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DEBT OBLIGATIONS
 9 Months Ended
Oct. 03, 2025
DEBT OBLIGATIONS  
DEBT OBLIGATIONS

6. DEBT OBLIGATIONS

Debt obligations, excluding obligations under finance leases (see Note 7, “Leases”, below), consisted of the following:

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October 3,

    

December 27,

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2025

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2024

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(in thousands)

New Credit Agreement

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​

​

​

​

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Outstanding borrowings on Term Loan A

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$

49,375

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$

—

Outstanding borrowings on Revolving Credit Facility

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​

—

​

​

—

Outstanding borrowings on Delayed Draw Term Loan

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​

—

​

​

—

Prior Credit Agreement

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​

​

​

​

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Outstanding borrowings on Term Loan

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​

—

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90,000

Outstanding borrowings on Revolving Credit Facility

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​

—

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​

—

Other debt agreements

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​

—

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137

Total debt

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49,375

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90,137

Issuance costs and debt discounts

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(304)

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(650)

Subtotal

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49,071

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89,487

Less current portion of long-term debt

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2,500

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10,137

Long-term debt portion

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$

46,571

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$

79,350

 

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Prior Credit Agreement

On September 29, 2023 (the “Prior Credit Agreement Closing Date”), the Company and certain of its subsidiaries entered into a credit agreement (the “Prior Credit Agreement”) with a syndicate of financial institutions as lenders and BMO Bank, N.A. (“BMO”), as administrative agent (the “Administrative Agent”).

The Prior Credit Agreement provided for (i) a $100.0 million term loan (the “Term Loan”) and (ii) a $50.0 million revolving credit facility (the “Prior Revolving Credit Facility”, and collectively with the Term Loan, the “Prior Credit Facilities”), each maturing on September 29, 2026. The Company could also request lenders to add incremental term loans or increase the aggregate commitment under the Prior Revolving Credit Facility by an aggregate amount of up to $75.0 million, subject to meeting certain conditions, and only if the lenders agreed to provide such additional term loans or revolving commitments.

Borrowings under the Prior Credit Facilities bore interest at either a Base Rate (as defined in the Prior Credit Agreement) or the adjusted Secured Overnight Financing Rate (“SOFR”), at the Company’s option, and in each case, plus an applicable margin, which applicable margin ranged from 0.75% to 2.00% with respect to Base Rate borrowings and 1.75% to 3.00% with respect to SOFR borrowings, depending on the Company’s Total Net Leverage Ratio (as defined in the Prior Credit Agreement); provided, that SOFR and the Base Rate could not be less than 0.00%, with the specific pricing reset on each date on which the Administrative Agent received the required financial statements under the Prior Credit Agreement for the fiscal quarter then ended. The Company would also pay a commitment fee for the unused portion of the Prior Revolving Credit Facility, which ranged from 0.20% to 0.40% per annum depending on the Company’s Total Net Leverage Ratio, and fees on the face amount of any letters of credit outstanding under the Prior Revolving Credit Facility, which ranged from 1.3125% to 2.25% per annum, in each case, depending on the Company’s Total Net Leverage Ratio, as well as customary fronting fees payable to BMO as letter of credit issuer. In connection with the closing of the Prior Credit Facilities, the Company paid certain other fees and expenses.

The prior Term Loan amortized quarterly in an amount equal to (i) 7.5% per annum for the first year ending after the Prior Credit Agreement Closing Date and (ii) 10.0% per annum for the second and third years ending after the

Prior Credit Agreement Closing Date, with a final payment of all then remaining principal and interest due on the maturity date of September 29, 2026. The amounts outstanding under the Prior Credit Facilities could be prepaid in whole or in part at any time without penalty (other than customary breakage costs).

Willdan Group, Inc. was the borrower under the Prior Credit Agreement and its obligations under the Prior Credit Agreement were guaranteed by its present and future domestic subsidiaries (other than inactive subsidiaries). In addition, subject to certain exceptions, all such obligations were secured by substantially all of the assets of Willdan Group, Inc. and the subsidiary guarantors (other than inactive subsidiaries).

The Prior Credit Agreement required compliance with financial covenants, including a maximum Net Leverage Ratio and a minimum Fixed Charge Coverage Ratio (as defined in the Prior Credit Agreement). The Prior Credit Agreement also contained customary restrictive covenants, including (i) restrictions on the incurrence of additional indebtedness and additional liens on property, (ii) restrictions on permitted acquisitions and other investments and (iii) limitations on asset sales, mergers and acquisitions. Further, the Prior Credit Agreement limited the Company’s payment of future dividends and distributions and share repurchases by the Company. Subject to certain exceptions, the borrowings under the Prior Credit Agreement were also subject to mandatory prepayment from (a) any issuances of debt or equity securities, (b) any sale or disposition of assets, (c) insurance and condemnation proceeds, and (d) a percentage of excess cash flow. The Prior Credit Agreement included customary events of default.

Amended and Restated Credit Agreement

On May 5, 2025 (the “Closing Date”), the Company entered into the Amended and Restated Credit Agreement (the “Amended and Restated Credit Agreement”) with BMO as Administrative Agent and the lenders party thereto, which amended and restated the Prior Credit Agreement. The Amended and Restated Credit Agreement, (A) increased the borrowing limit under the Prior Revolving Credit Facility to $100.0 million (as amended, the “Revolving Credit Facility”), (B) reduced the Term Loan A (“TLA”) commitment to $50.0 million, (C) provided a new $50.0 million Delayed Draw Term Loan (the “Delayed Draw Term Loan”, and together with the Revolving Credit Facility and TLA, the “Amended and Restated Credit Facilities”), and (D) extended the maturity date of the Amended and Restated Credit Facilities to May 5, 2030. The Company may also request lenders to add incremental term loans or increase the aggregate commitment under the Revolving Credit Facility by an aggregate amount of (i) up to $75.0 million or (ii) 1.0x the Company’s last twelve months (“LTM”) Adjusted EBITDA (as calculated pursuant to the Amended and Restated Credit Agreement), subject to meeting certain conditions, and only if the lenders agree to provide such additional term loans or revolving commitments.

Pursuant to the Amended and Restated Credit Agreement, borrowings under the Amended and Restated Credit Facilities bear interest at either a Base Rate (as defined in the Amended and Restated Credit Agreement) or the adjusted SOFR, at the Company’s option, and in each case, plus an applicable margin, which applicable margin ranges from 0.50% to 1.50% with respect to Base Rate borrowings and 1.50% to 2.50% with respect to SOFR borrowings, depending on the Company’s Total Net Leverage Ratio (as defined in the Amended and Restated Credit Agreement); provided, that SOFR and the Base Rate cannot be less than 0.00%, with the specific pricing reset on each date on which the Administrative Agent receives the required financial statements under the Credit Agreement for the fiscal quarter then ended. The Company must also pay a commitment fee for the unused portion of the Revolving Credit Facility, which ranges from 0.15% to 0.35% per annum depending on the Company’s Total Net Leverage Ratio, and fees on the face amount of any letters of credit outstanding under the Revolving Credit Facility, which range from 1.125% to 1.875% per annum, in each case, depending on the Company’s Total Net Leverage Ratio, as well as customary fronting fees payable to BMO as letter of credit issuer. In connection with the closing of the Amended and Restated Credit Facilities, the Company paid certain other fees and expenses.

The TLA will amortize quarterly in an amount equal to 5.0% per annum beginning with the first full fiscal quarter ending after the Amended and Restated Credit Agreement Closing Date, with a final payment of all then

remaining principal and interest due on the maturity date of May 5, 2030. Each borrowing under the Delayed Draw Term Loan will amortize in an amount equal to 5.0% per annum of the aggregate outstanding borrowings under the Delayed Draw Term Loan, beginning with the first full fiscal quarter ending after the initial borrowing date, with a final payment of all then remaining principal and interest due on the maturity date of May 5, 2030. The amounts outstanding under the Amended and Restated Credit Facilities may be prepaid in whole or in part at any time without penalty (other than customary breakage costs).

The TLA issuance costs are amortized to interest expense over the term of the TLA, and as of October 3, 2025, issuance costs of $0.3 million remained unamortized. The Revolving Credit Facility unamortized issuance costs are included in assets in the accompanying Condensed Consolidated Balance Sheets, and as of October 3, 2025, consisted of $0.6 million.

Willdan Group, Inc. is the borrower under the Amended and Restated Credit Agreement and its obligations under the Amended and Restated Credit Agreement are guaranteed by its present and future domestic subsidiaries (other than inactive subsidiaries). In addition, subject to certain exceptions, all such obligations are secured by substantially all of the assets of Willdan Group, Inc. and the subsidiary guarantors (other than inactive subsidiaries).

The Amended and Restated Credit Agreement requires compliance with financial covenants, including a maximum Net Leverage Ratio and a minimum Fixed Charge Coverage Ratio (as defined in the Credit Agreement). The Amended and Restated Credit Agreement also contains customary restrictive covenants, including (i) restrictions on the incurrence of additional indebtedness and additional liens on property, (ii) restrictions on permitted acquisitions and other investments and (iii) limitations on asset sales, mergers and acquisitions. Further, the Amended and Restated Credit Agreement limits the Company’s payment of future dividends and distributions and share repurchases by the Company. Subject to certain exceptions, the borrowings under the Amended and Restated Credit Agreement are also subject to mandatory prepayment from (a) any issuances of debt or equity securities, (b) any sale or disposition of assets, (c) insurance and condemnation proceeds, and (d) a percentage of Excess Cash Flow, as defined in the Amended and Restated Credit Agreement. The Amended and Restated Credit Agreement includes customary events of default.

As of October 3, 2025, the Company was in compliance with all these covenants contained in the Amended and Restated Credit Agreement. In addition, as of October 3, 2025, the Company’s composite interest rate, exclusive of the effects of upfront fees, undrawn fees and issuance cost amortization, was 5.7%.

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