The Revolving Credit Facility issuance costs are included in assets in the accompanying Consolidated Balance Sheets, and as of December 27, 2024, issuance costs of $ 0.3 million remained unamortized.
+Added: In connection with the closing of the Amended and Restated Credit Facilities, the Company paid certain other fees and expenses.
+Added: The TLA will amortize quarterly in an amount equal to 5.0 % per annum beginning with the first full fiscal quarter ending after the Amended and Restated Credit Agreement Closing Date, with a final payment of all then remaining principal and interest due on the maturity date of May 5, 2030 .
+Added: Each borrowing under the Delayed Draw Term Loan will amortize in an amount equal to 5.0 % per annum of the aggregate outstanding borrowings under the Delayed Draw Term Loan, beginning with the first full fiscal quarter ending after the initial borrowing date, with a final payment of all then remaining principal and interest due on the maturity date of May 5, 2030 .
+Added: The amounts outstanding under the Amended and Restated Credit Facilities may be prepaid in whole or in part at any time without penalty (other than customary breakage costs).
WILLDAN GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
+Added: The TLA issuance costs are amortized to interest expense over the term of the TLA, and as of January 2, 2026, issuance costs of $ 0.3 million remained unamortized.
+Added: The Revolving Credit Facility unamortized issuance costs are included in assets in the accompanying consolidated balance sheets, and as of January 2, 2026, consisted of $ 0.6 million.
Willdan Group, Inc.
−Removed: is the borrower under the Credit Agreement and its obligations under the Credit Agreement are guaranteed by its present and future domestic subsidiaries (other than inactive subsidiaries).
+Added: is the borrower under the Amended and Restated Credit Agreement and its obligations under the Amended and Restated Credit Agreement are guaranteed by its present and future domestic subsidiaries (other than inactive subsidiaries).
In addition, subject to certain exceptions, all such obligations are secured by substantially all of the assets of Willdan Group, Inc.
and the subsidiary guarantors (other than inactive subsidiaries).
−Removed: The Credit Agreement requires compliance with financial covenants, including a maximum Net Leverage Ratio and a minimum Fixed Charge Coverage Ratio (as defined in the Credit Agreement).
−Removed: The Credit Agreement also contains customary restrictive covenants, including (i) restrictions on the incurrence of additional indebtedness and additional liens on property, (ii) restrictions on permitted acquisitions and other investments and (iii) limitations on asset sales, mergers and acquisitions.
−Removed: Further, the Credit Agreement limits the Company’s payment of future dividends and distributions and share repurchases by the Company.
−Removed: Subject to certain exceptions, the borrowings under the Credit Agreement are also subject to mandatory prepayment from (a) any issuances of debt or equity securities, (b) any sale or disposition of assets, (c) insurance and condemnation proceeds, and (d) a percentage of excess cash flow.
−Removed: The Credit Agreement includes customary events of default.
−Removed: The Company believes that, as of December 27, 2024, it was in compliance with all covenants contained in the Credit Agreement.
−Removed: As of December 27, 2024 the Company’s composite annual interest rate, exclusive of the effects of upfront fees, undrawn fees and issuance cost amortization, was 6.4 % and $ 1.6 million in letters of credit were issued.
+Added: The Amended and Restated Credit Agreement requires compliance with financial covenants, including a maximum Net Leverage Ratio and a minimum Fixed Charge Coverage Ratio (as defined in the Credit Agreement).
+Added: The Amended and Restated Credit Agreement also contains customary restrictive covenants, including (i) restrictions on the incurrence of additional indebtedness and additional liens on property, (ii) restrictions on permitted acquisitions and other investments and (iii) limitations on asset sales, mergers and acquisitions.
+Added: Further, the Amended and Restated Credit Agreement limits the Company’s payment of future dividends and distributions and share repurchases by the Company.
+Added: Subject to certain exceptions, the borrowings under the Amended and Restated Credit Agreement are also subject to mandatory prepayment from (a) any issuances of debt or equity securities, (b) any sale or disposition of assets, (c) insurance and condemnation proceeds, and (d) a percentage of Excess Cash Flow, as defined in the Amended and Restated Credit Agreement.
+Added: The Amended and Restated Credit Agreement includes customary events of default.
+Added: As of January 2, 2026, the Company was in compliance with all these covenants contained in the Amended and Restated Credit Agreement.
+Added: In addition, as of January 2, 2026, the Company’s composite annual interest rate, exclusive of the effects of upfront fees, undrawn fees and issuance cost amortization, was 5.3 % and $ 1.6 million in letters of credit were issued.
Other Debt Agreements
−Removed: The Company’s other debt agreements generally are comprised of financed insurance premiums, a financed software agreement, and a utility customer agreement, and are immaterial to the Company’s Consolidated Financial Statements.
+Added: The Company’s other debt agreements generally are comprised of financed insurance premiums, financed software agreements, and a utility customer agreement, and are immaterial to the Company’s Consolidated Financial Statements.
Future Debt Payments
−Removed: The following table summarizes the combined principal installments for the Company’s debt obligations, excluding capital leases, over the next five years and beyond, as of December 27, 2024 ( in thousands ):
+Added: The following table summarizes the combined principal installments for the Company’s debt obligations, excluding capital leases, over the next five years and beyond, as of January 2, 2026 ( in thousands ):
Total debt maturities
4 unchanged sentences
GOODWILL AND OTHER INTANGIBLE ASSETS
−Removed: The Company’s goodwill primarily relates to the Energy segment and the acquisitions within this segment of E3, Inc., Lime Energy, NAM, Integral Analytics and Abacus Resource Management Company (“Abacus”) and substantially all of the assets of Enica, Onsite Energy, The Weidt Group, Genesys and 360 Energy Engineers, LLC (“360 Energy”).
−Removed: The remaining goodwill relates to the Engineering and Consulting reporting segment and the acquisition within this segment of Economists LLC.
+Added: The Company’s goodwill primarily relates to the Energy segment and the historical acquisitions within this segment which includes the fiscal year 2025 acquisition of Alternative Power Generation, as well as the fiscal year 2024 acquisition of substantially all of the assets of Enica.
+Added: The remaining goodwill relates to the Engineering and Consulting reporting segment and the historical acquisitions within this segment which includes the fiscal year 2025 acquisition of Compass Municipal Advisors and Alpha.
The changes in the carrying value of goodwill by reporting unit were as follows:
10 unchanged sentences
In addition to the Company’s annual test, it regularly evaluates whether events and circumstances have occurred that may indicate a potential impairment of goodwill.
−Removed: No impairment was recorded in any year during the three-year period ended December 27, 2024.
+Added: No impairment was recorded in any year during the three-year period ended January 2, 2026.
The gross amounts and accumulated amortization of the Company’s acquired identifiable intangible assets with finite useful lives, included in other intangible assets, net in the accompanying consolidated balance sheets, were as follows:
−Removed: December 27, 2024
+Added: January 2, 2026
December 27, 2024
4 unchanged sentences
Total intangible assets
−Removed: At the time of acquisition, the Company estimates the fair value of the acquired identifiable intangible assets based upon the facts and circumstances related to the particular intangible asset.
−Removed: Inherent in such estimates are judgments and estimates of future revenue, profitability, cash flows and appropriate discount rates for any present value calculations.
−Removed: The Company preliminarily estimates the value of the acquired identifiable intangible assets and then finalizes the
WILLDAN GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
−Removed: estimated fair values during the purchase allocation period, which does not extend beyond 12 months from the date of acquisition.
+Added: At the time of acquisition, the Company estimates the fair value of the acquired identifiable intangible assets based upon the facts and circumstances related to the particular intangible asset.
+Added: Inherent in such estimates are judgments and estimates of future revenue, profitability, cash flows and appropriate discount rates for any present value calculations.
+Added: The Company preliminarily estimates the value of the acquired identifiable intangible assets and then finalizes the estimated fair values during the purchase allocation period, which does not extend beyond 12 months from the date of acquisition.
The Company’s amortization expense for acquired identifiable intangible assets with finite useful lives was $ 9.8 million, $ 7.2 million, and $ 10.1 million for the fiscal years 2025, 2024 and 2023, respectively.
7 unchanged sentences
In addition, the Company is obligated under finance leases for certain furniture and office equipment that expire at various dates through the year 2029.
−Removed: On December 29, 2018, the Company adopted ASU No.
−Removed: 2016-02, Leases (Topic 842) using the modified retrospective method.
−Removed: Under this guidance, the net present value of future lease payments is recorded as right-of-use assets and lease liabilities.
−Removed: In addition, the Company elected the ‘package of practical expedients ’ permitted under the transition guidance within the new standard, which among other things, allowed the Company to carry forward the historical lease classification.
−Removed: In addition, the Company elected not to utilize the hindsight practical expedient to determine the lease term for existing leases.
−Removed: The Company elected the short-term lease recognition exemption for all leases that qualify.
−Removed: This means, for those leases that qualify, the Company did not recognize right-of-use assets or lease liabilities, including not recognizing right-of-use assets or lease liabilities for existing short-term leases of those assets in transition.
−Removed: The Company also elected the practical expedient to not separate lease and non-lease components for our facilities leases.
From time to time, the Company enters into non-cancelable leases for some of its facility and equipment needs.
4 unchanged sentences
Additionally, all of the Company’s month-to-month leases are cancelable by the Company or the lessor, at any time, and are not included in the Company’s right-of-use asset or lease liability.
−Removed: As of December 27, 2024, the Company had no leases with residual value guarantees.
+Added: As of January 2, 2026, the Company had no leases with residual value guarantees.
Typically, the Company has purchase options on the equipment underlying its long-term leases.
13 unchanged sentences
The right-of-use asset also includes any lease payments made and initial direct costs incurred at lease commencement and excludes lease incentives.
−Removed: The Company’s lease terms
+Added: The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option.
+Added: Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term.
WILLDAN GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
−Removed: may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option.
−Removed: Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term.
The following is a summary of the Company’s lease expense:
37 unchanged sentences
Operating leases
−Removed: The following is a summary of the Company’s maturities of lease liabilities as of December 27, 2024:
+Added: The following is a summary of the Company’s maturities of lease liabilities as of January 2, 2026:
(in thousands)
36 unchanged sentences
In addition, the Company concluded there is no noncontrolling interest related to the consolidation of Genesys because the Company determined that (i) the shareholder of Genesys does not have more than a nominal amount of equity investment at risk, (ii) WES absorbs the expected losses of Genesys through its deferral of Genesys’s service fees owed to WES and the Company has, since entering into the administrative services agreement, had to continuously defer service fees for Genesys, and (iii) the Company believes Genesys will continue to have a shortfall on payment of its service fees for the foreseeable future, leaving no expected residual returns for the shareholder.
−Removed: As of December 27, 2024, the Company had one VIE — Genesys.
+Added: As of January 2, 2026, the Company had one VIE — Genesys.
WILLDAN GROUP, INC.
3 unchanged sentences
The Company’s two segments are Energy and Engineering and Consulting, and the Company’s chief operating decision maker, which continues to be its chief executive officer, receives and reviews financial information in this format.
−Removed: As described in Note 2, “ Recent Accounting Pronouncements ”, in November 2023, the FASB issued ASU 2023-07.
+Added: In November 2023, the FASB issued ASU No.
+Added: 2023-07, “Segment Reporting (Topic 280):
+Added: Improvements to Reportable Segment Disclosures” (“ASU 2023-07”).
The Company retroactively adopted ASU 2023-07, which requires, for fiscal years beginning after December 15, 2023, the disclosure of significant segment expenses that are regularly provided to the CODM, along with a description of other segment items by reportable segment, and any additional measures of a segment's profit or loss used by the CODM when deciding how to allocate resources.
40 unchanged sentences
Segment assets (3)
+Added: (1) Amounts may not add to the totals due to rounding.
(2) “EBITDA”, defined as earnings before interest, taxes, depreciation and amortization, is a non-GAAP financial measure.
24 unchanged sentences
(3) Revenue from the Company’s foreign operations were immaterial for fiscal years 2025, 2024, and 2023.
−Removed: The following sets forth the assets that are included in Unallocated Corporate as of December 27, 2024 and December 29, 2023.
+Added: The following sets forth the assets that are included in Unallocated Corporate as of January 2, 2026 and December 27, 2024.
(in thousands)
3 unchanged sentences
Prepaid expenses
−Removed: Intercompany receivables
Other receivables
Equipment and leasehold improvements, net
−Removed: Investments in subsidiaries
Deferred income taxes
4 unchanged sentences
Revenues from the Company’s Puerto Rican and Canadian operations were not material for fiscal years 2025, 2024, and 2023.
−Removed: Customer Concentration
−Removed: For fiscal years 2024, 2023, and 2022, the Company’s top 10 customers accounted for 51.3 %, 52.7 %, and 54.6 %, respectively, of the Company’s consolidated contract revenue.
−Removed: For fiscal year 2024, the Company had no individual customers that accounted for more than 10% of its consolidated contract revenue.
−Removed: For fiscal year 2023, the Company had no individual customers that accounted for more than 10% of its consolidated contract revenue.
WILLDAN GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
−Removed: year 2022, the Company derived 12.0 % of its consolidated contract revenue from one customer, Los Angeles Department of Water and Power (“LADWP”).
+Added: Customer Concentration
+Added: For fiscal years 2025, 2024, and 2023, the Company’s top 10 customers accounted for 50.7 %, 51.3 %, and 52.7 %, respectively, of the Company’s consolidated contract revenue.
+Added: For fiscal year 2025, the Company had individual customers that accounted for more than 10% of its consolidated contract revenue;
+Added: for fiscal year 2025, the Company derived 23.2 % of its consolidated contract revenue from two customers, Clark County School District and Southern California Edison.
+Added: For fiscal years 2024 and 2023, the Company had no individual customers that accounted for more than 10% of its consolidated contract revenue.
On a segment basis, the Company also had individual customers that accounted for more than 10% of its segment contract revenues.
+Added: For fiscal year 2025, the Company derived 27.4 % of its Energy segment revenues from two customers, Clark County School District and Southern Edison, and had no individual customers accounted for more than 10% of its Engineering and Consulting segment revenues.
For fiscal year 2024, the Company derived 10.7 % of its Energy segment revenues from one customer, Southern California Edison, and had no individual customers accounted for more than 10% of its Engineering and Consulting segment revenues.
−Removed: For fiscal year 2023, the Company derived 22.7 % of its Energy segment revenues from two customers, LADWP and the Dormitory Authority State of New York (“DASNY”), and had no individual customers accounted for more than 10% of its Engineering and Consulting segment revenues.
−Removed: For fiscal year 2022, the Company derived 14.4 % of its Energy segment revenues from one customer, LADWP, and had no individual customers that accounted for more than 10% of its Engineering and Consulting segment revenues.
−Removed: The Company’s largest clients are based in California and New York.
−Removed: In fiscal years 2024, 2023, and 2022, services provided to clients in California accounted for 43.9 %, 45.1 %, and 41.7 %, respectively, of the Company’s consolidated contract revenue, and services provided to clients in New York accounted for 23.6 %, 24.7 %, and 22.8 %, respectively, of the Company’s consolidated contract revenue.
+Added: For fiscal year 2023, the Company derived 22.7 % of its Energy segment revenues from two customers, Los Angeles Department of Water and Power (“LADWP”) and the Dormitory Authority State of New York (“DASNY”), and had no individual customers accounted for more than 10% of its Engineering and Consulting segment revenues.
+Added: The Company’s largest clients are based in California, New York, and Nevada.
+Added: In fiscal years 2025, 2024, and 2023, services provided to clients in California accounted for 43.5 %, 43.9 %, and 45.1 %, respectively, of the Company’s consolidated contract revenue, services provided to clients in New York accounted for 19.0 %, 23.6 %, and 24.7 %, respectively, of the Company’s consolidated contract revenue, and services provided to clients in Nevada accounted for 11.8 %, 8.2 %, and 0.3 %, respectively, of the Company’s consolidated contract revenue.
WILLDAN GROUP, INC.
11 unchanged sentences
The Company is generally not entitled to any tax deduction on the exercise of an incentive stock option.
−Removed: The 2006 Plan terminated in June 2016 and, as of December 27, 2024, there were no outstanding stock options under the 2006 Plan.
+Added: The 2006 Plan terminated in June 2016 and, as of January 2, 2026, there were no outstanding stock options under the 2006 Plan.
Amended and Restated 2008 Performance Incentive Plan
In March 2008, the Company’s board of directors adopted the 2008 Performance Incentive Plan (“2008 Plan”), and it received stockholder approval at the 2008 annual meeting of the stockholders in June 2008.
−Removed: The 2008 Plan was originally set to terminate on April 17, 2027 but received extensions at the 2019, 2022, 2023, and 2024 annual meetings of the stockholders.
+Added: The 2008 Plan was originally set to terminate on April 17, 2027 but received extensions through several annual meetings of the stockholders, the latest of which was the 2025 annual meeting of the stockholders.
The 2008 Plan is currently scheduled to expire on April 13, 2035.
−Removed: The 2008 Plan initially had 450,000 shares of common stock reserved for issuance (not counting any shares originally available under the 2006 Plan that “poured over”.) At the 2010, 2012, 2016, 2017, 2019, 2022, 2023, and 2024 annual meetings of the stockholders, the stockholders approved 350,000 , 500,000 , 500,000 , 875,000 , 955,000 , 478,000 , 750,000 , and 675,000 share increases, respectively, to the 2008 Plan.
+Added: The 2008 Plan initially had 450,000 shares of common stock reserved for issuance (not counting any shares originally available under the 2006 Plan that “poured over”) and, through several annual meetings of the stockholders, stockholders approved share increases to the 2008 Plan, the latest of which was the 2025 annual meeting of the stockholders approving a 150,000 share increases.
The maximum number of shares of the Company’s common stock that may be issued or transferred pursuant to awards under the 2008 Plan can also be increased by any shares subject to stock options granted under the 2006 Plan and outstanding as of June 9, 2008 which expire, or for any reason are cancelled or terminated, after June 9, 2008 without being exercised.
−Removed: The 2008 Plan currently has 1,138,000 shares of common stock reserved for issuance.
+Added: As of January 2, 2026, the 2008 Plan had 938,000 shares of common stock reserved for issuance.
Awards authorized by the 2008 Plan include stock options, stock appreciation rights, restricted stock, stock bonuses, stock units, performance stock, and other share-based awards.
7 unchanged sentences
Options and other awards provide for accelerated vesting if there is a change in control (as defined in the 2008 Plan) and the outstanding awards are not substituted or assumed in connection with the transaction.
−Removed: Through December 27, 2024, outstanding awards granted, net of forfeitures and exercises, under the 2008 Plan consisted of 24,000 shares of incentive stock options, 527,000 shares of nonqualified stock options, 146,000 shares of restricted stock awards, 70,000 shares of restricted stock units, and 168,000 shares of performance-based restricted stock units.
WILLDAN GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
+Added: Through January 2, 2026, outstanding awards granted, net of forfeitures and exercises, under the 2008 Plan consisted of 24,000 shares of incentive stock options, 376,000 shares of nonqualified stock options, 98,000 shares of restricted stock awards, 123,000 shares of restricted stock units, and 184,000 shares of performance-based restricted stock units.
Employee Stock Purchase Plan
14 unchanged sentences
The Company’s Amended and Restated 2006 Employee Stock Purchase Plan is a compensatory plan.
−Removed: As of December 27, 2024, there were 816,000 shares available for issuance under the ESPP.
+Added: As of January 2, 2026, there were 702,000 shares available for issuance under the ESPP.
Stock-based Compensation Expense
3 unchanged sentences
That expense is expected to be recognized over a weighted-average period of 1.0 years.
−Removed: The total unrecognized compensation expense related to RSUs was $ 1.4 million for fiscal year 2024.
−Removed: The Company did no t have any unrecognized compensation related to RSUs for fiscal years 2023 and 2022.
+Added: The total unrecognized compensation expense related to RSUs was $ 3.1 million and $ 1.4 million for fiscal years 2025 and 2024, respectively.
+Added: The Company did no t have any unrecognized compensation related to RSUs for fiscal year 2023.
That expense is expected to be recognized over a weighted-average period of 1.8 years.
5 unchanged sentences
Summary of Stock Option Activity
−Removed: A summary of option activity under the 2006 Plan and 2008 Plan as of December 27, 2024 and changes during the fiscal years ended December 27, 2024, December 29, 2023, and December 30, 2022 is presented below.
−Removed: The intrinsic value of the fully-vested options is $ 8.1 million based on the Company’s closing stock price of $ 38.41 and the weighted average exercise price of outstanding options on December 27, 2024.
+Added: A summary of option activity under the 2006 Plan and 2008 Plan as of January 2, 2026 and changes during the fiscal years ended January 2, 2026, December 27, 2024, and December 29, 2023 is presented below.
+Added: The intrinsic value of the fully-vested options is $ 32.3 million based on the Company’s closing stock price of $ 106.66 and the weighted average exercise price of outstanding options on January 2, 2026.
(in thousands)
1 unchanged sentence
Forfeited or expired
−Removed: Outstanding at December 27, 2024
−Removed: Vested and expected to vest at December 27, 2024
−Removed: Exercisable at December 27, 2024
+Added: Outstanding at January 2, 2026
+Added: Vested and expected to vest at January 2, 2026
+Added: Exercisable at January 2, 2026
(in thousands)
15 unchanged sentences
The Company’s time-based restricted stock is comprised of RSAs and RSUs.
−Removed: A summary of RSAs activity under the 2008 Plan as of December 27, 2024 is presented below:
+Added: A summary of RSAs activity under the 2008 Plan as of January 2, 2026 is presented below:
Weighted-Average
3 unchanged sentences
Outstanding at December 27, 2024
−Removed: Outstanding at December 27, 2024
+Added: Outstanding at January 2, 2026
Outstanding at December 29, 2023
2 unchanged sentences
Outstanding at December 29, 2023
−Removed: A summary of RSUs activity under the 2008 Plan as of December 27, 2024 is presented below.
−Removed: The Company did not grant, nor have any RSU activity, prior to fiscal year 2024:
+Added: A summary of RSUs activity under the 2008 Plan as of January 2, 2026 is presented below (1) :
Weighted-Average
3 unchanged sentences
Outstanding at December 27, 2024
+Added: Outstanding at January 2, 2026
Outstanding at December 29, 2023
+Added: Outstanding at December 27, 2024
+Added: (1) The Company did not grant, nor have any RSU activity, prior to fiscal year 2024.
WILLDAN GROUP, INC.
1 unchanged sentence
Summary of Performance-Based Restricted Stock Unit Activity
−Removed: A summary of performance-based restricted stock unit activity under the 2008 Plan as of December 27, 2024 is presented below:
+Added: A summary of performance-based restricted stock unit activity under the 2008 Plan as of January 2, 2026 is presented below:
Performance-Based
4 unchanged sentences
Outstanding at December 27, 2024
−Removed: Outstanding at December 27, 2024
+Added: Outstanding at January 2, 2026
Outstanding at December 29, 2023
11 unchanged sentences
No options were granted during fiscal years 2025, 2024, or 2023.
+Added: WILLDAN GROUP, INC.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
RSA, RSU and PBRSU Grants
2 unchanged sentences
Under the Company’s PBRSU design, 50 % of each award will vest based on the Company’s Adjusted EBITDA performance over a three-year performance period, and the remaining 50 % of each award will vest based upon the Company’s adjusted diluted earnings per share performance over a three-year performance period, respectively.
−Removed: At the end of the full three-year
−Removed: WILLDAN GROUP, INC.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
−Removed: vesting period for the grant, the number of PBRSUs that are earned based on the achievement of Adjusted EBITDA and Adjusted Diluted EPS is then multiplied by a percentage based on the Company’s Relative Total Shareholder Return for the three-year period.
+Added: At the end of the full three-year vesting period for the grant, the number of PBRSUs that are earned based on the achievement of Adjusted EBITDA and Adjusted Diluted EPS is then multiplied by a percentage based on the Company’s Relative Total Shareholder Return for the three-year period.
The fair value of ESPP purchase rights issued is calculated using the Black-Scholes valuation model that uses the assumptions noted in the following table.
7 unchanged sentences
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
+Added: On January 2, 2026 , the Company adopted ASU 2023-09, “Income Taxes (Topic 740):
+Added: Improvements to Income Tax Disclosures”.
+Added: ASU 2023-09 amends the rules on income tax disclosures to require entities to disclose specific categories in the rate reconciliation, the income or loss from continuing operations before income tax expense or benefit (separated between domestic and foreign) and income tax expense or benefit from continuing operations (separated by federal, state, and foreign).
+Added: ASU 2023-09 further requires entities to disclose their income tax payments to international, federal, state, and local jurisdictions, among other changes.
+Added: As permitted by ASU 2023-09, the Company adopted this standard on a prospective basis starting with its fiscal year 2025 annual reporting period.
The provision for income taxes is comprised of (1) :
9 unchanged sentences
(in thousands)
+Added: US federal statutory tax rate
+Added: State and local income taxes, net of federal income tax effect (1)
+Added: Research and development tax credit
+Added: Other - tax credits
+Added: Nontaxable and nondeductible items
+Added: Officer compensation
+Added: Stock compensation
+Added: Other - nondeductible items
+Added: Energy efficiency building deduction
+Added: Foreign tax effects
+Added: Effective tax rate
+Added: (1) The state and local jurisdiction that contribute to the majority (greater than 50%) of the tax effect in this category include California, New York State, and New York City.
+Added: WILLDAN GROUP, INC.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
+Added: (in thousands)
Computed “expected” federal income tax expense
6 unchanged sentences
Change in valuation allowance
−Removed: WILLDAN GROUP, INC.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
+Added: Provision for income taxes
+Added: Effective tax rate
+Added: The Company's effective tax rate includes the impact of discrete items such as the excess tax benefit on stock compensation deductions.
+Added: Stock compensation deductions are recognized in the period in which stock awards vest, or exercise, and are calculated as the difference between the recorded stock compensation expense and the amount realized at the vesting or exercise date.
+Added: In addition, the Company’s effective tax rate includes estimates related to deductions related to energy-efficiency building deduction under Section 179D.
+Added: These estimates are calculated based on the most readily available information including building-specific data, estimated project completion dates, estimated deduction rates, and related tax law guidance.
+Added: Changes related to estimates are recognized in the period in which they occur.
The tax effects of temporary differences that give rise to significant portions of the net deferred tax assets and liabilities are as follows:
17 unchanged sentences
Net deferred tax asset
−Removed: As of December 27, 2024, the Company had federal and state operating loss carryovers of $ 32.7 million and $ 66.5 million, respectively.
−Removed: As of December 27, 2024, the Company had a federal tax credit carryforward of $ 2.4 million, and an immaterial amount of state tax credit carryforward.
+Added: WILLDAN GROUP, INC.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
+Added: As of January 2, 2026, the Company had federal and state operating loss carryovers of $ 67.0 million and $ 78.6 million, respectively.
+Added: As of January 2, 2026, the Company had a federal tax credit carryforward of $ 4.2 million, and an immaterial amount of state tax credit carryforward.
The federal net operating losses begin to expire in 2028.
1 unchanged sentence
During each fiscal year, management assesses the available positive and negative evidence to estimate if sufficient future taxable income will be generated to utilize existing deferred tax assets.
+Added: During fiscal year 2025, no change was made to the tax valuation allowance as the available positive and negative evidence did not warrant for any changes.
During fiscal year 2024, $ 0.1 million of the valuation allowance was released due to expected future utilization of deferred tax assets.
−Removed: As of December 27, 2024 and December 29, 2023, the Company’s liabilities related to uncertain tax positions were immaterial to the consolidated financial statements.
+Added: As of January 2, 2026 and December 27, 2024, the Company’s liabilities related to uncertain tax positions were immaterial to the consolidated financial statements.
The Company may be subject to examination by the Internal Revenue Service (“IRS”) for calendar years 2022 through 2025 .
1 unchanged sentence
The Company's policy is to recognize interest and penalties related to unrecognized tax benefits in income tax expense.
−Removed: As of December 27, 2024 and December 29, 2023, the Company did no t have any unrecognized tax benefits.
+Added: As of January 2, 2026 and December 27, 2024, the Company did no t have any unrecognized tax benefits.
In addition, during the fiscal year 2025, the Company did no t have any additions or reductions of unrecognized tax benefits.
+Added: On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into law.
+Added: The legislation did not have a material impact on the Company's income tax expense for the year ended December 31, 2025.
+Added: In addition, OBBA did not have a material impact to the Company's effective income tax rate for 2025.
+Added: The OBBBA makes permanent some key tax provisions for tax year 2026, primarily the repeal of the energy-efficiency building deduction under Section 179D for property for which construction begins after June 30, 2026.
+Added: The cash paid for income taxes, net of refunds, during the year was as follows:
+Added: (in thousands)
+Added: State and Local
+Added: New York City
WILLDAN GROUP, INC.
11 unchanged sentences
Earnings (Loss) per share:
−Removed: For the fiscal year 2024 and fiscal year 2023, the Company excluded 71,000 and 363,000 common shares subject to outstanding equity awards, respectively, from the calculation of diluted shares because their impact would have been anti-dilutive.
−Removed: For the fiscal year 2022, the Company reported a net loss, and accordingly, all outstanding equity awards have been excluded from such periods because including them would have been anti-dilutive.
+Added: For the fiscal years 2025, 2024, and 2023, the Company excluded 4,000 , 71,000 and 363,000 common shares subject to outstanding equity awards, respectively, from the calculation of diluted shares because their impact would have been anti-dilutive.
WILLDAN GROUP, INC.
1 unchanged sentence
BUSINESS COMBINATIONS
−Removed: Acquisition of Enica Engineering, PLLC.
−Removed: On October 23, 2024 , (the “Enica Closing Date”), the Company, through its wholly owned subsidiary, WES, acquired substantially all of the assets of Enica Engineering, PLLC .
−Removed: (“Enica”), pursuant to the terms of the Asset Purchase Agreement, dated as of October 23, 2024 (the “Enica Agreement”), by and among the Company, WES, Genesys, Enica, and Reed Berinato (“Berinato”) and Mark Prewett (“Prewett” and, together with Berinato, the “Enica Members”).
−Removed: Enica is an energy efficiency company that provides an array of services around energy projects, metering, and consulting services to help its customers drive energy efficiency, decarbonization, and energy reduction.
−Removed: Enica’s financial information is included within the Company’s Energy segment beginning in the fourth quarter of fiscal year 2024.
−Removed: The Company expects to finalize the purchase price allocation related to this transaction by the end of the second quarter of fiscal year 2025.
−Removed: The Company agreed to pay (i) $ 12.0 million in cash on the Enica Closing Date (subject to holdbacks and adjustments) and (ii) up to $ 6.0 million in cash if Enica exceeds certain financial targets during the two years after the Enica Closing Date, as further described below (such potential payments of up to $ 6.0 million, being referred to as “Enica Earnout Payments” and $ 6.0 million in respect thereof, being referred to as the “Enica Maximum Earnout”);
−Removed: for a potential maximum purchase price of $ 18.0 million.
−Removed: The amount of the Enica Earnout Payments to be paid will be determined based on Enica’s earnings before interest, taxes, depreciation and amortization (“Enica’s EBITDA”).
−Removed: The Enica Members will receive Enica Earnout Payments in each of the two years after the Enica Closing Date (the “Earnout Period”) based on the amount by which Enica’s EBITDA exceeds certain targets.
−Removed: The amounts due to the Enica Members as Enica Earnout Payments will in no event, individually or in the aggregate, exceed the Enica Maximum Earnout.
−Removed: Enica Earnout Payments will be made in annual installments for each of the two years of the Enica Earnout Period.
−Removed: In addition, the Enica Earnout Payments will be subject to certain subordination provisions in favor of the lenders under the Company’s Credit Agreement.
−Removed: The Enica Agreement contains customary representations and warranties regarding the Company, WES, Genesys, Enica, and the Enica Members, indemnification provisions and other provisions customary for transactions of this nature.
−Removed: The Company used cash on hand to fund the initial purchase price on the Enica Closing Date.
+Added: Acquisition of Alternative Power Generation, Inc.
+Added: On March 3, 2025 (the “APG Closing Date”), the Company acquired all of the capital stock of Alternative Power Generation, Inc.
+Added: APG provides innovative, progressive, and customized electric power solutions for EV charging, solar, AI data centers, microgrids, battery energy storage systems (“BESS”), and substations.
+Added: APG offers consulting, design, engineering, procurement, and construction management.
+Added: APG’s financial information is included within the Energy segment beginning in the first quarter of fiscal year 2025.
+Added: The Company agreed to pay up to $ 43.5 million for the purchase of all the capital stock of APG, which purchase price consists of (i) $ 19.5 million in cash paid on the APG Closing Date (subject to holdbacks and adjustments), (ii) $ 6.0 million in shares of the Company’s common stock, based on the closing average price per share of the Company’s common stock for the twenty trading days preceding the APG Closing Date, and (iii) up to $ 18.0 million in cash if APG exceeds certain financial targets during the three years after the APG Closing Date.
+Added: The Company used cash on hand and restricted common stock to fund the initial purchase price on the APG Closing Date.
The acquisition was accounted for as a business combination in accordance with ASC 805.
Under ASC 805, the Company recorded the acquired assets and assumed liabilities at their estimated fair value with the excess allocated to goodwill.
−Removed: Goodwill represents the value the Company expects to achieve through the operational synergies, the expansion into new markets and the acquired company’s assembled work force.
−Removed: The Company estimates that the entire $ 9.8 million of goodwill resulting from the acquisition will be tax deductible.
−Removed: Preliminary consideration for the acquisition includes the following:
+Added: Goodwill represents the value the Company expects to achieve through the operational synergies, the expansion into new markets and APG’s assembled workforce.
+Added: The Company estimates that the entire goodwill balance resulting from the acquisition of APG will be tax deductible.
+Added: The Company engaged a third-party independent valuation specialist to assist in management’s determination of fair values of tangible and intangible assets acquired and liabilities assumed, including the determination of the fair value of the contingent consideration liability.
+Added: The Company’s third-party independent valuation specialist determined the fair value of the contingent consideration liability utilizing a Monte Carlo valuation model, which involves a simulation of future revenues during the earn out-period using management’s best estimates, or a probability-weighted discounted cash flow analysis.
+Added: Consideration for the acquisition of APG includes the following:
(in thousands)
1 unchanged sentence
Other working capital adjustments and holdbacks
+Added: Issuance of common stock
Contingent consideration
Total consideration
−Removed: (1) Of which $ 3.5 million is included within accrued liabilities in the Company’s consolidated balance sheet and the remainder is included within accounts payable in the Company’s consolidated balance sheet.
WILLDAN GROUP, INC.
4 unchanged sentences
Non-current assets (1)
−Removed: Right-of-use assets
−Removed: Lease liability
+Added: Non-current lease liability
Customer relationships
Net assets acquired
−Removed: (1) Excluded from non-current assets are right-of-use assets, backlog, customer relationships, tradename, and goodwill.
−Removed: During the fiscal year 2024, the Company did not make any adjustments to the consideration paid for Enica, and as a result, there were no adjustments to the purchase price allocation for the fiscal year ended December 27, 2024.
−Removed: Acquisition related costs associated with Enica are included in other general and administrative expenses in the consolidated statements of comprehensive income and were not material for the year ended December 27, 2024.
−Removed: The following unaudited pro forma financial information for the fiscal years ended December 27, 2024 and December 29, 2023 assumes that the acquisitions of substantially all of the assets of Enica occurred on the first day of the year prior to the year of acquisition:
+Added: (1) Excluded from non-current assets are backlog, customer relationships, tradename, and goodwill.
+Added: During the fiscal year 2025, the Company made adjustments, primarily related to other working capital adjustments and holdbacks, to the consideration paid for APG which resulted in an adjustment to the purchase price allocation of APG.
+Added: The adjustments resulted in an increase of $ 6.9 million in the net carrying value of backlog and goodwill, and an aggregate decrease of $ 5.3 million in the net carrying value of customer relationships, and tradename.
+Added: The change in the fair value of intangible assets resulted in a decrease in the amortization expense of $ 1.7 million to the consolidated financial statements for the fiscal year ended January 2, 2026.
+Added: For the fiscal year 2025, the acquisition related costs associated with APG were not material.
+Added: During the fiscal year 2025, the acquisition of APG contributed $ 27.3 million in revenue and contributed $ 1.3 million in income (loss) from operations.
+Added: Other 2025 Acquisitions
+Added: Acquisition of Compass Municipal Advisors, LLC
+Added: On January 2, 2026 , (the “Compass Closing Date”), the Company acquired all the equity of Compass Municipal Advisors, LLC .
+Added: Compass is a full service municipal advisory firm providing a broad range of financial services to municipalities across the Southeast.
+Added: Compass’ financial information is included within the Company’s Engineering and Consulting segment beginning in the last day of the Company’s fourth quarter of fiscal year 2025.
+Added: The Company agreed to pay (i) $ 3.5 million in cash on the Compass Closing Date (subject to holdbacks and adjustments) and (ii) up to $ 1.0 million in cash if Compass exceeds certain financial targets during the one year after the Compass Closing Date;
+Added: for a potential maximum purchase price of $ 4.5 million.
+Added: The Company used cash on hand to fund the initial purchase price on the Compass Closing Date.
+Added: The acquisition was accounted for as a business combination in accordance with ASC 805.
+Added: Under ASC 805, the Company recorded the acquired assets and assumed liabilities at their estimated fair value with the excess allocated to goodwill.
+Added: Goodwill represents the value the Company expects to achieve through the operational synergies, the expansion into new markets and Compass’ assembled workforce.
+Added: The Company estimates that the entire goodwill balance resulting from the acquisition will be tax deductible.
+Added: As of January 2, 2026, the preliminary consideration is comprised of $ 3.4 million in cash, $ 0.6 million in other working capital adjustments and holdbacks, and $ 0.9 million in contingent consideration.
+Added: The preliminary fair value of the contingent consideration liability was estimated by discounting to present value the contingent payments expected to be made.
+Added: The Company applied a discount rate derived from previous valuation studies performed by a third-party valuation firm for the Company’s historical acquisitions with similar characteristics.
+Added: The preliminary estimate of the fair
+Added: WILLDAN GROUP, INC.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
+Added: values for intangible assets were calculated utilizing a weighted average allocation derived from previous valuation studies performed by a third-party valuation firm for the Company’s historical acquisitions with similar characteristics.
+Added: As of January 2, 2026, the purchase price allocation is preliminary and subject to change within the measurement period (not to exceed twelve months following the Compass Closing Date) and is primarily comprised of $ 2.0 million in customer relationships, and $ 2.0 million in goodwill.
+Added: The areas of the purchase price allocation that are not yet finalized relate primarily to contingent consideration valuation, intangible assets, and goodwill.
+Added: The Company expects to continue to obtain information for the purpose of determining the fair value of the assets acquired on the Compass Closing Date throughout the remainder of the measurement period.
+Added: Accordingly, adjustments may be made as additional information is obtained about the facts and circumstances that existed as of the valuation date.
+Added: In addition, the Company expects to engage a third-party independent valuation specialist to assist in management’s determination of fair values of intangible assets acquired.
+Added: Any adjustments will be recorded in the period in which they are identified.
+Added: During the fiscal year 2025, the Company did not make any adjustments to the consideration paid for Compass, and as a result, there were no adjustments to the purchase price allocation for the fiscal year ended January 2, 2026.
+Added: For the fiscal year 2025, there were no acquisition related costs associated with Compass.
+Added: During fiscal year 2025, Compass’ contributions to revenue and net income were not material to the Company’s consolidated financial statements.
+Added: Acquisition of Alpha Inspections, Inc.
+Added: On January 31, 2025 (the “Alpha Closing Date”), the Company acquired all of the capital stock of Alpha Inspections, Inc.
+Added: Alpha is a company that provides an array of municipal services including building inspections, and plan reviews.
+Added: Alpha’s financial information is included within the Engineering and Consulting segment beginning in the first quarter of fiscal year 2025.
+Added: The Company agreed to pay $ 12.0 million to be paid in cash on the Alpha Closing Date (subject to holdbacks and adjustments).
+Added: The Company used cash on hand to fund the purchase price on the Alpha Closing Date.
+Added: The acquisition was accounted for as a business combination in accordance with ASC 805.
+Added: Under ASC 805, the Company recorded the acquired assets and assumed liabilities at their estimated fair value with the excess allocated to goodwill.
+Added: Goodwill represents the value the Company expects to achieve through the operational synergies, the expansion into new markets and Alpha’s assembled workforce.
+Added: The Company estimates that the entire goodwill balance resulting from the acquisition of Alpha will be tax deductible.
+Added: The Company engaged a third-party independent valuation specialist to assist in management’s determination of fair values of tangible and intangible assets acquired and liabilities assumed.
+Added: The finalized purchase price allocation is primarily comprised of $ 6.0 million in customer relationships and $ 4.9 million in goodwill.
+Added: During the fiscal year 2025, the Company made adjustments, primarily related to other working capital adjustments and holdbacks, to the consideration paid for Alpha, which resulted in an adjustment to the purchase price allocation of Alpha.
+Added: The adjustments resulted in an aggregate increase of $ 3.6 million in the net carrying value of customer relationships and non-current assets, and an aggregate decrease of $ 3.5 million in the net carrying value of backlog, tradename, liabilities, and goodwill.
+Added: The change in the fair value of intangible assets resulted in a decrease of $ 0.1 million in the amortization expense for the fiscal year ended January 2, 2026.
+Added: For the fiscal year 2025, the acquisition related costs associated with Alpha included in other general and administrative expenses in the consolidated statements of comprehensive income were not material.
+Added: During fiscal year 2025, Alpha’s contributions to revenue and net income were not material to the Company’s consolidated financial statements.
+Added: WILLDAN GROUP, INC.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
+Added: The following unaudited pro forma financial information for the fiscal years ended January 2, 2026 and December 27, 2024, assumes that the acquisitions of all the outstanding shares of Compass, APG, and Alpha, occurred on the first day of the year prior to the year of acquisition:
(in thousands, except per share data)
5 unchanged sentences
(1) Adjustments to pro forma net income include income from operations, amortization and interest expenses.
−Removed: This pro forma supplemental information does not purport to be indicative of what the Company’s operating results would have been had the acquisitions of substantially all of the assets of Enica occurred on the first day of the year prior to the year of acquisition and may not be indicative of future operating results.
−Removed: During fiscal year 2024, the acquisition of Enica contributed $ 1.8 million in revenue and $ 0.4 million of income from operations.
+Added: This pro forma supplemental information does not purport to be indicative of what the Company’s operating results would have been had these acquisitions occurred on the first day of the year prior to the year of acquisition and may not be indicative of future operating results.
+Added: During fiscal year 2025, the acquisitions of Compass, APG, Alpha, contributed $ 30.4 million in revenue, and contributed $ 3.4 million in income (loss) from operations.
WILLDAN GROUP, INC.
13 unchanged sentences
QUARTERLY FINANCIAL INFORMATION (UNAUDITED)
−Removed: The tables below reflect selected quarterly information for the fiscal years ended December 27, 2024 and December 29, 2023.
+Added: The tables below reflect selected quarterly information for the fiscal years ended January 2, 2026 and December 27, 2024.
Fiscal Three Months Ended
−Removed: September 27,
(in thousands except per share amounts)
18 unchanged sentences
In accordance with ASC Topic 855, Subsequent Events, the Company evaluates subsequent events up until the date the consolidated financial statements are issued.
−Removed: Alpha Inspections, Inc.
−Removed: On January 31, 2025 (the “Alpha Closing Date”), the Company, through its wholly owned subsidiary, Willdan Engineering, Inc., acquired all of the capital stock of Alpha Inspections, Inc.
−Removed: (“Alpha”), pursuant to the terms of the Stock Purchase Agreement, dated as of January 31, 2025 (the “Alpha Stock Purchase Agreement”), by and among the Company, Willdan Engineering, Inc., and Jennifer Murphy as the sole shareholder of Alpha Inspections, Inc.
−Removed: (the “Alpha Member”).
−Removed: Pursuant to the terms of the Alpha Stock Purchase Agreement, the purchase price consisted of $ 12.0 million to be paid in cash on the Alpha Closing Date (subject to holdbacks and adjustments).
−Removed: The Alpha Stock Purchase Agreement contains customary representations and warranties regarding the Company, Willdan Engineering, Alpha, and the Alpha Member, indemnification provisions and other provisions customary for transactions of this nature.
−Removed: Pursuant to the terms of the Alpha Stock Purchase Agreement, the Company, and Willdan Engineering, provided guarantees to the Alpha Member which guarantee certain of Alpha’s obligations under the Alpha Stock Purchase Agreement.
−Removed: The Company used cash on hand to fund the purchase price.
−Removed: Alpha is a company that provides an array of municipal services including building inspections, and plan reviews.
−Removed: Alpha’s financial information will be included within the Engineering and Consulting segment beginning in the first quarter of fiscal year 2025 and the Company expects to finalize the purchase price allocation related to this transaction by the end of the fourth quarter of fiscal year 2025.
−Removed: Alternative Power Generation, Inc.
−Removed: On March 3, 2025 (the “APG Closing Date”), the Company, through its wholly owned subsidiary, WES, acquired all of the capital stock of Alternative Power Generation, Inc.
−Removed: (“APG”), pursuant to the terms of the Stock Purchase Agreement, dated as of March 3, 2025 (the “APG Stock Purchase Agreement”), by and among the Company, WES, and each of the stockholders of APG (the “APG Stockholders”).
−Removed: Pursuant to the terms of the APG Stock Purchase Agreement, the Company agreed to pay up to $ 43.5 million for the purchase of all the capital stock of APG, which purchase price consists of (i) $ 19.5 million in cash paid on the APG Closing Date (subject to holdbacks and adjustments), (ii) $ 6.0 million in shares of the Company’s common stock, based on the closing average price per share of the Company’s common stock for the twenty trading days preceding the APG Closing Date, and (iii) up to $ 18.0 million in cash if APG exceeds certain financial targets during the three years after the APG Closing Date, as more fully described below (such potential payments of up to $ 18.0 million being referred to as “APG Earnout Payments” and $ 18.0 million in respect thereof, being referred to as the “APG Maximum Payout”).
−Removed: The amount of the APG Earnout Payments to be paid will be determined based on APG’s earnings before interest, taxes, depreciation and amortization (“APG EBITDA”).
−Removed: The APG Stockholders will receive APG Earnout Payments in each of the three years after the APG Closing Date (the “APG Earnout Period”) based on the amount by which APG EBITDA exceeds certain targets.
−Removed: The amounts due to the APG Stockholders as APG Earnout Payments will in no event, individually or in the aggregate, exceed the APG Maximum Payout.
−Removed: APG Earnout Payments will be made in annual installments for each of the three years of the APG Earnout Period.
−Removed: In addition, the APG Earnout Payments will be subject to certain subordination provisions in favor of the lenders under the Company’s Credit Agreement.
−Removed: WILLDAN GROUP, INC.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
−Removed: The APG Stock Purchase Agreement contains customary representations and warranties regarding the Company, WES, APG, and the APG Stockholders, indemnification provisions, and other provisions customary for transactions of this nature.
−Removed: The Company used cash on hand to fund the initial purchase price.
−Removed: APG provides innovative, progressive, and customized electric power solutions for EV charging, solar, AI data centers, microgrids, battery energy storage systems (BESS), and substations.
−Removed: APG offers consulting, design, engineering, procurement, and construction management.
−Removed: APG’s financial information will be included within the Energy segment beginning in the first quarter of fiscal year 2025 and the Company expects to finalize the purchase price allocation related to this transaction by the end of the fourth quarter of fiscal year 2025.
+Added: As of February 26, 2026, there were no subsequent events required to be reported.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
−Removed: There were no changes in and/or disagreements with accountants on accounting and financial disclosure during the fiscal year ended December 27, 2024.
+Added: There were no changes in and/or disagreements with accountants on accounting and financial disclosure during the fiscal year ended January 2, 2026.
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.