Willdan Group looks beyond California to diversify its client base
In 50 years of operation, consulting firm Willdan Group Inc. has ridden California’s wild rocket of growth.
The Anaheim company provides engineering, energy efficiency services and other services to governments and utilities as well as commercial and industrial firms.
“As California grew, many of the cities could not afford their own engineers, their own planners, architects, inspectors,” Chief Executive Thomas D. Brisbin said. “Willdan set up shop to provide those services to the cities when they needed it.”
Brisbin said that the motivation these days for hiring Willdan is different.
“Today, you see cities wanting to outsource their staffs because what we offer is more economical for them,” Brisbin said.
In Riverside County, for example, Willdan experts inspect public works projects such as storm drain installation, traffic signal installation and street improvements. Beyond California, Willdan is employed by clients in Arizona, Florida, Texas, Illinois, Washington and the nation’s capital.
For Consolidated Edison Co. of New York, Willdan helps small businesses achieve better energy efficiency.
Willdan has also designed customized training for disaster and emergency responses.
Willdan Group went public in 2006. Willdan has about 600 employees, including licensed engineers, program and construction managers, financial analysts and planners.
The company name came from its founders in 1964, William Stookey, then the Fullerton city engineer, and his deputy in the department, Dan Heil.
In August, Willdan was awarded a $22-million contract modification with Consolidated Edison, expanding its existing small business energy savings development business.
For the second quarter, which ended June 30, Willdan reported net income of $1.9 million, up from $688,000 a year earlier. Revenue grew to $27 million, compared with $20.5 million a year earlier.
Willdan has worked for 57% of the 482 cities in California and 76% of the state’s 58 counties, Brisbin said.
In 2013, Brisbin said the company served more than 800 clients.
That was also a turnaround year for Willdan, which swung to a profit of $2.6 million, compared with a loss of $17.3 million in 2012. The company has gone from a largely California-centered business to one that has 40% of its work east of the Mississippi River.
In July, the city of Glendale sued Willdan Financial Services, a subsidiary of Willdan Group, alleging that mistakes in a water-rate study cost the city more than $9 million. The company denied the allegations and said in a regulatory filing that it plans to “vigorously defend against the claims,” noting that, “Additionally, this matter is covered by the company’s professional liability insurance policy.”
Willdan still depends on a limited number of clients for a significant portion of its business.
Its largest client, Consolidated Edison, accounted for 16% of contract revenues in 2013. Five businesses supplied 41% of Willdan’s revenues in 2013, meaning that the loss of any of them, or a significant drop in their business, would have a big effect.
That’s one reason why the company has diversified and gone after clients outside California.
“After the recession, we said to ourselves, ‘The world has changed, and we better change with it,’” Brisbin said.
Only one investment firm regularly follows Willdan.
Al Kaschalk, senior vice president of Wedbush Securities, has a neutral rating on Willdan, but he said that the company has “a stable base business” and enough cash on hand to enhance internal growth with acquisitions of other companies.