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8-K/A - 8-K/A - Willdan Group, Inc.a15-7349_18ka.htm
EX-99.2 - EX-99.2 - Willdan Group, Inc.a15-7349_1ex99d2.htm
EX-99.4 - EX-99.4 - Willdan Group, Inc.a15-7349_1ex99d4.htm
EX-23.2 - EX-23.2 - Willdan Group, Inc.a15-7349_1ex23d2.htm
EX-99.9 - EX-99.9 - Willdan Group, Inc.a15-7349_1ex99d9.htm
EX-99.5 - EX-99.5 - Willdan Group, Inc.a15-7349_1ex99d5.htm
EX-99.7 - EX-99.7 - Willdan Group, Inc.a15-7349_1ex99d7.htm
EX-99.8 - EX-99.8 - Willdan Group, Inc.a15-7349_1ex99d8.htm
EX-99.1 - EX-99.1 - Willdan Group, Inc.a15-7349_1ex99d1.htm
EX-23.1 - EX-23.1 - Willdan Group, Inc.a15-7349_1ex23d1.htm
EX-99.3 - EX-99.3 - Willdan Group, Inc.a15-7349_1ex99d3.htm

Exhibit 99.6

 

ABACUS RESOURCE MANAGEMENT COMPANY

 

FINANCIAL STATEMENTS

 

For the Nine Months Ended September 30, 2013

 

 



 

CONTENTS

 

 

 

 

Page

 

 

INDEPENDENT ACCOUNTANTS’ REVIEW REPORT

1

 

 

FINANCIAL STATEMENTS

 

 

 

BALANCE SHEET

2-3

 

 

STATEMENT OF INCOME

4

 

 

STATEMENT OF RETAINED EARNINGS

5

 

 

STATEMENT OF CASH FLOWS

6

 

 

NOTES TO FINANCIAL STATEMENTS

7-11

 



 

David A. Kuykendall, CPA

Thomas H. Hamann, JD/CPA

Amy D. Johnson, CPA

Carrie N. Kuykendall, CPA

 

Phone: (503) 656-1405

Fax: (503) 655-7505

 

INDEPENDENT ACCOUNTANTS’ REVIEW REPORT

 

To the Stockholders

Abacus Resource Management Company

 

We have reviewed the accompanying balance sheet of Abacus Resource Management Company (a Corporation) as of September 30, 2013, and the related statements of income, retained earnings and cash flows for the nine months then ended. A review includes primarily applying analytical procedures to management’s financial data and making inquiries of Corporation management. A review is substantially less in scope than an audit, the objective of which is the expression of an opinion regarding the financial statements as a whole. Accordingly, we do not express such an opinion.

 

Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America and for designing, implementing, and maintaining internal control relevant to the preparation and fair presentation of the financial statements.

 

Our responsibility is to conduct the review in accordance with Statements on Standards for Accounting and Review Services issues by the American Institute of Certified Public Accountants. Those standards require us to perform procedures to obtain limited assurance that there are no material modifications that should be made to the financial statements. We believe that the results of our procedures provide a reasonable basis for our report.

 

Based on our review, we are not aware of any material modifications that should be made to the accompanying financial statements in order for them to be in conformity with accounting principles generally accepted in the United States of America.

 

Kent, Kuykendall & Co., P.C.

 

/s/ Kent, Kuykendall & Co., P.C.

 

January 7, 2015

 



 

ABACUS RESOURCE MANAGEMENT COMPANY

BALANCE SHEET

September 30, 2013

 

ASSETS

 

 

 

 

CURRENT ASSETS

 

 

 

Cash in checking

 

$

583,413

 

Accounts receivable - trade

 

1,929,403

 

Retention receivable

 

344,473

 

Costs and estimated earnings in excess of billings on uncompleted contracts

 

262,630

 

 

 

 

 

TOTAL CURRENT ASSETS

 

3,119,919

 

 

 

 

 

PROPERTY AND EQUIPMENT, at cost

 

 

 

Equipment

 

101,563

 

Furniture and fixtures

 

23,078

 

Office and computer equipment

 

21,906

 

Vehicles

 

129,637

 

 

 

276,184

 

Less accumulated depreciation

 

(110,452

)

 

 

 

 

TOTAL PROPERTY AND EQUIPMENT

 

165,732

 

 

 

 

 

OTHER ASSETS

 

 

 

Deposits

 

4,602

 

 

 

 

 

TOTAL ASSETS

 

$

3,290,253

 

 

Continued on next page.

 

See accompanying notes and independent accountants’ review report.

 

2



 

ABACUS RESOURCE MANAGEMENT COMPANY

BALANCE SHEET (Continued)

September 30, 2013

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

CURRENT LIABILITIES

 

 

 

Accounts payable - trade

 

$

1,535,697

 

Retention payable

 

225,331

 

Billings in excess of costs and estimated earnings on uncompleted contracts

 

225,906

 

Sales tax payable

 

126,187

 

Current maturities of long-term debt

 

24,699

 

 

 

 

 

TOTAL CURRENT LIABILITIES

 

2,137,820

 

 

 

 

 

LONG-TERM LIABILITIES

 

 

 

Notes payable - stockholders

 

40,000

 

Long-term debt, net of current maturities

 

57,238

 

 

 

 

 

TOTAL LONG-TERM LIABILITIES

 

97,238

 

 

 

 

 

TOTAL LIABILITIES

 

2,235,058

 

 

 

 

 

STOCKHOLDERS’ EQUITY

 

 

 

Common stock, no par value, 2,000 shares authorized and issued

 

2,000

 

Retained earnings

 

1,053,195

 

 

 

 

 

TOTAL STOCKHOLDERS’ EQUITY

 

1,055,195

 

 

 

 

 

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

 

$

3,290,253

 

 

See accompanying notes and independent accountants’ review report.

 

3



 

ABACUS RESOURCE MANAGEMENT COMPANY

STATEMENT OF INCOME

For the Nine Months Ended September 30, 2013

 

 

 

Amount

 

Percent

 

 

 

 

 

 

 

CONTRACT REVENUES

 

$

6,793,234

 

100.0

%

 

 

 

 

 

 

CONTRACT COSTS

 

 

 

 

 

Subcontractors

 

5,071,169

 

74.6

 

Labor

 

475,738

 

7.0

 

Materials and equipment

 

7,723

 

0.1

 

Construction bond fees

 

79,546

 

1.2

 

Travel

 

11,222

 

0.2

 

TOTAL CONTRACT COSTS

 

5,645,398

 

83.1

 

 

 

 

 

 

 

GROSS PROFIT FROM CONTRACTS

 

1,147,836

 

16.9

 

 

 

 

 

 

 

GENERAL AND ADMINISTRATIVE EXPENSES

 

 

 

 

 

Auto expense

 

26,861

 

0.4

 

Business development and warranty

 

8,336

 

0.1

 

Rent

 

53,633

 

0.8

 

Office expense

 

8,240

 

0.1

 

Insurance and bonds

 

24,533

 

0.4

 

Payroll expenses

 

203,758

 

3.0

 

Taxes - other

 

32,131

 

0.5

 

Telephone and internet

 

13,332

 

0.2

 

Travel

 

8,302

 

0.1

 

Depreciation

 

44,422

 

0.6

 

Professional services

 

28,029

 

0.4

 

Business meals and entertainment

 

4,510

 

0.1

 

Computer expenses

 

16,754

 

0.2

 

Dues and subscriptions

 

580

 

 

Licenses and permits

 

756

 

 

Small equipment

 

4,887

 

0.1

 

Advertising

 

5,358

 

0.1

 

Miscellaneous

 

5,366

 

0.1

 

TOTAL GENERAL AND ADMINISTRATIVE EXPENSES

 

489,788

 

7.2

 

 

 

 

 

 

 

TOTAL OPERATING INCOME

 

658,048

 

9.7

 

 

 

 

 

 

 

OTHER INCOME (EXPENSE)

 

 

 

 

 

Interest income

 

70

 

 

Interest expense

 

(3,040

)

(0.1

)

Loss on disposal of fixed assets

 

(1,444

)

 

TOTAL OTHER INCOME (EXPENSE)

 

(4,414

)

(0.1

)

 

 

 

 

 

 

NET INCOME

 

$

653,634

 

9.6

%

 

See accompanying notes and independent accountants’ review report.

 

4



 

ABACUS RESOURCE MANAGEMENT COMPANY

STATEMENT OF RETAINED EARNINGS

For the Nine Months Ended September 30, 2013

 

 

RETAINED EARNINGS JANUARY 1, 2013

 

$

1,091,132

 

 

 

 

 

NET INCOME FOR PERIOD

 

653,634

 

 

 

 

 

STOCKHOLDERS’ DISTRIBUTIONS

 

(691,571

)

 

 

 

 

RETAINED EARNINGS SEPTEMBER 30, 2013

 

$

1,053,195

 

 

See accompanying notes and independent accountants’ review report.

 

5



 

ABACUS RESOURCE MANAGEMENT COMPANY

STATEMENT OF CASH FLOWS

For the Nine Months Ended September 30, 2013

 

CASH FLOWS FROM OPERATING ACTIVITIES

 

 

 

Net income

 

$

653,634

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

Depreciation

 

44,422

 

Loss on disposal of property and equipment

 

1,444

 

Increase in accounts receivable

 

(1,399,363

)

Decrease in retention receivable

 

987

 

Increase in costs and estimated earnings in excess of billings on uncompleted contracts

 

(17,348

)

Increase in accounts payable

 

953,250

 

Increase in retention payable

 

109,372

 

Increase in billings in excess of costs and estimated earnings on uncompleted contracts

 

122,200

 

Increase in sales tax payable

 

96,001

 

 

 

 

 

NET CASH PROVIDED BY OPERATING ACTIVITIES

 

564,599

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES

 

 

 

Decrease in certificates of deposit

 

100,050

 

Purchase of property and equipment

 

(4,665

)

 

 

 

 

NET CASH PROVIDED BY INVESTING ACTIVITIES

 

95,385

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES

 

 

 

Payments on long-term debt

 

(17,809

)

Stockholders’ distributions

 

(691,571

)

 

 

 

 

NET CASH USED BY FINANCING ACTIVITIES

 

(709,380

)

 

 

 

 

NET DECREASE IN CASH AND CASH EQUIVALENTS

 

(49,396

)

 

 

 

 

CASH AND CASH EQUIVALENTS, beginning

 

632,809

 

 

 

 

 

CASH AND CASH EQUIVALENTS, ending

 

$

583,413

 

 

See accompanying notes and independent accountants’ review report.

 

6



 

ABACUS RESOURCE MANAGEMENT COMPANY

NOTES TO FINANCIAL STATEMENTS

For the Nine Months Ended September 30, 2013

 

NOTE 1 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Nature of Operations

 

Abacus Resource Management Company (ARMCO) is a full-service energy services company founded in 1986. ARMCO’s core business is identifying and implementing energy conservation projects for its clients throughout the Pacific Northwest.

 

Operating Cycle

 

Assets and liabilities related to long-term contracts are included in current assets and current liabilities in the accompanying balance sheets as they will be liquidated in the normal course of contract completion, although this may require more than one year.

 

Revenue and Cost Recognition on Construction Contracts

 

The Corporation recognizes revenues from construction contracts on the percentage-of-completion method, measured by the percentage of cost incurred to date to estimated total costs for each contract. This method is used because management considers total cost to be the best available measure of progress on the contracts.

 

Contract costs include all direct labor, material, subcontract costs, other direct costs and allocated indirect costs related to contract performance. Selling, general and administrative costs are charged to expense when incurred. Provisions for estimated losses on uncompleted contracts are made in the period in which such losses are determined. Changes in job performance, job conditions, and estimated profitability may result in revisions to costs and income and are recognized in the period in which the revisions are determined.

 

The asset, “Costs and estimated earnings in excess of billings on uncompleted contracts.” represents revenues recognized in excess of amounts billed. The liability, “Billings in excess of costs and estimated earnings on uncompleted contracts,” represents billings in excess of revenues recognized.

 

Cash and Cash Equivalents

 

For purposes of the statement of cash flows, the Corporation considers cash and short-term investments with original maturities of three months or less to be cash equivalents.

 

The Corporation maintains all of its cash at one bank which, at times, is in excess of federally insured limits. Management monitors the soundness of this financial institution and feels the Corporation’s risk is negligible. The Corporation has not experienced any losses in such accounts.

 

Accounts Receivable

 

Accounts receivable have been recorded at full value with no provision for doubtful accounts. All accounts receivable are deemed collectible at September 30, 2013.

 

7



 

ABACUS RESOURCE MANAGEMENT COMPANY

NOTES TO FINANCIAL STATEMENTS

For the Nine Months Ended September 30, 2013

 

NOTE 1 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

 

Property and Equipment

 

Property and equipment are recorded at cost and include major expenditures which increase productivity or substantially increase useful lives.

 

Maintenance, repairs, and minor replacements are charged to expense when incurred. When equipment is sold or otherwise disposed of, the asset and related accumulated depreciation are removed from the accounts and any gain or loss is included in the statements of operations.

 

The cost of equipment is depreciated over the estimated useful lives of the related assets. Depreciation is computed using the straight-line method for financial reporting purposes. Estimated useful lives range from 3 to 5 years.

 

Advertising Costs

 

The Corporation expenses the cost of advertising as incurred. Total advertising costs expensed in for the nine months ended September 30, 2013 were $5,358.

 

Income Taxes

 

Provisions for income taxes have not been provided because the stockholders elected to be treated as an S Corporation for income tax purposes. As such, the corporation income or loss and credits are passed to the stockholders and are combined with their other personal income and deductions to determine taxable income on their individual tax returns. In addition, accelerated depreciation methods are used for tax reporting purposes.

 

Use of Estimates

 

Management uses estimates and assumptions in preparing financial statements. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could differ from these estimates. Management’s estimates and assumptions include, but are not limited to. estimates of contract revenue, costs and gross profit. Management’s estimates and assumptions are derived from and are continually evaluated based upon available information, judgment and experience.

 

Warranties

 

The Corporation provides a one-year warranty covering defects specific to its portion of contracts on construction projects. The warranty historically has not produced material costs; therefore, the Corporation does not accrue future estimated expense against current operations.

 

8



 

ABACUS RESOURCE MANAGEMENT COMPANY

NOTES TO FINANCIAL STATEMENTS

For the Nine Months Ended September 30, 2013

 

NOTE 1 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

 

Compensated Absences

 

Employees of the Corporation are entitled to paid vacation and paid sick days depending on job classification, length of service, and other factors. It is not practicable for the Corporation to estimate the amount of compensation for future absences. Accordingly, no liability for compensated absences has been recorded in the accompanying financial statements. The Corporation’s policy is to recognize the costs of compensated absences when actually paid to employees.

 

NOTE 2 — COSTS AND ESTIMATED EARNINGS ON UNCOMPLETED CONTRACTS

 

Costs incurred on uncompleted contracts

 

$

7,313,744

 

Estimated earnings

 

1,901,016

 

 

 

9,214,760

 

Less billings to date

 

(9,178,036

)

 

 

$

36,724

 

 

 

 

 

Included in the accompanying balance sheet under the following captions:

 

 

 

 

 

 

 

Costs and estimated earnings in excess of billings on uncompleted contracts

 

$

262,630

 

 

 

 

 

Billings in excess of costs and estimated earnings on uncompleted contracts

 

(225,906

)

 

 

$

36,724

 

 

NOTE 3 — LEASING ARRANGEMENTS

 

The Corporation conducts its operations from facilities that are leased under a 39-month operating lease that will expire on July 31, 2015. The current monthly rent is $4,602 with a rent concession of $594 per month through July 1, 2014.

 

The following is a schedule of future minimum rental payments required under the above operating lease as of September 30, 2013:

 

2014

 

$

49,284

 

2015

 

46,020

 

 

 

$

95,304

 

 

Total rent expense under all operating leases was $53,633 for the nine months ended September 30, 2013.

 

9



 

ABACUS RESOURCE MANAGEMENT COMPANY

NOTES TO FINANCIAL STATEMENTS

For the Nine Months Ended September 30, 2013

 

NOTE 4 — LINE OF CREDIT

 

The Corporation has available a line of credit up to $500,000 with KeyBank National Association at an interest rate of prime plus 1.0%. The line is secured by all assets of the Corporation and the personal guarantees of the Corporation’s stockholders. At September 30, 2013, there was no balance due on the line of credit.

 

NOTE 5 — LONG-TERM DEBT

 

Long-term debt consists of the following:

 

 

 

 

Current

 

 

 

Total

 

Portion

 

Note payable to Toyota Motor Credit at $566.83 per month including interest at 3.99%. The note is secured by a 2008 Toyota Sequoia.

 

$

17,688

 

$

6,209

 

 

 

 

 

 

 

Note payable to Dodge Credit at $479.76 per month including interest at 5.75%. The note is secured by a 2011 Dodge Ram.

 

12,961

 

5,146

 

 

 

 

 

 

 

Note payable to Bank of America at $617.61 per month including interest at 4.35%. The note is secured by a 2011 Dodge Truck.

 

21,889

 

6,592

 

 

 

 

 

 

 

Note payable to TD Auto Finance at $652.44 per month including interest at 4.09%. The note is secured by a 2013 Dodge Charger.

 

29,399

 

6,752

 

 

 

 

 

 

 

 

 

$

81,937

 

$

24,699

 

 

Principal payments due on long-term debt using these payment amounts for subsequent years are as follows:

 

2014

 

$

24,699

 

2015

 

25,827

 

2016

 

21,897

 

2017

 

8,860

 

2018

 

654

 

 

 

 

 

 

 

$

81,937

 

 

10



 

ABACUS RESOURCE MANAGEMENT COMPANY

NOTES TO FINANCIAL STATEMENTS

For the Nine Months Ended September 30, 2013

 

NOTE 6 — STOCKHOLDERS’ EQUITY

 

The Corporation has 2,000 shares of authorized and issued no par stock with a stated value of $1.00 per share.

 

NOTE 7 — MAJOR CUSTOMERS AND RISK CONCENTRATIONS

 

Contract revenues consist primarily of contracts with public and non-profit entities located throughout Oregon and Washington.

 

Accounts receivable from two customers as of September 30, 2013 represents 92% of the total trade accounts receivable balance. The Corporation had three customers which made up approximately 65% of the contract revenues for the nine months ended September 30, 2013.

 

NOTE 8 — SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

 

The Corporation uses the indirect method for reporting cash flow.

 

Cash paid during the period for:

 

Interest

 

$

3,040

 

 

 

 

 

Excise taxes

 

$

150

 

 

NOTE 9 — SUBSEQUENT EVENTS

 

The Corporation has evaluated subsequent events through January 7, 2015, which is the date the financial statements were available to be issued.

 

As of the date of the financial statements, the Corporation was in ongoing negotiations for the sale of the entire Corporation.

 

11