Financial Data and Key Metrics Changes - In Q1 2023, total revenues increased by 9.2% to $140.3 million, while net revenues rose to $128.7 million, reflecting a strong performance despite macroeconomic challenges [79] - Net income decreased by 1.6% to $29.1 million, maintaining earnings per diluted share at $0.56 [57] - EBITDA increased by 3.7% to $35.8 million, with an EBITDA margin of 27.8% [80] - Utilization dropped to 70.4% from 76.5% in the prior year, attributed to significant headcount growth [81] - The realized rate increase was approximately 6% for the first quarter compared to the same period a year ago [58] Business Line Data and Key Metrics Changes - The engineering and other scientific segment, which represents 83% of net revenues, increased by 11% year-over-year, driven by demand in transportation, utilities, consumer products, and life sciences [76] - The environmental and health segment accounted for 17% of net revenues but saw a 1% decrease compared to the prior year [54] Market Data and Key Metrics Changes - Increased demand for reactive services was noted, particularly in litigation-related activities and product safety across various industries [4] - Proactive engagements were primarily driven by regulatory issues and product design consulting in electronics and medical devices [51] Company Strategy and Development Direction - The company is focused on strategic hiring to meet the complex needs of clients, with a headcount growth of 12% year-over-year [6][13] - Exponent aims to capitalize on macro trends related to safety, health, and environmental concerns, positioning itself for future growth [75] - The company plans to continue investing in talent and capabilities to expand its client base and services [52] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the ongoing demand for critical work despite market uncertainties, indicating that regulatory needs remain strong [23][35] - The full-year 2023 outlook remains unchanged, with expected revenue growth in the high-single to low-double digits and an EBITDA margin of 28% to 28.5% [16][85] - Management noted that the hiring environment has improved, with strong acceptance rates and retention contributing to headcount growth [100] Other Important Information - G&A expenses increased by 38.1% to $5.8 million, primarily due to increased marketing and recruiting activities [60] - The company expects a tax rate of approximately 28% for 2023, up from 27% in 2022 [89] Q&A Session Summary Question: What drove the stronger-than-expected headcount growth? - Management attributed the growth to strong acceptance rates and a robust employee value proposition, indicating a favorable hiring environment [100] Question: How did the reactive and proactive business lines perform? - The reactive side was stronger, particularly in litigation and recall-related work, while proactive engagements faced some delays due to client adjustments in response to market uncertainty [102][94] Question: Has there been any impact from recent layoffs in the tech sector? - Management noted that while some clients are resetting their teams, the demand for Exponent's services remains stable, and they have not observed a significant impact from the layoffs [109]

Financial Performance - Revenues for 2022 increased by 10.1% to $513,293,000 compared to $466,269,000 in 2021, driven by an increase in billable hours and billing rates [162]. - Net income for 2022 was $102,330,000, a slight increase from $101,202,000 in 2021, with diluted earnings per share rising to $1.96 from $1.90 [165]. - Total operating income increased by 29.3% to $140,842,000 in 2022 from $108,927,000 in 2021, driven by higher revenues in the Engineering and Other Scientific segment [180]. - Revenues before reimbursements rose to $463,820,000 in 2022, up from $434,850,000 in 2021, with EBITDA at $137,217,000, representing 29.6% of revenues [196]. Expenses and Costs - Compensation and related expenses decreased by 5.0% to $264,235,000, representing 51.5% of total revenues in 2022, down from 59.6% in 2021 [173]. - General and administrative expenses increased by 54.8% to $23,660,000, representing 4.6% of total revenues, up from 3.3% in 2021 [177]. - Other income decreased significantly by 150.9% to $(8,608,000) in 2022 from $16,910,000 in 2021, primarily due to changes in the value of assets associated with the deferred compensation plan [184]. - The corporate operating expenses decreased by 34.1% to $(39,177,000) in 2022 from $(59,425,000) in 2021, mainly due to a reduction in deferred compensation expenses [183]. Operational Metrics - Billable hours increased by 4% to 1,465,000 in 2022 from 1,405,000 in 2021, while technical full-time equivalent employees rose by 6% to 955 [169]. - Utilization rates decreased slightly to 74% in 2022 from 75% in 2021, indicating a need for continued focus on efficiency [169]. - The utilization rate decreased to 74% in 2022 from 75% in 2021, impacting EBITDA margins [196]. Segment Performance - The Engineering and Other Scientific segment saw revenues rise by 12.3% to $427,796,000, while the Environmental and Health segment's revenues increased by 0.2% to $85,497,000 [170]. Cash Flow and Taxation - Net cash provided by operating activities was $93,807,000 in 2022, down from $124,568,000 in 2021, indicating a decrease in cash flow generation [187]. - The effective tax rate increased to 22.6% in 2022 from 19.6% in 2021, attributed to a decrease in excess tax benefits from stock-based awards [186]. Future Outlook and Investments - The company plans to continue expanding its capabilities through selective hiring and investments in corporate infrastructure to enhance service offerings [166]. - Capital expenditures are expected to continue, with cash reserves potentially used for stock repurchases, dividends, and strategic acquisitions [192]. Foreign Currency Exposure - The company had net assets of approximately $10.7 million in British Pounds, $1.8 million in Chinese Yuan, and $1.1 million in Hong Kong Dollars as of December 30, 2022, indicating exposure to foreign currency risks [201]. - The company does not use foreign exchange contracts to hedge currency exposures, which may affect future results due to international expansion [203].

Financial Data and Key Metrics Changes - For fiscal year 2022, total revenues increased by 10.1% to $513.3 million, while net revenues rose by 6.7% to $463.8 million compared to 2021 [11] - Net income for the year increased by 1.1% to $102.3 million, maintaining earnings per diluted share at $1.96 [11] - EBITDA for the year increased by 3.8% to $137.2 million, resulting in an EBITDA margin of 29.6% of net revenues [11] Business Line Data and Key Metrics Changes - The engineering and other scientific segments accounted for 83% of net revenues, with a 10% increase in Q4 and an 8% increase for the full year [6] - The environmental and health segment represented 17% of net revenues, with a 2% decrease in Q4 and flat growth for the full year [6] - Proactive services saw strong demand in user experience research and machine learning studies, while reactive services experienced robust demand in litigation and product safety [5] Market Data and Key Metrics Changes - Billable hours for 2022 were approximately 1,465,000, an increase of 4.2% year-over-year [12] - Utilization for the full year was 73.8%, down from 75.1% in 2021, reflecting increased headcount [12] - The realized rate increase was approximately 2.5% for the year 2022 [12] Company Strategy and Development Direction - The company aims to evolve its service portfolio to meet rising societal expectations for safety, health, and sustainability [6] - Exponent is focused on capitalizing on disruptive trends and enhancing its capabilities in response to complex innovations [6] - The company plans to continue investing in talent and client relationships, particularly in the digital health and life sciences sectors [31] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to grow profitably despite macroeconomic challenges, citing the critical nature of their work [21] - For 2023, the company expects revenue growth in the high single to low double digits, with an EBITDA margin of 28% to 28.5% [13] - The anticipated headcount growth for 2023 is 6% to 8%, with a slight decrease in utilization expected [13] Other Important Information - The company generated $93.8 million in cash from operations in 2022 and had $161.5 million in cash at year-end [12] - G&A expenses increased by 54.8% to $23.7 million in 2022, primarily due to in-person meetings and increased marketing efforts [12] - The tax benefit associated with share-based awards for 2023 is expected to be approximately $3 million, impacting net income [15] Q&A Session Summary Question: Margin guidance assumptions for 2023 - Management confirmed that the guidance for other operating and G&A costs reflects a return to normalized levels in 2023 [18] Question: Consultant compensation rates and realized rate gains - Management expects stronger pricing increases compared to the previous year, anticipating growth in compensation for consulting staff [20] Question: Impact of economic conditions on proactive business - Management noted that the critical nature of their work continues to support demand, despite potential client spending pullbacks [21] Question: Growth algorithm for headcount and pricing - Management indicated that a growth expectation of 6% to 8% in headcount and 3% to 4% in pricing is reasonable for the medium to long term [26] Question: Update on digital health and pharma focus - Management reported increased traction in the digital health space, with ongoing investments in talent and client relationships [31]

[PART I – FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20%E2%80%93%20FINANCIAL%20INFORMATION) This section presents the Company's unaudited condensed consolidated financial statements and management's discussion and analysis [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents Exponent, Inc.'s unaudited condensed consolidated financial statements and related notes for interim periods [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This statement provides a snapshot of the Company's financial position at specific interim dates Assets (in thousands) | Assets (in thousands) | September 30, 2022 (in thousands) | December 31, 2021 (in thousands) | | :-------------------- | :----------------- | :---------------- | | Cash and cash equivalents | $148,443 | $297,687 | | Accounts receivable, net | $166,014 | $139,861 | | Total current assets | $332,512 | $452,762 | | Total assets | $559,003 | $683,739 | Liabilities and Stockholders' Equity (in thousands) | Liabilities and Stockholders' Equity (in thousands) | September 30, 2022 (in thousands) | December 31, 2021 (in thousands) | | :------------------------------------------------ | :----------------- | :---------------- | | Total current liabilities | $137,917 | $152,982 | | Total liabilities | $239,203 | $266,674 | | Total stockholders' equity | $319,800 | $417,065 | | Total liabilities and stockholders' equity | $559,003 | $683,739 | [Condensed Consolidated Statements of Income](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) This statement details the Company's revenues, expenses, and net income over specific interim periods (in thousands, except per share data) | (in thousands, except per share data) | Three Months Ended Sep 30, 2022 (in thousands) | Three Months Ended Oct 1, 2021 (in thousands) | Nine Months Ended Sep 30, 2022 (in thousands) | Nine Months Ended Oct 1, 2021 (in thousands) | | :------------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | :---------------------------- | | Revenues before reimbursements | $115,143 | $108,467 | $351,231 | $330,514 | | Revenues | $127,179 | $116,405 | $385,938 | $352,763 | | Operating income | $36,813 | $32,119 | $118,807 | $85,549 | | Net income | $24,442 | $24,574 | $79,806 | $80,822 | | Basic Net income per share | $0.47 | $0.47 | $1.54 | $1.54 | | Diluted Net income per share | $0.47 | $0.46 | $1.52 | $1.52 | | Cash dividends declared per common share | $0.24 | $0.20 | $0.72 | $0.60 | [Condensed Consolidated Statements of Comprehensive Income](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) This statement presents net income and other comprehensive income components for interim periods (in thousands) | (in thousands) | Three Months Ended Sep 30, 2022 (in thousands) | Three Months Ended Oct 1, 2021 (in thousands) | Nine Months Ended Sep 30, 2022 (in thousands) | Nine Months Ended Oct 1, 2021 (in thousands) | | :------------- | :------------------------------ | :----------------------------- | :----------------------------- | :---------------------------- | | Net income | $24,442 | $24,574 | $79,806 | $80,822 | | Other comprehensive income (loss): Foreign currency translation adjustments, net of tax | $(1,493) | $(266) | $(3,153) | $(55) | | Comprehensive income | $22,949 | $24,308 | $76,653 | $80,702 | [Condensed Consolidated Statements of Stockholders' Equity](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders%20Equity) This statement outlines changes in the Company's equity accounts over interim periods - **Total stockholders' equity decreased** from **$417.1 million** at **December 31, 2021**, to **$319.8 million** at **September 30, 2022**, **primarily due to** treasury stock repurchases and dividends[19](index=19&type=chunk) (In thousands) | (In thousands) | Balance at Dec 31, 2021 (in thousands) | Balance at Sep 30, 2022 (in thousands) | | :------------- | :---------------------- | :---------------------- | | Common Stock | $66 | $66 | | Additional paid-in capital | $281,419 | $298,589 | | Accumulated other comprehensive loss | $(1,983) | $(5,136) | | Retained earnings | $478,370 | $518,631 | | Treasury stock | $(340,807) | $(492,350) | | Total stockholders' equity | $417,065 | $319,800 | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This statement summarizes cash inflows and outflows from operating, investing, and financing activities (in thousands) | (in thousands) | Nine Months Ended Sep 30, 2022 (in thousands) | Nine Months Ended Oct 1, 2021 (in thousands) | | :------------------------------------------------ | :----------------------------- | :---------------------------- | | Net cash provided by operating activities | $53,237 | $70,378 | | Net cash (used in) provided by investing activities | $(9,108) | $14,569 | | Net cash used in financing activities | $(190,556) | $(52,766) | | Net change in cash and cash equivalents | $(149,244) | $32,260 | | Cash and cash equivalents at end of period | $148,443 | $229,785 | [Notes to Unaudited Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures for the financial statements [Note 1: Basis of Presentation](index=9&type=section&id=Note%201:%20Basis%20of%20Presentation) The financial statements are unaudited, prepared under GAAP for interim reporting, and consolidate all subsidiaries - **Exponent, Inc.** is an engineering and scientific consulting firm providing solutions to complex problems[30](index=30&type=chunk) - The unaudited condensed consolidated financial statements are prepared in accordance with **GAAP** for interim financial information and include all wholly-owned subsidiaries[31](index=31&type=chunk)[32](index=32&type=chunk) [Note 2: Revenue Recognition](index=9&type=section&id=Note%202:%20Revenue%20Recognition) Revenue is primarily recognized from time and materials and fixed-price contracts over time - Substantially all engagements are under **Time and materials** or fixed-price arrangements[34](index=34&type=chunk) Revenue Type | Revenue Type | Sep 30, 2022 (3 Months) | Oct 1, 2021 (3 Months) | Sep 30, 2022 (9 Months) | Oct 1, 2021 (9 Months) | | :------------- | :---------------------- | :--------------------- | :---------------------- | :--------------------- | | Time and materials | **78%** | **78%** | **79%** | **79%** | | Fixed price | **22%** | **22%** | **21%** | **21%** | - **Deferred revenues** of **$6.3 million** (**Q3 2022**) and **$14.2 million** (**9M 2022**) were recognized from prior period balances[38](index=38&type=chunk) [Note 3: Fair Value Measurements](index=11&type=section&id=Note%203:%20Fair%20Value%20Measurements) Certain financial assets and liabilities are measured at fair value, primarily classified as Level 1 (In thousands) Assets | (In thousands) Assets | September 30, 2022 Total (in thousands) | September 30, 2022 Level 1 (in thousands) | | :-------------------- | :----------------------- | :------------------------- | | Money market securities | $51,794 | $51,794 | | Fixed income trading securities held in deferred compensation plan | $33,772 | $33,772 | | Equity trading securities held in deferred compensation plan | $60,807 | $60,807 | | Total Assets | $146,373 | $146,373 | (In thousands) Liabilities | (In thousands) Liabilities | September 30, 2022 Total (in thousands) | September 30, 2022 Level 1 (in thousands) | | :------------------------- | :----------------------- | :------------------------- | | Deferred compensation plan | $94,502 | $94,502 | | Total Liabilities | $94,502 | $94,502 | - All fair value measurements for **money market securities** and **deferred compensation plan** trading securities are classified as **Level 1**[41](index=41&type=chunk)[44](index=44&type=chunk) - **Cash and cash equivalents decreased** from **$297.7 million** at **December 31, 2021**, to **$148.4 million** at **September 30, 2022**[45](index=45&type=chunk)[47](index=47&type=chunk) [Note 4: Net Income Per Share](index=13&type=section&id=Note%204:%20Net%20Income%20Per%20Share) Basic and diluted net income per share are calculated using weighted-average common shares outstanding (In thousands) Shares used in per share computations | (In thousands) Shares used in per share computations | Three Months Ended Sep 30, 2022 | Three Months Ended Oct 1, 2021 | Nine Months Ended Sep 30, 2022 | Nine Months Ended Oct 1, 2021 | | :--------------------------------------------------- | :------------------------------ | :----------------------------- | :----------------------------- | :---------------------------- | | Basic | 51,492 | 52,618 | 51,934 | 52,597 | | Dilutive common stock options | 202 | 245 | 202 | 239 | | Dilutive restricted stock units | 314 | 449 | 353 | 480 | | Diluted | 52,008 | 53,312 | 52,489 | 53,316 | [Note 5: Stock-Based Compensation](index=13&type=section&id=Note%205:%20Stock-Based%20Compensation) Compensation expense for restricted stock units and stock options is recognized over their vesting periods - **Stock-based compensation expense** for **accrued bonus awards** was **$2.6 million** (**Q3 2022**) and **$8.1 million** (**9M 2022**)[54](index=54&type=chunk) - **Stock-based compensation expense** for **unvested RSUs** was **$1.8 million** (**Q3 2022**) and **$7.3 million** (**9M 2022**)[54](index=54&type=chunk) - **Stock-based compensation expense** for **stock options** was **$212 thousand** (**Q3 2022**) and **$623 thousand** (**9M 2022**)[55](index=55&type=chunk) [Note 6: Deferred Compensation Plans](index=15&type=section&id=Note%206:%20Deferred%20Compensation%20Plans) Nonqualified deferred compensation plans for highly compensated employees impact compensation expense and other income - **Invested amounts** under **deferred compensation plans totaled** **$94.6 million** at **September 30, 2022**, and **$109.3 million** at **December 31, 2021**[60](index=60&type=chunk) - **Vested amounts** **due under the plans totaled** **$94.5 million** at **September 30, 2022**, and **$110.4 million** at **December 31, 2021**[61](index=61&type=chunk) - A **reduction in compensation expense** of **$4.9 million** (**Q3 2022**) and **$20.9 million** (**9M 2022**) was recognized **due to** changes in the market value of trust assets, with a corresponding loss in miscellaneous income (expense), net[61](index=61&type=chunk) [Note 7: Supplemental Cash Flow Information](index=15&type=section&id=Note%207:%20Supplemental%20Cash%20Flow%20Information) This note provides additional details on cash paid for income taxes and non-cash investing/financing activities (In thousands) | (In thousands) | Nine Months Ended Sep 30, 2022 (in thousands) | Nine Months Ended Oct 1, 2021 (in thousands) | | :------------- | :----------------------------- | :---------------------------- | | Cash paid for income taxes | $24,349 | $16,481 | | Vested stock unit awards issued to settle accrued bonuses | $10,200 | $7,637 | | Right-of-use asset obtained in exchange for operating lease obligations | $8,090 | $792 | [Note 8: Accounts Receivable, Net](index=15&type=section&id=Note%208:%20Accounts%20Receivable,%20Net) Accounts receivable includes billed and unbilled amounts, net of an allowance for losses (In thousands) | (In thousands) | September 30, 2022 (in thousands) | December 31, 2021 (in thousands) | | :------------- | :----------------- | :---------------- | | Billed accounts receivable | $110,428 | $102,028 | | Unbilled accounts receivable | $61,743 | $42,256 | | Allowance for contract losses and doubtful accounts | $(6,157) | $(4,423) | | Total accounts receivable, net | $166,014 | $139,861 | (In thousands) Allowance for contract losses and doubtful accounts | (In thousands) Allowance for contract losses and doubtful accounts | Amount (in thousands) | | :----------------------------------------------------------------- | :----- | | Balance at December 31, 2021 | $4,423 | | Provision for contract losses and doubtful accounts | $2,112 | | Write-offs | $(378) | | Balance at September 30, 2022 | $6,157 | [Note 9: Segment Reporting](index=16&type=section&id=Note%209:%20Segment%20Reporting) The Company operates in Engineering and Other Scientific, and Environmental and Health segments - The **Company** has two reportable operating segments: **Engineering and Other Scientific**, and **Environmental and Health**[67](index=67&type=chunk) (In thousands) Revenues | (In thousands) Revenues | Three Months Ended Sep 30, 2022 (in thousands) | Three Months Ended Oct 1, 2021 (in thousands) | Nine Months Ended Sep 30, 2022 (in thousands) | Nine Months Ended Oct 1, 2021 (in thousands) | | :---------------------- | :------------------------------ | :----------------------------- | :----------------------------- | :---------------------------- | | Engineering and Other Scientific | $107,403 | $97,100 | $321,168 | $288,848 | | Environmental and Health | $19,776 | $19,305 | $64,770 | $63,915 | | Total revenues | $127,179 | $116,405 | $385,938 | $352,763 | (In thousands) Operating Income | (In thousands) Operating Income | Three Months Ended Sep 30, 2022 (in thousands) | Three Months Ended Oct 1, 2021 (in thousands) | Nine Months Ended Sep 30, 2022 (in thousands) | Nine Months Ended Oct 1, 2021 (in thousands) | | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | :---------------------------- | | Engineering and Other Scientific | $39,385 | $36,676 | $117,907 | $108,646 | | Environmental and Health | $6,378 | $5,851 | $21,059 | $21,265 | | Total segment operating income | $45,763 | $42,527 | $138,966 | $129,911 | | Corporate operating expense | $(8,950) | $(10,408) | $(20,159) | $(44,362) | | Total operating income | $36,813 | $32,119 | $118,807 | $85,549 | - **One client accounted for** **16%** (**Q3 2022**) and **15%** (**9M 2022**) of **total revenues**[71](index=71&type=chunk) [Note 10: Leases](index=17&type=section&id=Note%2010:%20Leases) The Company primarily leases office and laboratory space, recognizing right-of-use assets and liabilities - The **Company leases** office, laboratory, and storage space in 13 states, D.C., and internationally (China, Hong Kong, Singapore, Switzerland, UK)[74](index=74&type=chunk) - Rental income from leasing excess space was **$739 thousand** (**Q3 2022**) and **$2.2 million** (**9M 2022**)[77](index=77&type=chunk) (In thousands) Lease Expense | (In thousands) Lease Expense | Three Months Ended Sep 30, 2022 (in thousands) | Three Months Ended Oct 1, 2021 (in thousands) | Nine Months Ended Sep 30, 2022 (in thousands) | Nine Months Ended Oct 1, 2021 (in thousands) | | :--------------------------- | :------------------------------ | :----------------------------- | :----------------------------- | :---------------------------- | | Operating lease cost | $1,681 | $1,635 | $5,247 | $4,896 | | Variable lease cost | $274 | $246 | $913 | $793 | | Short-term lease cost | $194 | $68 | $425 | $319 | - **Weighted Average Remaining Lease Term**: **4.3 years** (**Sep 30, 2022**); **Weighted Average Discount Rate**: **4.0%** (**Sep 30, 2022**)[78](index=78&type=chunk) [Note 11: Contingencies](index=19&type=section&id=Note%2011:%20Contingencies) The Company is involved in legal actions, but their outcome is not expected to materially affect financials - The **Company** is a party to various legal actions, but the outcome is not expected to have a **material adverse effect** on financial condition, results of operations, or liquidity[80](index=80&type=chunk) [Note 12: Subsequent Events](index=19&type=section&id=Note%2012:%20Subsequent%20Events) A cash dividend of $0.24 per share was declared post-period end - A **cash dividend** of **$0.24** per share was declared on **October 27, 2022**, payable **December 23, 2022**[81](index=81&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=20&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the Company's financial condition and operating results for the interim periods [Forward-Looking Statements](index=20&type=section&id=Forward-Looking%20Statements) This section highlights forward-looking statements subject to various risks and uncertainties - The report contains **forward-looking statements** subject to risks and uncertainties, including global economic downturn, COVID-19 impacts, demand for services, competition, ability to attract and retain employees, and tort reform[84](index=84&type=chunk) [Business Overview](index=20&type=section&id=Business%20Overview) Exponent, Inc. is an engineering and scientific consulting firm offering multidisciplinary expertise - **Exponent, Inc.** is an engineering and scientific consulting firm offering multidisciplinary expertise (over 90 technical disciplines) to solve complex problems in product development, recall, regulatory compliance, and litigation support[85](index=85&type=chunk) [Critical Accounting Estimates](index=20&type=section&id=Critical%20Accounting%20Estimates) No significant changes in critical accounting estimates occurred during the nine months ended September 30, 2022 - **No significant changes** in **critical accounting estimates occurred** during the **nine months ended September 30, 2022**, compared to the prior fiscal year[86](index=86&type=chunk) [Results of Consolidated Operations](index=21&type=section&id=Results%20of%20Consolidated%20Operations) This section analyzes the Company's consolidated operational performance, including revenues and expenses [Revenues](index=21&type=section&id=Revenues) Revenues increased due to proactive and reactive engagements across various industries Revenues (in thousands, except percentages) | Segment | Three Months Ended Sep 30, 2022 (in thousands) | Three Months Ended Oct 1, 2021 (in thousands) | Percent Change | | :------------------------------ | :------------------------------ | :----------------------------- | :------------- | | Engineering and Other Scientific | $107,403 | $97,100 | 10.6% | | Environmental and Health | $19,776 | $19,305 | 2.4% | | Total revenues | $127,179 | $116,405 | 9.3% | Revenues (in thousands, except percentages) | Segment | Nine Months Ended Sep 30, 2022 (in thousands) | Nine Months Ended Oct 1, 2021 (in thousands) | Percent Change | | :------------------------------ | :----------------------------- | :---------------------------- | :------------- | | Engineering and Other Scientific | $321,168 | $288,848 | 11.2% | | Environmental and Health | $64,770 | $63,915 | 1.3% | | Total revenues | $385,938 | $352,763 | 9.4% | - **Q3 2022 revenues increased** **9%** to **$127.2 million**, driven by proactive engagements in consumer products and transportation (virtual reality, wearable technologies, energy storage) and reactive business from litigation and product safety/recall work[89](index=89&type=chunk)[90](index=90&type=chunk) - **9M 2022 revenues increased** **9.4%** to **$385.9 million**, with growth across a broad range of industries, including electric vehicles, energy storage, international arbitrations, and integrity management advisory services[109](index=109&type=chunk) [Compensation and Related Expenses](index=22&type=section&id=Compensation%20and%20Related%20Expenses) Compensation expenses decreased primarily due to changes in deferred compensation expense Compensation and Related Expenses (in thousands, except percentages) | Expense Category | Three Months Ended Sep 30, 2022 (in thousands) | Three Months Ended Oct 1, 2021 (in thousands) | Percent Change | | :--------------- | :------------------------------ | :----------------------------- | :------------- | | Compensation and related expenses | $62,779 | $64,138 | -2.1% | | Percentage of total revenues | 49.4% | 55.1% | | Compensation and Related Expenses (in thousands, except percentages) | Expense Category | Nine Months Ended Sep 30, 2022 (in thousands) | Nine Months Ended Oct 1, 2021 (in thousands) | Percent Change | | :--------------- | :----------------------------- | :---------------------------- | :------------- | | Compensation and related expenses | $189,982 | $210,491 | -9.7% | | Percentage of total revenues | 49.2% | 59.7% | | - **Q3 2022 compensation expenses decreased** **2.1%** **due to** a **$4.7 million decreased** in **deferred compensation expense**, partially offset by **increased** payroll and fringe benefits from annual salary adjustments and higher technical full-time equivalent employees[97](index=97&type=chunk) - **9M 2022 compensation expenses decreased** **9.7%** **due to** a **$30.9 million decreased** in **deferred compensation expense**, partially offset by **increases** in payroll, fringe benefits, and bonus expense[111](index=111&type=chunk) [Other Operating Expenses](index=22&type=section&id=Other%20Operating%20Expenses) Other operating expenses increased due to higher occupancy, IT, and office costs reflecting growth Other Operating Expenses (in thousands, except percentages) | Expense Category | Three Months Ended Sep 30, 2022 (in thousands) | Three Months Ended Oct 1, 2021 (in thousands) | Percent Change | | :--------------- | :------------------------------ | :----------------------------- | :------------- | | Other operating expenses | $8,822 | $8,017 | 10.0% | | Percentage of total revenues | 6.9% | 6.9% | | Other Operating Expenses (in thousands, except percentages) | Expense Category | Nine Months Ended Sep 30, 2022 (in thousands) | Nine Months Ended Oct 1, 2021 (in thousands) | Percent Change | | :--------------- | :----------------------------- | :---------------------------- | :------------- | | Other operating expenses | $25,742 | $23,848 | 7.9% | | Percentage of total revenues | 6.7% | 6.8% | | - **Q3 2022 other operating expenses increased** **10.0%** **due to** higher occupancy, IT-related, and office expenses, reflecting growth in employees and return to office[98](index=98&type=chunk) - **9M 2022 other operating expenses increased** **7.9%** **due to** **increased** occupancy, IT-related, and depreciation expenses, driven by employee growth and corporate infrastructure investments[113](index=113&type=chunk) [Reimbursable Expenses](index=22&type=section&id=Reimbursable%20Expenses) Reimbursable expenses significantly increased due to higher project-related travel as restrictions eased Reimbursable Expenses (in thousands, except percentages) | Expense Category | Three Months Ended Sep 30, 2022 (in thousands) | Three Months Ended Oct 1, 2021 (in thousands) | Percent Change | | :--------------- | :------------------------------ | :----------------------------- | :------------- | | Reimbursable expenses | $12,036 | $7,938 | 51.6% | | Percentage of total revenues | 9.5% | 6.8% | | Reimbursable Expenses (in thousands, except percentages) | Expense Category | Nine Months Ended Sep 30, 2022 (in thousands) | Nine Months Ended Oct 1, 2021 (in thousands) | Percent Change | | :--------------- | :----------------------------- | :---------------------------- | :------------- | | Reimbursable expenses | $34,707 | $22,249 | 56.0% | | Percentage of total revenues | 9.0% | 6.3% | | - **Reimbursable expenses increased significantly** (**51.6%** in **Q3**, **56.0%** in **9M**) **due to increased** project-related travel and other expenses as COVID-19 restrictions eased[100](index=100&type=chunk)[114](index=114&type=chunk) [General and Administrative Expenses](index=23&type=section&id=General%20and%20Administrative%20Expenses) General and administrative expenses rose due to increased travel, consulting, and recruiting costs General and Administrative Expenses (in thousands, except percentages) | Expense Category | Three Months Ended Sep 30, 2022 (in thousands) | Three Months Ended Oct 1, 2021 (in thousands) | Percent Change | | :--------------- | :------------------------------ | :----------------------------- | :------------- | | General and administrative expenses | $6,729 | $4,193 | 60.5% | | Percentage of total revenues | 5.3% | 3.6% | | General and Administrative Expenses (in thousands, except percentages) | Expense Category | Nine Months Ended Sep 30, 2022 (in thousands) | Nine Months Ended Oct 1, 2021 (in thousands) | Percent Change | | :--------------- | :----------------------------- | :---------------------------- | :------------- | | General and administrative expenses | $16,700 | $10,626 | 57.2% | | Percentage of total revenues | 4.3% | 3.0% | | - **Q3 2022 general and administrative expenses increased** **60.5%** **due to** higher travel and meals (firm-wide meeting, easing restrictions), **increased** outside consulting, and recruiting expenses[101](index=101&type=chunk) - **9M 2022 general and administrative expenses increased** **57.2%** **due to significant increases** in travel and meals, outside consulting, recruiting, and marketing/business development expenses[115](index=115&type=chunk) [Operating Income](index=23&type=section&id=Operating%20Income) Operating income increased, driven by revenue growth and reduced corporate operating expenses Operating Income (in thousands, except percentages) | Segment | Three Months Ended Sep 30, 2022 (in thousands) | Three Months Ended Oct 1, 2021 (in thousands) | Percent Change | | :------------------------------ | :------------------------------ | :----------------------------- | :------------- | | Engineering and Other Scientific | $39,385 | $36,676 | 7.4% | | Environmental and Health | $6,378 | $5,851 | 9.0% | | Total segment operating income | $45,763 | $42,527 | 7.6% | | Corporate operating expense | $(8,950) | $(10,408) | -14.0% | | Total operating income | $36,813 | $32,119 | 14.6% | Operating Income (in thousands, except percentages) | Segment | Nine Months Ended Sep 30, 2022 (in thousands) | Nine Months Ended Oct 1, 2021 (in thousands) | Percent Change | | :------------------------------ | :----------------------------- | :---------------------------- | :------------- | | Engineering and Other Scientific | $117,907 | $108,646 | 8.5% | | Environmental and Health | $21,059 | $21,265 | -1.0% | | Total segment operating income | $138,966 | $129,911 | 7.0% | | Corporate operating expense | $(20,159) | $(44,362) | -54.6% | | Total operating income | $118,807 | $85,549 | 38.9% | - **Q3 2022 total operating income increased** **14.6%** to **$36.8 million**, driven by revenue growth in both segments and a **decrease** in **corporate operating expenses** **due to** lower **deferred compensation expense**[102](index=102&type=chunk)[105](index=105&type=chunk) - **9M 2022 total operating income increased** **38.9%** to **$118.8 million**, **primarily due to** revenue growth in **Engineering and Other Scientific** and a significant **decrease** in **corporate operating expenses** from deferred compensation adjustments[117](index=117&type=chunk)[119](index=119&type=chunk) [Other Income, Net](index=24&type=section&id=Other%20Income,%20Net) Other income, net, decreased significantly due to changes in deferred compensation plan asset values Other Income, Net (in thousands, except percentages) | Category | Three Months Ended Sep 30, 2022 (in thousands) | Three Months Ended Oct 1, 2021 (in thousands) | Percent Change | | :------- | :------------------------------ | :----------------------------- | :------------- | | Other income, net | $(3,337) | $270 | -1335.9% | | Percentage of total revenues | -2.6% | 0.2% | | Other Income, Net (in thousands, except percentages) | Category | Nine Months Ended Sep 30, 2022 (in thousands) | Nine Months Ended Oct 1, 2021 (in thousands) | Percent Change | | :------- | :----------------------------- | :---------------------------- | :------------- | | Other income, net | $(17,092) | $11,633 | -246.9% | | Percentage of total revenues | -4.4% | 3.3% | | - **Q3 2022 other income, net, decreased significantly** **due to** a **$4.7 million decreased** from changes in **deferred compensation plan** asset values, partially offset by gains on foreign exchange and **increased** interest income[106](index=106&type=chunk) - **9M 2022 other income, net, decreased significantly** **due to** a **$30.9 million decreased** from changes in **deferred compensation plan** asset values, partially offset by a realized gain on foreign exchange and **increased** interest income[120](index=120&type=chunk) [Income Taxes](index=24&type=section&id=Income%20Taxes) Income tax expense increased due to a lower excess tax benefit from stock-based awards Income Taxes (in thousands, except percentages) | Category | Three Months Ended Sep 30, 2022 (in thousands) | Three Months Ended Oct 1, 2021 (in thousands) | Percent Change | | :------- | :------------------------------ | :----------------------------- | :------------- | | Income taxes | $9,034 | $7,815 | 15.6% | | Percentage of total revenues | 7.1% | 6.7% | | | Effective tax rate | 27.0% | 24.1% | | Income Taxes (in thousands, except percentages) | Category | Nine Months Ended Sep 30, 2022 (in thousands) | Nine Months Ended Oct 1, 2021 (in thousands) | Percent Change | | :------- | :----------------------------- | :---------------------------- | :------------- | | Income taxes | $21,909 | $16,360 | 33.9% | | Percentage of total revenues | 5.7% | 4.6% | | | Effective tax rate | 21.5% | 16.8% | | - **Q3 2022 income tax expense increased** **15.6%** **due to** a **decrease** in the excess tax benefit associated with stock-based awards (zero in **Q3 2022** vs **$1.1 million** in **Q3 2021**)[107](index=107&type=chunk) - **9M 2022 income tax expense increased** **33.9%**, with the effective tax rate rising to **21.5%** (from **16.8%**), **primarily due to** a lower excess tax benefit from stock-based awards and an **increase** in non-deductible officer compensation[122](index=122&type=chunk) [Liquidity and Capital Resources](index=29&type=section&id=Liquidity%20and%20Capital%20Resources) The Company's liquidity is supported by cash and operating cash flow, despite increased share repurchases - **Cash and cash equivalents** were **$148.4 million** at **September 30, 2022**, down from **$297.7 million** at **December 31, 2021**[125](index=125&type=chunk) (in thousands) Cash Flows | (in thousands) Cash Flows | Nine Months Ended Sep 30, 2022 (in thousands) | Nine Months Ended Oct 1, 2021 (in thousands) | | :------------------------ | :----------------------------- | :---------------------------- | | Net cash provided by operating activities | $53,237 | $70,378 | | Net cash (used in) / provided by investing activities | $(9,108) | $14,569 | | Net cash used in financing activities | $(190,556) | $(52,766) | - The **increase** in **net cash used in financing activities** was **due to increased** common stock repurchases and dividends[128](index=128&type=chunk) [Non-GAAP Financial Measures](index=30&type=section&id=Non-GAAP%20Financial%20Measures) EBITDA and EBITDAS are non-GAAP measures used for internal evaluation, budgeting, and compensation - **EBITDA** and **EBITDAS** are **non-GAAP measures** used to evaluate **operating performance**, develop budgets, and determine employee compensation[133](index=133&type=chunk) EBITDA and EBITDAS Reconciliation (in thousands) | (in thousands) | Three Months Ended Sep 30, 2022 (in thousands) | Three Months Ended Oct 1, 2021 (in thousands) | Nine Months Ended Sep 30, 2022 (in thousands) | Nine Months Ended Oct 1, 2021 (in thousands) | | :------------- | :------------------------------ | :----------------------------- | :----------------------------- | :---------------------------- | | Net income | $24,442 | $24,574 | $79,806 | $80,822 | | EBITDA | $34,561 | $34,021 | $106,105 | $102,071 | | Stock-based compensation | $4,605 | $4,365 | $16,072 | $15,239 | | EBITDAS | $39,166 | $38,386 | $122,177 | $117,310 | - **EBITDA** as a percentage of revenues before reimbursements **decreased** in both **Q3 2022** (**30.0%** vs **31.4%**) and **9M 2022** (**30.2%** vs **30.9%**) **due to** lower utilization and **increased** operating and G&A expenses[134](index=134&type=chunk)[136](index=136&type=chunk)[137](index=137&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=32&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The Company is exposed to interest rate risk and foreign currency risk from international operations - The **Company manages interest rate risk** by investing in debt instruments with high credit quality and short average effective maturities (max 3 years, portfolio max 12 months)[140](index=140&type=chunk) - **Foreign currency risk exists** for revenues and expenses in **British Pound**, **Chinese Yuan**, and **Hong Kong Dollar**[141](index=141&type=chunk) - **Net assets denominated in non-functional currencies** were approximately **$8.3 million** at **September 30, 2022**[143](index=143&type=chunk) [Item 4. Controls and Procedures](index=32&type=section&id=Item%204.%20Controls%20and%20Procedures) Disclosure controls and procedures were effective, with no material changes in internal control over financial reporting - The **Company's disclosure controls and procedures** were **effective** as of **September 30, 2022**[145](index=145&type=chunk) - **No material changes** in **internal control over financial reporting occurred** during the **three months ended September 30, 2022**[147](index=147&type=chunk) [PART II – OTHER INFORMATION](index=33&type=section&id=PART%20II%20%E2%80%93%20OTHER%20INFORMATION) This section provides additional information on legal proceedings, risk factors, and equity sales [Item 1. Legal Proceedings](index=33&type=section&id=Item%201.%20Legal%20Proceedings) Exponent is not currently involved in any material legal proceedings - **Exponent** is not engaged in any **material legal proceedings**[149](index=149&type=chunk) [Item 1A. Risk Factors](index=33&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the risk factors previously disclosed in the Company's 2021 Annual Report - **No material changes** from risk factors previously discussed in the **Company's 2021 Annual Report**[150](index=150&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=33&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Details of common stock repurchases under publicly announced programs for the period Period | Period | Total Number of Shares Purchased (in thousands) | Average Price Per Share (in thousands) | Approximate Dollar Value of Shares That May Yet Be Purchased Under the Programs (in thousands) | | :----- | :---------------------------------------------- | :---------------------- | :------------------------------------------------------------------------------------------- | | August 27 to September 30 | 334 | $92.04 | $75,828 | | Total | 334 | $92.04 | $75,828 | - The **Company's Board of Directors authorized** **$45.0 million** (**May 2020**) and an additional **$150.0 million** (**February 2022**) for **common stock repurchases**, with no expiration dates[151](index=151&type=chunk) [Item 3. Defaults Upon Senior Securities](index=33&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This item is not applicable to the Company for the reporting period [Item 4. Mine Safety Disclosures](index=33&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the Company for the reporting period [Item 5. Other Information](index=33&type=section&id=Item%205.%20Other%20Information) This item is not applicable to the Company for the reporting period [Item 6. Exhibits](index=34&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed as part of the Form 10-Q, including certifications - **Exhibits include CEO and CFO certifications** (Rule 13a-14(a) and 18 U.S.C. Section 1350) and various Inline XBRL documents[157](index=157&type=chunk) [SIGNATURES](index=35&type=section&id=SIGNATURES) This section contains the required signatures for the Form 10-Q filing

Exponent, Inc. (NASDAQ:EXPO) Q3 2022 Earnings Conference Call October 27, 2022 4:30 PM ET Company Participants Joni Konstantelos - Investor Relations Catherine Ford Corrigan - President and Chief Executive Officer Richard Schlenker - Executive Vice President, Chief Financial Officer & Corporate Secretary Conference Call Participants Operator Good day and welcome to the Exponent, Incoporated Third Quarter of Fiscal Year 2022 Financial Results Conference Call. Today's conference is being recorded. And now at ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended July 1, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ____________ to___________ Commission File Number 0-18655 EXPONENT, INC. (Exact name of registrant as specified in its charter) | --- | --- | |----------------- ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q 94025 (ZipCode) (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended April 1, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ____________ to___________ Commission File Number 0-18655 EXPONENT, INC. (Exact name of registrant as specified in its charter) DELAWARE 77-021 ...

Exponent, Inc. (NASDAQ:EXPO) Q1 2022 Earnings Conference Call April 28, 2022 4:30 PM ET Company Participants Joni Konstantelos - Investor Relations Catherine Corrigan - President and Chief Executive Officer Rich Schlenker - Executive Vice President and Chief Financial Officer Conference Call Participants Andrew Nicholas - William Blair Alexander Leach - Berenberg Capital Markets Tobey Sommer - Truist Securities Operator Good day and welcome to the Exponent, Inc. First Quarter of Fiscal Year 2022 Financial R ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☒ Annual Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the fiscal year ended December 31, 2021. OR ☐ Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from ________ to _________. Commission File Number 0-18655 | --- | --- | --- | --- | --- | |-------------------------------------------------------------------------------------- ...

Exponent, Inc. (NASDAQ:EXPO) Q4 2021 Earnings Conference Call February 3, 2022 4:30 PM ET Company Participants Joni Konstantelos - Investor Relations Catherine Corrigan - President and Chief Executive Officer Rich Schlenker - Executive Vice President and Chief Financial Officer. Conference Call Participants Andrew Nicholas - William Blair Tobey Sommer - Truist Securities Operator Good day, and welcome to the Exponent Inc's Fourth Quarter and Fiscal Year 2021 Financial Results Conference Call. Today's confer ...