Willdan Group (WLDN) 16th Annual Southwest IDEAS Conference summary

Business overview and strategy

• Focuses on transitioning communities to sustainable energy through grid planning software, policy advisory, and energy efficiency programs, primarily for utilities and municipalities.

• Maintains long-term relationships with public agencies, driving growth through M&A and a strong balance sheet.

• Net revenue for 2023 is projected at $290 million, with a 13% CAGR since 2021.

• EBITDA margins are around 18%, with over 1,700 employees across 25 states and 53 offices.

• Business model emphasizes consulting, engineering, and program management, with minimal self-performed work.

Market trends and growth drivers

• Experiencing multi-year, possibly decade-long, load growth for the first time in 50 years, driven by electrification and energy transition.

• Advisory work includes studies on optimal placement of new infrastructure for data centers, especially in Virginia.

• Recent acquisition of Enica Engineering expands into commercial energy consulting, with high margins and new market entry.

• Revenue mix: 40-44% fixed contracts, 38% unit price, and 20% time & materials.

• Program management business includes large projects like the Clark County School District, providing future growth opportunities.

Financial performance and outlook

• EBITDA has nearly doubled over two years, with 25% growth expected for 2024 compared to 2021.

• Year-to-date nine-month EPS growth is 80%, aided by tax credits such as 179D.

• Free cash flow is nearly $2.30 per share for nine months, with low recurring CapEx.

• Net debt to adjusted EBITDA is less than 1x, and total liquidity exceeds $100 million, supporting further M&A.

• Financial targets are set conservatively, with a track record of exceeding them.