Willdan Group, Inc.

Previous wording

Our Energy segment addresses power grid resiliency, efficiency, and reliability. Services include in-depth energy planning studies, economic analysis, modeling and forecasting software, decarbonization, program design and implementation, energy efficiency, turnkey energy and infrastructure projects, grid modernization, and utility-scale electrical engineering and construction management. Clients in this segment are investor-owned and municipal utilities, commercial clients including investors and hyperscalers, and state and local governments.

Current wording

Our Energy segment addresses power grid resiliency, efficiency, and reliability. Services include in-depth energy planning studies, economic analysis, modeling and forecasting software, decarbonization, program design and implementation, energy efficiency, turnkey energy and infrastructure projects, grid modernization, and utility-scale electrical engineering and construction management. Clients in this segment are investor-owned and municipal utilities, commercial clients including retailers, pharmaceuticals, industrial concerns and hyperscalers, and state and local governments, school districts and government agencies.

Previous wording

Contract revenue in our Engineering and Consulting segment increased $1.0 million, or 3.9%, in the three months ended April 3, 2026, compared to the three months ended April 4, 2025, primarily due to increased demand for services provided to our clients, combined with the incremental revenues from our acquisition of Alpha Inspections, Inc. (“Alpha”) and Compass Municipal Advisors, LLC. (“Compass”), while being partially offset by the impact of having one fewer week in our first fiscal quarter of fiscal year 2026 as compared to our first fiscal quarter of fiscal year 2025.

Current wording

Contract revenue in our Engineering and Consulting segment increased $1.7 million, or 6.4%, in the three months ended July 3, 2026, compared to the three months ended July 4, 2025, primarily due to increased demand for services provided to our clients, combined with the incremental revenues from our acquisition Compass Municipal Advisors, LLC. (“Compass”) in January 2026.

Previous wording

Direct costs of contract revenue in our Energy segment decreased $3.5 million, or 4.3%, for the three months ended April 3, 2026, compared to the three months ended April 4, 2025. Direct costs of contract revenue for the Engineering and Consulting segment increased $0.8 million, or 6.3%, in the three months ended April 3, 2026, compared to the three months ended April 4, 2025.

Current wording

Direct costs of contract revenue in our Energy segment increased $37.3 million, or 40.2%, for the three months ended July 3, 2026, compared to the three months ended July 4, 2025. Direct costs of contract revenue for the Engineering and Consulting segment increased $1.1 million, or 8.7%, in the three months ended July 3, 2026, compared to the three months ended July 4, 2025.

Previous wording

Gross Profit. Gross profit increased 9.5% to $63.2 million, or 40.7% gross margin, for the three months ended April 3, 2026, compared to gross profit of $57.7 million, or 37.8% gross margin, for the three months ended April 4, 2025. The increase in our gross margin was primarily driven by the improved productivity under ourenergy efficiency and electrification utility programs and the mix of revenues as described above.

Current wording

Gross Profit. Gross profit increased 28% to $87.5 million, or 37.9% gross margin, for the three months ended July 3, 2026, compared to gross profit of $68.3 million, or 39.4% gross margin, for the three months ended July 4, 2025. The decrease in our gross margin was primarily driven by the changes in the mix of revenues as described above, including the addition of Burton.

Previous wording

General and administrative expenses. General and administrative (“G&A”) expenses increased $5.2 million, or 10.3%, to $55.9 million in the three months ended April 3, 2026, compared to $50.6 million for the three months ended April 4, 2025. G&A expenses consisted of an increase of $2.9 million, or 7.7%, in the Energy segment combined with an increase of $0.4 million, or 3.5%, in the Engineering and Consulting segment, and the remaining increase in unallocated corporate expenses.

Current wording

General and administrative expenses. General and administrative (“G&A”) expenses increased $11.2 million, or 19.8%, to $67.7 million in the three months ended July 3, 2026, compared to $56.5 million for the three months ended July 4, 2025. As a percentage of contract revenues, G&A decreased to 29.3% in the three months ended July 3, 2026 from 32.6% in the three months ended July 4, 2025. G&A expenses consisted of an increase of $10.3 million, or 25.3%, in the Energy segment combined with an increase of $2.3 million, or 23.1%, in the Engineering and Consulting segment, and the remaining decrease in unallocated corporate expenses.

Previous wording

Income (loss) from operations. Operating income increased 3.6% to $7.3 million for the three months ended April 3, 2026, compared to an operating income of $7.0 million for the three months ended April 4, 2025, as a result of the factors noted above, including being partially offset by the impact of having one fewer week in our first fiscal quarter of fiscal year 2026 as compared to our first fiscal quarter of fiscal year 2025. When removing the impact of the additional week in the first quarter of fiscal year 2025, operating income increased 11.6% in the three months ended April 3, 2026, compared to the adjusted three months ended April 4, 2025.

Current wording

Income (loss) from operations. Operating income increased 67.0% to $19.7 million for the three months ended July 3, 2026, compared to an operating income of $11.8 million for the three months ended July 4, 2025, as a result of the factors noted above.

Previous wording

Total other expense, net. Total other expense, net, decreased $1.8 million, or 97.8%, for the three months ended April 3, 2026, compared to the three months ended April 4, 2025, primarily due to the lower interest expense resulting from the reduced interest rate spread derived from lower debt leverage levels under our credit facilities, combined with

Current wording

Total other expense, net. Total other expense, net, decreased $1.0 million, or 60.4%, for the three months ended July 3, 2026, compared to the three months ended July 4, 2025, primarily due to the lower interest expense resulting from the reduced interest rate spread derived from lower debt leverage levels under our credit facilities, combined with the absence of a one-time charge for unamortized debt issuance costs related to our prior credit facilities that we had in the second quarter of fiscal year 2025.

Previous wording

Income tax expense (benefit). We recorded an income tax benefit of $1.3 million for the three months ended April 3, 2026, an effective tax benefit rate of 17.6% on income before income tax expense, compared to an income tax expense of $0.5 million for the three months ended April 4, 2025, an effective tax expense rate of 9.7% on income before tax expense. The reduction in the effective tax rate resulted from increases in discrete items related to stock compensation deductions.

Current wording

Income tax expense (benefit). We recorded an income tax benefit of $5.3 million for the three months ended July 3, 2026, an effective tax benefit rate of 27.5% on income before income tax expense, compared to an income tax benefit of $5.3 million for the three months ended July 4, 2025, an effective tax benefit rate of 51.6% on income before tax expense. The decrease in the effective tax benefit rate resulted from the increase in income before income tax, partially offset by the increases in discrete items related to stock compensation deductions and additional energy-efficiency building deductions.

Previous wording

Net income (loss). Our net income was $8.5 million for the three months ended April 3, 2026, as compared to a net income of $4.7 million for the three months ended April 4, 2025. The increase in net income was primarily attributable to the increase in income from operations combined with a reduction in Total Other Expense, net and a lower effective tax rate.

Current wording

Net income (loss). Our net income increased 57.7% to $24.3 million for the three months ended July 3, 2026, as compared to a net income of $15.4 million for the three months ended July 4, 2025. The increase in net income was primarily attributable to the increase in income from operations combined with a reduction in Total other expense, net.

Previous wording

Contract revenue. Consolidated contract revenue increased $2.7 million, or 1.8%, in the three months ended April 3, 2026, compared to the three months ended April 4, 2025, as a result of increased demand for our services in both our Energy segment and our Engineering and Consulting segment while being partially offset by the impact of having one fewer week in our first fiscal quarter of fiscal year 2026 as compared to our first fiscal quarter of fiscal year 2025. When removing the impact of the additional week in the first quarter of fiscal year 2025, contract revenue increased 9.6% in the three months ended April 3, 2026, compared to the adjusted three months ended April 4, 2025.

Current wording

Contract revenue. Consolidated contract revenue increased $60.3 million, or 18.5%, in the six months ended July 3, 2026, compared to the six months ended July 4, 2025, as a result of increased demand for our services in both our Energy segment and our Engineering and Consulting segment. The rate of growth was impacted by the effect of having one fewer week in the first half of fiscal year 2026 when compared to our first fiscal half of fiscal year 2025. When removing the impact of the additional week in the first half of fiscal year 2025, contract revenue increased 23.1% in the six months ended July 3, 2026, compared to the adjusted six months ended July 4, 2025.

Previous wording

Direct costs of contract revenue. Direct costs of consolidated contract revenue decreased $2.8 million, or 2.9%, for the three months ended April 3, 2026, compared to the three months ended April 4, 2025, primarily as a result of the change of mix in contract revenues as described above, while being partially offset by the impact of having one fewer week in our first fiscal quarter of fiscal year 2026 as compared to our first fiscal quarter of fiscal year 2025. As a percentage of contract revenue, subcontractor services and other direct costs decreased to 40.4% in the three months ended April 3, 2026 from 44.0% in the three months ended April 4, 2025. Direct salaries and wages increased $1.6 million, or 5.8%, to support the increased volume of projects in the three months ended April 3, 2026, compared to the three months ended April 4, 2025.

Current wording

Direct costs of contract revenue*.* Direct costs of consolidated contract revenue increased $35.7 million, or 17.8%, for the six months ended July 3, 2026, compared to the six months ended July 4, 2025, primarily as a result of the increased volume of contract revenues as described above. As a percentage of contract revenue, subcontractor services and other direct costs increased to 45.7% in the six months ended July 3, 2026 from 44.7% in the six months ended July 4, 2025, reflecting the higher mix of construction management revenues. Direct salaries and wages increased $4.7 million, or 8.7%, to support the increased volume of projects in the six months ended July 3, 2026, compared to the six months ended July 4, 2025, and declined, as a percentage of contract revenue, to 15.3% in the six months ended July 3, 2026, from 16.7% in the six months ended July 4, 2025.

Previous wording

The overall increase in G&A expenses consisted of an increase of $1.9 million in salaries and wages, payroll taxes and employee benefits, an increase of $1.3 million in stock-based compensation, an increase of $1.0 million in depreciation and amortization, and an increase of $1.3 million in other general and administrative expenses. The increase in salaries and wages, payroll taxes and employee benefits was primarily due to increased staffing from acquisitions, an increase in incentive compensation to support revenue growth, consistent with the improvement in operating profit, and higher fringe benefit costs consistent with the growth in direct and indirect labor costs. The increase in stock-based compensation expenses was primarily related to new stock grants to current employees, executives, and Board of directors at a higher stock price. The increase in depreciation and amortization was primarily related to higher amortization of intangible assets from recent acquisitions. The increase in other general and administrative expenses was primarily due to increases in interest accretion related to our prior acquisitions, combined with increased professional service fees and computer-related expenses.

Current wording

The overall increase in G&A expenses consisted of an increase of $9.8 million in salaries and wages, payroll taxes and employee benefits, an increase of $2.9 million in stock-based compensation, an increase of $2.5 million in depreciation and amortization, and an increase of $1.4 million in other general and administrative expenses. The increase in salaries and wages, payroll taxes and employee benefits was primarily due to increased staffing from acquisitions, an increase in incentive compensation, consistent with the improvement in operating profit, and higher fringe benefit costs consistent with the growth in direct and indirect labor costs. The increase in stock-based compensation expenses was primarily related to new stock grants to current employees, executives and Board of directors at a higher stock price. The increase in depreciation and amortization was primarily related to higher amortization of intangible assets from recent

Previous wording

the absence of a one-time charge related to a facility lease modification that we had in the first quarter of fiscal year 2025.

Current wording

Total other expense, net. Total other expense, net, decreased $2.8 million, or 80.2%, for the six months ended July 3, 2026, compared to the six months ended July 4, 2025, primarily due to the reduced interest rate spread derived from lower debt leverage levels under our credit facilities, combined with the absence of aone-time charge for unamortized debt issuance costs related to our prior credit facilities that we had in the second quarter of fiscal 2025 and the absence ofa one-time charge related to a facility lease modification that we had in thefirst fiscal quarter of fiscal 2025.

Previous wording

As of April 3, 2026, we had a fully drawn $50.0 million term loan with $48.1 million outstanding, a $100.0 million Revolving Credit Facility with no borrowed amounts outstanding and $1.6 million in letters of credit issued. We also had a $50.0 million Delayed Draw Term Loan. The Delayed Draw Term Loan must be drawn before May 2027. The Credit Facilities are each scheduled to mature on May 5, 2030. In addition to the Credit Facilities, we had $28.3 million of unrestricted cash and cash equivalents as of April 3, 2026. Unhedged borrowings under our Credit Facilities, exclusive of the effects of upfront fees, undrawn fees and issuance cost amortization, bore interest at an annual rate of 5.3% as of April 3, 2026. See Part I, Item 1, Note 6, “Debt Obligations”, of the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q, and Part II, Item 8, Note 5, “Debt Obligations”, of the Notes to Consolidated Financial Statements included in our Annual Report on Form 10-Kfor the fiscal year ended January 2, 2026, for information regarding our indebtedness, including information about the Amended and Restated Credit Agreement and repayments, principal repayment terms, interest rates, covenants, and other key terms of our outstanding indebtedness.

Current wording

As of July 3, 2026, we had a fully drawn $50.0 million term loan with $47.5 million outstanding, a $100 million Revolving Credit Facility with $20.0 million outstanding and $1.6 million in letters of credit issued. We also had an undrawn $50.0 million Delayed Draw Term Loan. The Delayed Draw Term Loan must be drawn before May 2027. The Credit Facilities are each scheduled to mature on May 5, 2030. In addition to the Credit Facilities, we had $34.9 million of unrestricted cash and cash equivalents as of July 3, 2026. Unhedged borrowings under our Credit Facilities, exclusive of the effects of upfront fees, undrawn fees and issuance cost amortization, bore interest at an annual rate of 5.3% as of July 3, 2026. See Part I, Item 1, Note 6, “Debt Obligations”, of the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q, and Part II, Item 8, Note 5, “Debt Obligations”, of the Notes to Consolidated Financial Statements included in our Annual Report on Form 10-Kfor the fiscal year ended January 2, 2026, for information regarding our indebtedness, including information about the Amended and Restated Credit

Previous wording

Cash flows used in operating activities were $24.4 million for the three months ended April 3, 2026, as compared to cash flows provided by operating activities of $3.3 million for the three months ended April 4, 2025. Cash flows from operating activities primarily consists of net income, adjusted for non-cash charges, such as depreciation and amortization and stock-based compensation, plus or minus changes in current operating assets and liabilities. Cash flows used in operating activities for the three months ended April 3, 2026, resulted primarily from differences in billings and collections of cash under our major projects. Cash flows provided by operating activities for the three months ended April 4, 2025, resulted primarily from the increase in earnings and working capital requirements.

Current wording

Cash flows provided by operating activities were $19.5 million for the six months ended July 3, 2026, as compared to cash flows provided by operating activities of $28.7 million for the six months ended July 4, 2025. Cash flows from operating activities primarily consists of net income, adjusted for non-cash charges, such as depreciation and amortization and stock-based compensation, plus or minus changes in current operating assets and liabilities. Cash flows provided by operating activities for the six months ended July 3, 2026, resulted primarily from higher working capital requirements to support the growth in revenues, partially offset by the higher income from operations. Cash flows provided by operating activities for the six months ended July 4, 2025, resulted primarily from the increase in earnings and lower working capital requirements.

Previous wording

Cash flows used in investing activities were $2.6 million for the three months ended April 3, 2026, as compared to cash flows used in investing activities of $34.8 million for the three months ended April 4, 2025. Cash flows used in investing activities for the three months ended April 3, 2026 were primarily due to cash paid for the development of proprietary software and the purchase of computers and equipment. Cash flows used in investing activities for the three months ended April 4, 2025 were primarily due to cash paid for acquisitions, combined with cash paid for the development of proprietary software and the purchase of computers and equipment.

Current wording

Cash flows used in investing activities were $54.1 million for the six months ended July 3, 2026, as compared to cash flows used in investing activities of $39.6 million for the six months ended July 4, 2025. Cash flows used in investing activities for the six months ended July 3, 2026 and for the six months ended July 4, 2025 were primarily due to cash paid for acquisitions, combined with cash paid for the development of proprietary software and the purchase of computers and equipment.

Previous wording

Cash flows used in financing activities were $5.4 million for the three months ended April 3, 2026, as compared to cash flows used in financing activities of $4.3 million for the three months ended April 4, 2025.

Current wording

Cash flows provided by financing activities were $7.9 million for thesix months ended July 3, 2026, as compared to cash flows used in financing activities of $30.9 million forthe six months ended July 4, 2025.

Previous wording

For the three months ended April 3, 2026, cash flows used in financing activities were primarily attributable to the $8.8 million cash used to pay withholding taxes on stock grants, $2.8 million payment on contingent consideration, and $0.6 million cash used to pay down our Revolving Credit Facility. Cash flows used in financing activities were partially offset by the receipt of $5.3 million of restricted cash for the distribution of utility incentives to their customers, and $1.9 million of proceeds from sales of common stock under the employee stock purchase plan. Cash flows used in financing activities for the three months ended April 4, 2025 were primarily attributable to the $2.9 million cash used to pay withholding taxes on stock grants, the repayments of $2.5 million under our Term Loan, partially offset by $1.5 million of proceeds from sales of common stock under employee stock purchase plan.

Current wording

For the six months ended July 3, 2026, cash flows provided by financing activities were primarily attributable to borrowings, and repayments, of $30.0 million and $10.0 million, respectively, related to the Revolving Credit Facility combined with the receipt, and disbursement, of $7.2 million and $2.9 million, respectively, related to utility rebates, $1.9 million of proceeds from sales of common stock under the employee stock purchase plan, and $1.5 million of proceeds from stock option exercises. Cash flows provided by financing activities were partially offset by $9.0 million cash used to fund withholding taxes on vesting stock grants, $8.8 million in payments for contingent consideration, and $1.3 million cash used to pay down our Term Loan. For the six months ended July 4, 2025, cash flows used in financing activities were primarily attributable to the $28.4 million cash used to pay down our Revolving Credit Facility, $3.1 million cash used to fund withholding taxes on vesting stock grants, combined with repayments, and borrowings, of $90.0 million and $88.4 million, respectively, related to our Amended and Restated Credit Agreement. Cash flows used in financing activities were partially offset by $1.9 million in proceeds from stock option exercise, and $1.5 million of proceeds from sales of common stock under the employee stock purchase plan.

Previous wording

We do not have any off-balance sheet financing arrangements or liabilities. In addition, our policy is not to enter into futures or forward contracts. Finally, we do not have any majority-owned subsidiaries or any interests in, or relationships with, any special-purpose entities that are not included in the consolidated financial statements. We have, however, an administrative services agreement with Genesys in which we provide Genesys with ongoing administrative, operational and other non-professional support services. We manage Genesys and have the power to direct the activities that most significantly impact Genesys’ performance, in addition to being obligated to absorb expected losses from Genesys. Accordingly, we are the primary beneficiary of Genesys and consolidate Genesys as a variable interest entity.

Current wording

We do not have any off-balance sheet financing arrangements or liabilities. In addition, our policy is not to enter into futures or forward contracts. Finally, we do not have any majority-owned subsidiaries or any interests in, or relationships with, any special-purpose entities that are not included in the consolidated financial statements. We have, however, an administrative services agreement with Genesys in which we provide Genesys with ongoing administrative,

Previous wording

We have contingent obligations to make earnout payments in connection with our acquisitions of Enica, APG, and Compass, subject to their future financial performance. We are contingently 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. We are contingently 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. We are contingently 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. As of April 3, 2026, we had contingent consideration payable of $18.5 million related to the acquisitions of Enica, APG and Compass. Through the three months ended April 3, 2026, our statement of operations includes $0.9 million of interest accretion (excluding fair value adjustments) related to the contingent consideration.

Current wording

We have contingent obligations to make earnout payments in connection with our acquisitions of Enica, APG, Compass, and Burton subject to their future financial performance. We are contingently 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. We are contingently 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. We are contingently 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. We are contingently obligated to pay up to $12.0 million in cash if Burton exceeds certain financial targets during the two years after the Burton closing date of May 4, 2026.

Previous wording

We generally provide our services under contracts, purchase orders or retainer letters. The agreements we enter into with our clients typically incorporate one of three principal types of pricing provisions: time-and-materials, unit-based, and fixed price. Revenue on our time-and-materials and unit-based contracts are recognized as the work is performed in accordance with specific terms of the contract. As of April 3, 2026, 20% of our contracts are time-and-materials contracts, 36% are unit-based contracts, and 44% are fixed price contracts, compared to 20% are time-and-materials contracts, 35% are unit-based contracts, and 45% are fixed price contracts, as of April 4, 2025.

Current wording

We generally provide our services under contracts, purchase orders or retainer letters. The agreements we enter into with our clients typically incorporate one of three principal types of pricing provisions: time-and-materials, unit-based, and fixed price. Revenue on our time-and-materials and unit-based contracts are recognized as the work is performed in accordance with specific terms of the contract. As of July 3, 2026, 16% of our contracts are time-and-materials contracts, 33% are unit-based contracts, and 51% are fixed price contracts, compared to 19% are time-and-materials contracts, 36% are unit-based contracts, and 45% are fixed price contracts, as of July 4, 2025.