What changed in this filing

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Item 1. Business

2023-03-10 compared with 2022-03-11 · 75 added, 59 removed, 331 unchanged (29% of the section changed)

9 unchanged sentences

We operate our business through a nationwide network of offices spread across 22 states, the District of Columbia, and the Canadian province of Alberta.

We serve the majority of the largest investor-owned electric utilities and over half of the largest municipal utilities in the United States (“U.S.”).

We serve a majority of the largest investor-owned electric utilities and over half of the largest municipal utilities in the United States (“U.S.”).

Our business with public and private utilities has concentrations in California and New York, but includes numerous other utilities in the Midwest, Southeast and Mountain states and additional acquisitions may continue to expand our geographic footprint.

2 unchanged sentences

Our broad portfolio of services operates within two financial reporting segments:

(1) Energy and (2) Engineering and Consulting.

(i) Energy and (ii) Engineering and Consulting.

The interfaces and synergies between these segments are important elements of our strategy to design and deliver trusted, comprehensive, innovative, and proven solutions and services for our customers.

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State and local governments frequently turn to specialized resource conservation firms to help strike the balance between environmental responsibility and economic competitiveness.

The use of energy efficiency services, including audits, program design, benchmark analysis, metering and incentivized sale and installation of energy efficiency measures provides public agencies, utilities, and commercial/industrial firms with the ability to realize long-term energy savings and greenhouse gas reductions.

services to contract providers, rather than maintain the necessary staff and resources to provide such services themselves.

The use of energy services, including audits, program design, benchmark analysis, metering and incentivized sale and installation of energy efficiency measures provides public agencies, utilities, and commercial/industrial firms with the ability to realize long-term energy savings and greenhouse gas reductions.

The engineering and consulting market has grown as public agencies and utilities, as well as private utilities and commercial/industrial firms, find it more efficient to outsource design, construction oversight, advisory, and training services to contract providers, rather than maintain the necessary staff and resources to provide such services themselves.

For example, we serve as municipal engineers and building and safety departments for local governments.

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We believe the market for these services is, and will be, driven by a number of factors, including:

● Demand for services and solutions that provide energy efficiency, greenhouse gas reduction, sustainability, water conservation, infrastructure development and renewable energy in the public and private sectors;

● Demand for services and solutions that provide energy efficiency, greenhouse gas reduction, sustainability, electrification, water conservation, infrastructure development and renewable energy in the public and private sectors;

● Changes in technology that affect the generation, distribution and consumption of energy;

5 unchanged sentences

We offer services in two financial reporting segments:

(1) Energy and (2) Engineering and Consulting.

(i) Energy and (ii) Engineering and Consulting.

Management established these segments based upon the services provided, the different marketing strategies associated with these services, and the specialized needs of their respective clients.

1 unchanged sentence

Engineering and Consulting

During fiscal year 2021, we derived 34.5% of our Energy segment contract revenues from three customers;

the Los Angeles Department of Water and Power (“LADWP”), Duke Energy, and Consolidated Edison of New York, and we derived 10.3% of our Engineering and Consulting segment contract revenues from one customer;

the City of Elk Grove.

For further information related to our financial reporting segments, see Part II, Item 8, Note 9, Segment Information and Geographical Information , of the Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K.

Energy Efficiency Services

During fiscal year 2022, we derived 14.4% of our Energy segment contract revenues from one customer;

the Los Angeles Department of Water and Power (“LADWP”), and had no individual customers that accounted for more than 10% of our Engineering and Consulting segment revenues.

For further information related to our financial reporting segments, see Part II, Item 8, Note 9, Segment and Geographical Information , of the Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K.

Energy Services

Our Energy segment provides specialized, innovative, comprehensive energy solutions to businesses, utilities, state agencies, municipalities, and non-profit organizations.

Our experienced engineers, consultants, and staff help our clients realize cost and energy savings by tailoring efficient and cost-effective solutions to assist in optimizing energy spend.

Our energy efficiency services include comprehensive audit and surveys, program design, master planning, demand reduction, grid optimization, benchmarking analyses, design engineering, construction management, performance contracting, installation, alternative financing, measurement and verification services, and advances in software and data analytics for long term planning.

Our energy efficiency services include the following:

Our energy services include comprehensive audit and surveys, program design, master planning, demand reduction, grid optimization, benchmarking analyses, design engineering, construction management, performance contracting, installation, alternative financing, measurement and verification services, and advances in software and data analytics for long term planning.

Our energy services include the following:

Energy Efficiency.

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(“Genesys”) in March 2016, we entered into an administrative services agreement with Genesys pursuant to which we, through our subsidiary Willdan Energy Solutions (“WES”), provide Genesys with ongoing administrative, operational and other non-professional support services in its performance of rehabilitation, construction management, architectural, and engineering services at various college and university sites within New York State.

Services for DASNY under these contracts also include energy efficient design, utility cost evaluation, and various regulatory compliance services.

DASNY under these contracts also include energy efficient design, utility cost evaluation, and various regulatory compliance services.

Specific project descriptions are set out by DASNY in work authorizations, which are issued under the terms of the master contracts.

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● Entergy Corporation, Louisiana.

We supported Entergy’s investments in grid data and analytics capabilities across its electric distribution footprint through a software license for LoadSEER, the modeling application of Integral Analytics.

We supported Entergy’s investments in grid data and analytics capabilities across its electric distribution footprint through a software license for LoadSEER.

LoadSEER was developed to provide unique insights and modeling capability for distributed energy resources and the evolving distribution grid.

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and multiple data sources in order to deliver dynamic, granular load profiles and perform valuation analyses.

● Multifamily, Commercial, and Industrial Energy Efficiency Programs.

● Commercial Energy Efficiency Programs.

Southern California Edison has contracted with us to develop, implement, and offer these programs to SCE customers.

We are the implementer of the Comprehensive Multifamily, Commercial, and Industrial Programs, which are targeted to help SCE customers lower their energy bills and reduce demand and energy usage by providing technical services, connection to financing, and financial incentives to identify and install energy efficiency measures.

We are the implementer of the Commercial Program, which is targeted to help SCE customers lower their energy bills and reduce demand and energy usage by providing technical services, connection to financing, and financial incentives to identify and install energy efficiency measures.

To support this effort, we provide full-service program implementation, including customer outreach, performing energy audits, and facilitating installation and verifying savings of approved energy efficiency measures.

36 unchanged sentences

For several cities, we provide contract staff support, which ranges from staffing entire departments to providing interim or long-term services to entities that have determined that it is not cost-effective to have a full-time engineer on staff, to relieve peak workload situations or to fill vacant positions during a job search.

Typical assignments include land use studies, development of

specific plans or general plan elements, design guidelines, and zoning ordinances.

Typical assignments include land use studies, development of specific plans or general plan elements, design guidelines, and zoning ordinances.

We also provide surveying and mapping services, including major construction layout, design survey, topographic survey, aerial mapping, Geographic Information Systems, and right-of-way engineering.

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We provided comprehensive technical support to the Public Works and Development Services Departments for the over 170,000-resident community of Elk Grove, California.

Our services have included public counter

service, drainage/stormwater/NPDES, traffic engineering, permitting, land development review and inspection, CIP design and construction support.

Our services have included public counter service, drainage/stormwater/NPDES, traffic engineering, permitting, land development review and inspection, CIP design and construction support.

Serving the two City departments was a team of full-time engineers, scientists, managers, observers/inspectors, project managers, administrative support staff, and a team of subconsultants.

29 unchanged sentences

however, several of our construction management service contracts exceed $20,000,000 and range up to $90,000,000 in construction value.

In addition, many of our multi-year utility program management contracts exceed $10,000,000 and our largest single contract has the capacity to provide up to, and in excess, of $380,000,000 in revenue over a period of five years for the implementation of energy efficiency measures in commercial facilities.

In addition, many of our multi-year utility program management contracts exceed $10,000,000 and, two of our largest contracts provide contract limits in excess of $100,000,000 in revenue over a period of five years for the management of utility incentive programs for the implementation of energy efficiency measures.

Our contracts typically have a duration of between two and thirty-six months, although we have city services contracts that have been renewed or re-awarded and in effect for over 30 years.

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On average, this program typically implements approximately 8,000 energy efficiency projects a year and has implemented over 100,000 projects since program inception in 2008.

Over that time, we have saved LADWP and its customers over 549,000 MWh per year and 108 MW of peak demand and also provided lead generation identifying roughly 10,000 water efficiency upgrades.

In 2013, Lime Energy, which we acquired in fiscal year 2018, collaborated with Duke Energy - Progress to launch the first ever small business direct install program in North Carolina and South Carolina.

Since its launch, the program has grown to encompass all eligible Duke Energy customers in North Carolina, South Carolina, Ohio, Indiana, and Kentucky.

Over that time, we have saved the LADWP and its customers over half a million MWh per year and almost one hundred MW of peak demand and also provided lead generation identifying roughly 10,000 water efficiency upgrades.

We also collaborate with Duke Energy - Progress to manage the small business direct install program in North Carolina and South Carolina.

Since its launch in 2013, the program has grown to encompass all eligible Duke Energy customers in North Carolina, South Carolina, Indiana, and Kentucky.

The Small Business Energy Saver Program offers eligible commercial customers the opportunity to retrofit a comprehensive list of existing inefficient equipment with more energy-efficient measures.

The program provides integrated turn-key services including program marketing, energy assessments, installation by local contractors, up to 80 percent incentives to offset the cost of projects, and education to encourage the replacement of existing equipment with improvements in lighting, refrigeration, and HVAC.

We continue to implement programs across these five states and have completed over 25,000 projects for Duke Energy resulting in over 780,000 MWh in savings to small businesses.

We continue to implement programs across these four states and have completed over 28,000 projects for Duke Energy resulting in over 840,000 MWh in savings to small businesses.

In January 2017, we announced a new three-year contract with Consolidated Edison to implement Consolidated Edison’s Small and Medium Business Direct Install (“SMB”) program across the utility's New York City and Westchester County service area.

It continues the process of diversifying the program offerings.

After giving effect to renewals, the Consolidated Edison contract continues through the end of 2022.

After giving effect to renewals and extensions, the Consolidated Edison contract continues through the end of 2023.

The SMB program, Consolidated Edison's largest energy efficiency program, helps customers save energy, lower their bills and protect the environment by providing financial incentives to identify and buy down the cost of energy efficiency measures.

5 unchanged sentences

Under such administrative services agreement, WES provides administrative services for a series of Genesys’s DASNY and other contracts.

WES provides administrative services to Genesys in its performance of rehabilitation and construction work and architectural and

engineering services at various sites within New York State.

WES provides administrative services to Genesys in its performance of rehabilitation and construction work and architectural and engineering services at various sites within New York State.

Services for DASNY under these contracts also include energy efficient design, utility cost evaluation and review, and various regulatory compliance services.

1 unchanged sentence

The termination dates of the DASNY contracts vary;

the latest of which is April 2024.

the latest of which is November 2026.

Work authorized but not yet completed under this contract continues to be bound by the terms of the agreement beyond the termination date until completion of the projects.

Genesys expects to receive an amendment from DASNY to the master contract extending the termination date under DASNY’s option to extend this contract term twice, one year at a time.

Genesys expects to continue to receive amendments from DASNY to the master contract extending the termination date under DASNY’s option to extend this contract term twice, one year at a time.

DASNY may at any time terminate any of the contracts or suspend all projects, for its convenience and without cause.

17 unchanged sentences

Our contracts come up for renewal periodically and, at the time of renewal, may be subject to renegotiation or recompetition, which could impact the profitability on that contract.

In addition, during the term of a contract, public

agencies may request additional or revised services which may impact the economics of the transaction.

In addition, during the term of a contract, public agencies may request additional or revised services which may impact the economics of the transaction.

Most of our contracts permit our clients, with prior notice, to terminate the contracts at any time without cause.

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We often compete with many other firms ranging from small local firms to large international firms.

Contract awards are based primarily on qualifications, relevant experience, staffing capabilities, geographic presence, financial stability and price.

We face strong competition primarily from other regional, national, and international providers of energy efficiency and sustainability consulting services, local electrical and mechanical contractors and engineering firms, lighting and lighting fixture manufacturers and lighting fixture distributors.

Contract awards are based primarily on qualifications, relevant experience, staffing capabilities, geographic presence, financial stability, customer service, and price.

In addition to our existing competitors, new competitors such as large national or international engineering and/or construction companies could enter our markets.

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We believe that the ability to understand these requirements and to successfully conduct business with utilities, governmental entities and agencies is a barrier to entry for potential competitors.

Unlike some of our competitors, we focus our services on utilities and public sector clients.

Unlike some of our competitors, we focus our services on utilities and public sector clients and generally exclude residential services.

Utility and public sector clients generally choose among competing firms by weighing the quality, experience, innovation and timeliness of the firm’s services.

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commercial general liability, automobile liability, workers’ compensation and employer’s liability, cyber liability, professional liability and umbrella/excess liability.

However, if any claims, settlements, or judgements, individually or in the aggregate, exceed our policy limits, we are liable to pay these claims from our assets.

However, if any claims, settlements, or judgements, individually or in

the aggregate, exceed our policy limits, we are liable to pay these claims from our assets.

We believe our coverage limits reasonably protect us from any material adverse impact that may arise from these insured risks.

6 unchanged sentences

As a professional services company, our continuing success relies on attracting, developing, and retaining a workforce that is both technically excellent and responsive to the needs of our clients and customers.

An integral part of our ability to attract and retain qualified talent depends on our ability to maintain a culture reflective of the diverse communities we serve.

An integral part of our ability to attract and retain qualified talent depends on our ability to maintain a culture reflective of the diverse communities that we serve.

Our Workforce

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Diversity, Equity and Inclusion

Our goal is to maintain a culture of acceptance and individuality, where all employees feel respected, included, and encouraged to bring their unique perspectives, ideas, and skills to work each day.

Our culture is focused on hiring, empowering, and retaining highly talented employees and professionals with the diverse background and expertise required to develop solutions for the current and future energy and infrastructure challenges.

Willdan has a culture of acceptance and individuality, where all employees feel respected, included, and encouraged to contribute their unique perspectives, develop innovative ideas, and bring their best skills to work each day.

We value the richness that diversity and inclusion bring to our workforce and are proud that our employees represent various races, genders, ages, national origins, and points of view.

To encourage more diverse and talented people to join our team, we partner with professional organizations that represent and support a diverse pool of applicants.

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At Willdan, we believe that we can better serve all communities by utilizing qualified employees, suppliers, and subcontractors that mirror the culture and demographics of the communities where we live and work.

In 2020, we established Willdan’s Diversity, Equity, and Inclusion (“DE&I”) Working Group which identified initial goals and objectives focused on two key areas:

1) conducting a multi-pronged analysis of employee recruitment, development, engagement, and community outreach;

and 2) developing and tracking key performance indicators and progress toward DE&I objectives.

During fiscal year 2021, as part of our ongoing effort within our DE&I Working Group, we conducted a company-wide employee engagement survey.

We have analyzed the results from that survey and have begun instituting action committees aimed at implementing the feedback received.

In addition, we developed human capital metrics, such as employee gender ratios and other demographic information, aimed at expanding our employee recruitment effort and have expanded the roster of universities in which we conduct recruiting activities.

As part of our community outreach, in the beginning of 2020 we established and financed the Willdan Clean Energy Academy (“WCEA”) which offers free training in energy efficiency skills to disadvantaged workers in the New York City area.

We take pride in, and celebrate, our employees.

In 2020, we established Willdan’s Diversity, Equity, and Inclusion Working Group (“DEI Working Group”).

The DEI Working Group is designed to increase overall employee engagement and collaboration.

Among other things, the DEI Working Group focuses on recruiting, development and community outreach, and developing and tracking progress toward DE&I objectives.

The DEI Working Group is comprised of four employee-led subgroups:

(i) Business Partnerships, (ii) Community Outreach and Engagement, (iii) Inclusive Culture, and (iv) Recruitment.

Each subgroup is led by a chair or co- chairpersons championing the needs and well-being of stakeholders, including employees.

Collectively, the subgroups positively impact professional development, community outreach and business by creating and embracing cultural initiatives.

Willdan employees are highly engaged in the formation of Employee Resource Groups (“ERG”), fostering a greater sense of community while increasing employee engagement, inclusiveness, representation, and collaboration.

All employees have the opportunity to initiate, join, and lead ERGs.

Employee Engagement and Development

Continuous growth requires continued investment in people, innovation, and new opportunities.

We continuously strive to improve upon our engagement between employees and management teams to drive our company goals and enhance the employee experience.

We aim to develop capable leadership that can meet the challenges of business growth while instilling a supportive and inclusive culture.

At all locations, we provide our employees with performance assessments and evaluations and professional development opportunities including access to job specific training.

We also provide our employees with training on workplace culture and enrichment through our learning platform, which covers topics such as harassment, creating healthy work environments, inclusion, ethics and compliance.

During fiscal year 2021, we initiated an annual company-wide employee engagement survey.

We have since worked to incorporate feedback that we received by expanding our use of internal diversity and human capital metrics and recruiting efforts and improving access to professional development programs.

Our team began collecting additional human capital metrics, such as employee gender ratios and other demographic information, and we have expanded the roster of universities at which we conduct recruiting activities.

We also invested in our employee development strategy by expanding our employee training and professional development programs.

We launched our 2022 survey in late fiscal year 2022 and are in the process of analyzing the results with the goal to implement applicable feedback in 2023.

Community Training

As part of our community outreach, in the beginning of 2020 we established and financed the Willdan Clean Energy Academy (“WCEA”) which offers free training in energy efficiency skills and career services to disadvantaged workers in the New York City area.

In 2021, Willdan increased the funding for this outreach effort and the WCEA expanded to the Los Angeles City Area.

The academy supports a diverse workforce and collaborates with community-based organizations and Workforce centers to support career development.

At the end of 2022, WCEA reached 500 graduates and achieved over 40% participant job placement.

The WCEA supports a diverse workforce and collaborates with community-based organizations and workforce centers to support energy efficiency workforce development.

Workplace Safety

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Our Health and Safety Council meets monthly and our Health and Safety program is designed to address the hazards associated with our business and to prescribe the policies and practices needed to prevent workplace injuries and illness.

In 2022, we established and appointed a Director of Health and Safety, a key leadership role for Willdan.

In addition, we launched a new interactive employee health and safety (“EH&S”) platform in support of our risk management efforts.

This streamlined process documents the investigation and reporting of incidents, safety inspections, and completion of certain safety training requirements - whether performing office or field work.

We track and report all safety incidents.

Our safety incident metrics is provided below.

Our safety incident metrics are provided below.

For context, lost-time injuries are those occurring in the workplace and resulting in an employee’s inability to work the next full workday.

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Sustainability, environmental protection and climate change mitigation is the core of our identity and our work tackles these essential global challenges every day as we advise and assist governments, utilities and industry in defining and meeting goals for improvement.

We provide planning and policy analysis for governments, regulators, and utilities, as well as innovative financing programs that bring the benefit of clean energy to underserved neighborhoods and disadvantaged customers.

In addition, we strive to reduce our own ecological footprint and our environmental impact, as we help our customers achieve their own sustainability goals.

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This has led to energy-efficient upgrades at over 320,000 commercial buildings, schools, hospitals, and other public buildings.

Willdan’s program management activities for various utilities have yielded more than 7.8 billion kWh savings, 11 million therms reductions over the past 14 years.

We are committed to the relentless improvement and protection of our planet.

Willdan’s program management activities for various utilities have yielded more than 8.2 billion kWh savings, and 97 million therms reductions over the past 15 years.

We are committed to the continuous improvement and protection of our planet.

The success of our business model is built on this foundation.

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Annually, the Board works with our senior management team on a detailed, multi-year strategic plan, reviewing goal progress each quarter.

The Board also oversees efforts by Willdan’s senior management team in managing environmental and social risks and opportunities The Board is led by our Chairman and CEO.

Our Board’s directors are independent under NASDAQ and Willdan independence standards, except for our CEO.

The Board also oversees efforts by Willdan’s senior management team in managing environmental and social risks and opportunities.

The Board is led by our Chairman and Chief Executive Officer (“CEO”).

We are managed under the direction of the Board, which is currently composed of seven directors.

The Board has determined that our directors, except for our CEO, are independent under the rules of the listing standards for the Nasdaq Global Market and the Securities Exchange Act of 1934, as amended.

As the director most familiar with our business and industry, we believe our CEO is best suited to serve as Chairman of our Board.

1 unchanged sentence

Our Board is comprised of a diverse group of academics, financial advisors and industry practitioners with extensive experience in the governance and direction of publicly-traded enterprises.

At any time, shareholders and other interested parties may communicate by writing with the Board of Directors generally, with the non-employee directors as a group, or with a specific director.

We are managed under the direction of the Board, which is currently composed of ten directors.

The Board has determined nine directors are independent under the rules of the listing standards for the Nasdaq Global Market and the Securities Exchange Act of 1934, as amended.

At any time, shareholders and other interested parties may communicate by writing to the Board generally, with the non-employee directors as a group, or to a specific director.

Intellectual Property

4 unchanged sentences

The name and logo of our proprietary software, MuniMagic+ SM , our California energy efficiency CEDA, as well as our proprietary platform as a service VIEWPOINT are also registered marks, and we have registered a federal copyright for the source code for the MuniMagic+ SM software.

In connection with our acquisitions, we have obtained the trademark for our “LoadSEER” software, have obtained the patent for “Optimization of Microgrid Energy Use and Distribution”, have obtained the service marks for the Enerpath, Enerworks and Lime/Green Dial Design, and have obtained the registered copyright of Lime, Lime Energy, and Main Street Efficiency.

NEO, Net Energy Optimizer, Collaboration Analysis Research, and several Weidt Group designs.

Available Information

4 unchanged sentences

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.

What changed 10-K

Item 1. Business