Willdan Group, Inc. (NASDAQ: WLDN) reported 2Q2016 results that showed improvement from the year-ago quarter and the management also commented on the results in addition to issuing guidance for the full-year 2016. But as an investor or a prospective one, there are a few things you should keep in mind.
Topline grew 60%
The $58.9 million in revenue that Willdan Group, Inc. (NASDAQ: WLDN) reported in the latest quarter rose 60% over the same period last year. The revenue also handily beat the consensus estimate of $49.55.
The management said that the assets acquired from Genesys Engineering P.C. early this year contributed the revenue growth.
Bottom-line jumps and beat
Willdan Group, Inc. (NASDAQ: WLDN)’s EPS of $0.37 as reported in the latest quarter both beat the consensus estimate of $0.23 and increased from $0.20 in the same quarter in 2015.
But what’s underlying the bottom-line improvement? The management clearly stated that solid topline growth and lower tax burden helped to lift EPS in the latest quarter.
There should be more tax benefits in the future as the products that the company is developing quality for tax deductions. As such Willdan expects to reduce its long-term tax rate to about 36%from 42%, which should result in further bottom-line improvement.
Willdan also noted that the lower tax rate is also having a positive impact on its free cash flow. Perhaps that goes a long way to explain why the company’s cash balance jumped to $10.5 million at the end of the latest quarter compared to $4.8 million at the end of 1Q2016.
2016 outlook – Willdan Group, Inc. (NASDAQ: WLDN)
Willdan Group, Inc. (NASDAQ: WLDN) sees 2016 revenue coming in the band of $175 to $190 million. EPS for the year is expected in the range of $0.84 to $0.91. The guidance compare favorably with the consensus estimates that call for revenue of $177.07 million and EPS of $0.74.
The strong guidance comes at a time when Willdan has said that it expects strong demand for its energy efficiency services from customers that include universities and municipalities.