EXPO could be on the verge of a breakout after moving 20.2% higher over the last four weeks. Plus, the company is currently a #1 (Strong Buy) on the Zacks Rank. Exponent, Inc. (EXPO) reached a significant support level, and could be a good pick for investors from a technical perspective. Recently, EXPO's 50-day simple moving average broke out above its 200-day moving average; this is known as a "golden cross." Considered an important signifier for a bullish breakout, a golden cross is a technical chart patt ...

PART I – FINANCIAL INFORMATION [Item 1. Financial Statements (unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) This section presents the unaudited condensed consolidated financial statements for Exponent, Inc., including the balance sheets, statements of income, comprehensive income, stockholders' equity, and cash flows, along with detailed notes explaining accounting policies, revenue recognition, fair value measurements, stock-based compensation, deferred compensation, segment reporting, and leases [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Condensed Consolidated Balance Sheet Highlights (in thousands) | Metric | March 29, 2024 | December 29, 2023 | | :-------------------------------- | :------------- | :---------------- | | Cash and cash equivalents | $168,665 | $187,150 | | Accounts receivable, net | $162,885 | $167,360 | | Total current assets | $352,323 | $379,532 | | Total assets | $629,405 | $646,777 | | Total current liabilities | $114,131 | $161,909 | | Total liabilities | $255,094 | $290,692 | | Total stockholders' equity | $374,311 | $356,085 | - Total assets decreased by **$17.37 million**, and total liabilities decreased by **$35.60 million**, while total stockholders' equity increased by **$18.23 million** from December 29, 2023, to March 29, 2024[7](index=7&type=chunk) [Condensed Consolidated Statements of Income](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) Condensed Consolidated Statements of Income Highlights (Three Months Ended, in thousands, except per share data) | Metric | March 29, 2024 | March 31, 2023 | YoY Change (%) | | :-------------------------------- | :------------- | :------------- | :------------- | | Revenues before reimbursements | $137,207 | $128,705 | 6.6% | | Revenues | $144,933 | $140,309 | 3.3% | | Operating income | $30,713 | $29,120 | 5.5% | | Net income | $30,142 | $29,124 | 3.5% | | Basic EPS | $0.59 | $0.57 | 3.5% | | Diluted EPS | $0.59 | $0.56 | 5.4% | | Cash dividends declared per common share | $0.28 | $0.26 | 7.7% | - Revenues increased by **3.3%** year-over-year, driven by a **6.6%** increase in revenues before reimbursements. Net income and diluted EPS also saw positive growth[10](index=10&type=chunk) [Condensed Consolidated Statements of Comprehensive Income](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) Condensed Consolidated Statements of Comprehensive Income (Three Months Ended, in thousands) | Metric | March 29, 2024 | March 31, 2023 | | :------------------------------------------ | :------------- | :------------- | | Net income | $30,142 | $29,124 | | Foreign currency translation adjustments, net of tax | $(210) | $460 | | Comprehensive income | $29,932 | $29,584 | - Comprehensive income increased slightly to **$29.9 million** in Q1 2024, despite a negative foreign currency translation adjustment, compared to **$29.6 million** in Q1 2023[14](index=14&type=chunk) [Condensed Consolidated Statements of Stockholders' Equity](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) Condensed Consolidated Statements of Stockholders' Equity Highlights (Three Months Ended March 29, 2024, in thousands) | Metric | Balance at December 29, 2023 | Balance at March 29, 2024 | | :-------------------------------- | :--------------------------- | :------------------------ | | Common Stock (Shares) | 65,707 | 65,707 | | Common Stock (Amount) | $66 | $66 | | Additional paid-in capital | $321,448 | $335,014 | | Accumulated other comprehensive loss | $(2,977) | $(3,187) | | Retained earnings | $574,082 | $588,570 | | Treasury Stock (Shares) | 15,134 | 15,033 | | Treasury Stock (Amount) | $(536,534) | $(546,152) | | Total Stockholders' Equity | $356,085 | $374,311 | - Key changes in stockholders' equity include an increase in additional paid-in capital by **$13.57 million** and retained earnings by **$14.49 million**, while treasury stock increased by **$9.62 million** due to repurchases[18](index=18&type=chunk) - Significant activities impacting equity included employee stock purchase plan (**$450k**), amortization of stock-based compensation (**$4,026k**), purchase of treasury shares (**$(5,466)k**), grant of restricted stock units (**$10,846k**), settlement of restricted stock units (**$(6,796)k**), and dividends (**$(14,934)k**)[18](index=18&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Condensed Consolidated Statements of Cash Flows Highlights (Three Months Ended, in thousands) | Cash Flow Activity | March 29, 2024 | March 31, 2023 | | :-------------------------------- | :------------- | :------------- | | Net cash provided by (used in) operating activities | $10,432 | $(6,703) | | Net cash used in investing activities | $(1,482) | $(5,668) | | Net cash used in financing activities | $(27,227) | $(23,740) | | Net decrease in cash and cash equivalents | $(18,485) | $(35,809) | | Cash and cash equivalents at end of period | $168,665 | $125,649 | - Net cash provided by operating activities significantly improved to **$10.4 million** in Q1 2024 from a net use of **$6.7 million** in Q1 2023. Net cash used in investing activities decreased, while net cash used in financing activities increased[21](index=21&type=chunk) [Notes to Unaudited Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) - The company operates on a 52-53 week fiscal year and prepares interim financial statements in accordance with GAAP and SEC regulations, requiring management estimates for revenue recognition and allowance for contract losses[23](index=23&type=chunk)[24](index=24&type=chunk)[26](index=26&type=chunk) Revenue Recognition by Contract Type (Three Months Ended) | Contract Type | March 29, 2024 | March 31, 2023 | | :-------------------------- | :------------- | :------------- | | Time and materials revenues | 80% | 80% | | Fixed price revenues | 20% | 20% | - Deferred revenues recognized in Q1 2024 were **$7,956,000**, down from **$8,566,000** in Q1 2023. Subcontractor fees not included in revenues decreased from **$5,751,000** in Q1 2023 to **$2,747,000** in Q1 2024[30](index=30&type=chunk)[31](index=31&type=chunk) Fair Value Measurements of Financial Assets and Liabilities (March 29, 2024, in thousands) | Asset/Liability | Total | Level 1 | | :------------------------------------------ | :---- | :------ | | Money market securities | $55,402 | $55,402 | | Fixed income trading securities (deferred comp) | $44,669 | $44,669 | | Equity trading securities (deferred comp) | $83,466 | $83,466 | | Deferred compensation plan liability | $129,139 | $129,139 | Shares Used in Per Share Computations (Three Months Ended, in thousands) | Metric | March 29, 2024 | March 31, 2023 | | :-------------------------------- | :------------- | :------------- | | Shares used in basic per share computation | 51,006 | 51,132 | | Shares used in diluted per share computation | 51,419 | 51,682 | - Stock-based compensation expense for Q1 2024 included **$3,314,000** for accrued bonus awards, **$3,707,000** for unvested restricted stock units, and **$319,000** for stock options[42](index=42&type=chunk)[43](index=43&type=chunk)[44](index=44&type=chunk) - Deferred compensation plan assets increased to **$128.1 million** (March 29, 2024) from **$115.2 million** (December 29, 2023), with a corresponding increase in liabilities. The company recognized **$6.27 million** in compensation expense due to changes in market value of trust assets in Q1 2024[49](index=49&type=chunk)[50](index=50&type=chunk) Accounts Receivable, Net (in thousands) | Metric | March 29, 2024 | December 29, 2023 | | :-------------------------------- | :------------- | :---------------- | | Billed accounts receivable | $106,582 | $128,052 | | Unbilled accounts receivable | $62,605 | $44,589 | | Allowance for contract losses and doubtful accounts | $(6,302) | $(5,281) | | Total accounts receivable, net | $162,885 | $167,360 | - The allowance for contract losses and doubtful accounts increased from **$5,281,000** at December 29, 2023, to **$6,302,000** at March 29, 2024, with a provision of **$1,279,000**[53](index=53&type=chunk) Segment Revenues (Three Months Ended, in thousands) | Segment | March 29, 2024 | March 31, 2023 | YoY Change (%) | | :-------------------------------- | :------------- | :------------- | :------------- | | Engineering and Other Scientific | $121,471 | $117,048 | 3.8% | | Environmental and Health | $23,462 | $23,261 | 0.9% | | Total revenues | $144,933 | $140,309 | 3.3% | Segment Operating Income (Three Months Ended, in thousands) | Segment | March 29, 2024 | March 31, 2023 | YoY Change (%) | | :-------------------------------- | :------------- | :------------- | :------------- | | Engineering and Other Scientific | $48,631 | $43,619 | 11.5% | | Environmental and Health | $8,236 | $7,554 | 9.0% | | Total segment operating income | $56,867 | $51,173 | 11.1% | | Corporate operating expense | $(26,154) | $(22,053) | 18.6% | | Total operating income | $30,713 | $29,120 | 5.5% | - The weighted average remaining lease term for operating leases is **5.9 years** (March 29, 2024) with a weighted average discount rate of **5.2%**. Total lease payments amount to **$32,522,000**[63](index=63&type=chunk) - On April 25, 2024, the Board of Directors declared a cash dividend of **$0.28 per share**, payable June 21, 2024[66](index=66&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=22&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial performance for Q1 2024, highlighting revenue growth driven by reactive work, increased utilization, and strategic investments. It also details changes in operating expenses, liquidity, and capital allocation strategies, including share repurchases and dividends. The company's Non-GAAP financial measures, EBITDA and EBITDAS, are also discussed [Executive Summary](index=22&type=section&id=Executive%20Summary) Q1 2024 Financial Highlights (in thousands, except per share data) | Metric | Q1 2024 | Q1 2023 | YoY Change (%) | | :----------------------------- | :------ | :------ | :------------- | | Revenues | $144,933 | $140,309 | 3% | | Revenues before reimbursements | $137,207 | $128,705 | 7% | | Net income | $30,142 | $29,124 | 3% | | Diluted EPS | $0.59 | $0.56 | 5.4% | - Growth in Q1 2024 was primarily driven by reactive work, including robust failure analysis and dispute-related services across various industries. Proactive business, excluding consumer electronics, increased due to strength in transportation and energy sectors[73](index=73&type=chunk)[74](index=74&type=chunk) - The decrease in excess tax benefit associated with stock-based awards to **$946,000** (Q1 2024) from **$3,627,000** (Q1 2023) was due to a smaller increase in common stock value between grant and release dates for restricted stock units[75](index=75&type=chunk) - The company remains focused on selectively adding top talent, expanding market position, capitalizing on emerging growth areas, managing operating expenses, generating cash, maintaining a strong balance sheet, and enhancing shareholder value through share repurchases and dividends[76](index=76&type=chunk) [Results of Consolidated Operations](index=23&type=section&id=Results%20of%20Consolidated%20Operations) Operational Metrics (Three Months Ended) | Metric | March 29, 2024 | March 31, 2023 | YoY Change | | :-------------------------------- | :------------- | :------------- | :--------- | | Billable hours (in thousands) | 392 | 385 | 2% | | Utilization | 75% | 70% | 5 pp | | Technical full-time equivalent employees | 1,003 | 1,052 | -5% | - The company expects a small sequential decline in average technical full-time equivalent employees during Q2 2024, followed by sequential headcount growth in the second half of 2024[77](index=77&type=chunk) Segment Revenue Performance (Three Months Ended, in thousands) | Segment | March 29, 2024 | March 31, 2023 | YoY Change (%) | | :-------------------------------- | :------------- | :------------- | :------------- | | Engineering and Other Scientific | $121,471 | $117,048 | 3.8% | | Environmental and Health | $23,462 | $23,261 | 0.9% | - The Engineering and Other Scientific segment's billable hours increased by **3%** to **315,000**, driven by strong demand from the energy, vehicle, and medical device industries. The Environmental and Health segment's billable hours decreased by **3%** to **77,000**, primarily driven by regulatory consulting in the chemical industry[78](index=78&type=chunk)[79](index=79&type=chunk) Operating Expenses (Three Months Ended, in thousands) | Expense Category | March 29, 2024 | March 31, 2023 | YoY Change (%) | | :----------------------------- | :------------- | :------------- | :------------- | | Compensation and related expenses | $90,327 | $84,181 | 7.3% | | Other operating expenses | $10,531 | $9,561 | 10.1% | | Reimbursable expenses | $7,726 | $11,604 | -33.4% | | General and administrative expenses | $5,636 | $5,843 | -3.5% | - Compensation and related expenses increased due to a **$2.3 million** change in deferred compensation plan assets, a **$1.9 million** increase in payroll, a **$0.9 million** increase in fringe benefits, and a **$1.1 million** increase in bonus expense. Other operating expenses increased due to higher occupancy and depreciation/amortization[81](index=81&type=chunk)[82](index=82&type=chunk) - Reimbursable expenses decreased due to fewer proactive projects in the consumer electronics sector. General and administrative expenses decreased primarily due to a **$212,000** reduction in recruiting expenses[84](index=84&type=chunk)[85](index=85&type=chunk) Operating Income by Segment (Three Months Ended, in thousands) | Segment | March 29, 2024 | March 31, 2023 | YoY Change (%) | | :-------------------------------- | :------------- | :------------- | :------------- | | Engineering and Other Scientific | $48,631 | $43,619 | 11.5% | | Environmental and Health | $8,236 | $7,554 | 9.0% | | Total operating income | $30,713 | $29,120 | 5.5% | - Corporate operating expenses increased by **18.6%** to **$26.15 million**, primarily due to an increase in deferred compensation expense and higher costs associated with human resources, finance, information technology, and business development groups[89](index=89&type=chunk) [Other Income, Net](index=28&type=section&id=Other%20Income%2C%20Net) Other Income, Net (Three Months Ended, in thousands) | Metric | March 29, 2024 | March 31, 2023 | YoY Change (%) | | :--------------------- | :------------- | :------------- | :------------- | | Other income, net | $9,710 | $6,418 | 51.3% | - The increase in other income, net, was primarily due to a **$2.35 million** change in the value of assets associated with the deferred compensation plan and an **$856,000** increase in interest income due to higher interest rates[91](index=91&type=chunk) [Income Taxes](index=28&type=section&id=Income%20Taxes) Income Taxes (Three Months Ended, in thousands) | Metric | March 29, 2024 | March 31, 2023 | YoY Change (%) | | :--------------------- | :------------- | :------------- | :------------- | | Income taxes | $10,281 | $6,414 | 60.3% | | Effective tax rate | 25.4% | 18.0% | 7.4 pp | - The excess tax benefit associated with stock-based awards decreased to **$946,000** in Q1 2024 from **$3,627,000** in Q1 2023, due to a smaller increase in common stock value between grant and release dates. Excluding this benefit, the effective tax rate would have been **27.8%** in Q1 2024 compared to **28.3%** in Q1 2023[92](index=92&type=chunk) [Liquidity and Capital Resources](index=28&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) - The company believes its existing balances of cash, cash equivalents, short-term investments, and cash generated from operations will be sufficient to satisfy its working capital needs, capital expenditures, outstanding commitments, stock repurchases, and dividends over at least the next twelve months[93](index=93&type=chunk) Cash Flow Summary (Three Months Ended, in thousands) | Cash Flow Activity | March 29, 2024 | March 31, 2023 | | :-------------------------------- | :------------- | :------------- | | Net cash provided by (used in) operating activities | $10,432 | $(6,703) | | Net cash used in investing activities | $(1,482) | $(5,668) | | Net cash used in financing activities | $(27,227) | $(23,740) | - Cash and cash equivalents decreased from **$187.15 million** at December 29, 2023, to **$168.67 million** at March 29, 2024[94](index=94&type=chunk) - The increase in net cash used in financing activities was due to an increase in common stock repurchases and dividends, partially offset by a decrease in payroll taxes for restricted stock units[97](index=97&type=chunk) - The company expects to finalize a 15-year extension of its Arizona land lease during Q2 2024, which will increase annual rent payments from **$1 million** to **$6.2 million** starting in 2028[98](index=98&type=chunk) - As of March 29, 2024, vested amounts due under the deferred compensation plan totaled **$129.14 million** (**$13.13 million** current, **$116.01 million** long-term), with corresponding invested assets of **$128.14 million** (**$14.29 million** current, **$113.84 million** long-term)[99](index=99&type=chunk) [Non-GAAP Financial Measures](index=29&type=section&id=Non-GAAP%20Financial%20Measures) - The company uses Non-GAAP financial measures, EBITDA (net income before income taxes, net interest income, depreciation, and amortization) and EBITDAS (EBITDA before stock-based compensation), to evaluate operating performance, develop budgets, and determine employee compensation[101](index=101&type=chunk) EBITDA as a % of Revenues Before Reimbursements (Three Months Ended, in thousands) | Metric | March 29, 2024 | March 31, 2023 | | :----------------------------- | :------------- | :------------- | | Revenues before reimbursements | $137,207 | $128,705 | | EBITDA | $40,121 | $35,756 | | EBITDA as a % of revenues before reimbursements | 29.2% | 27.8% | - The increase in EBITDA as a percentage of revenues before reimbursements was primarily due to an increase in utilization (**75%** in Q1 2024 vs. **70%** in Q1 2023) and a decrease in general and administrative expenses[103](index=103&type=chunk) Reconciliation of Net Income to EBITDA and EBITDAS (Three Months Ended, in thousands) | Metric | March 29, 2024 | March 31, 2023 | | :----------------------------- | :------------- | :------------- | | Net income | $30,142 | $29,124 | | Income taxes | $10,281 | $6,414 | | Interest income, net | $(2,626) | $(1,770) | | Depreciation and amortization | $2,324 | $1,988 | | EBITDA | $40,121 | $35,756 | | Stock-based compensation | $7,340 | $7,063 | | EBITDAS | $47,461 | $42,819 | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=31&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is exposed to interest rate risk, which is managed by investing in high-credit quality debt instruments with short average effective maturities. It also faces foreign currency risk due to revenues and expenses denominated in various foreign currencies, primarily the British Pound, Euro, Chinese Yuan, and Hong Kong Dollar. The company does not use derivative financial instruments for hedging, and while past impacts have been insignificant, continued international growth increases exposure to exchange rate fluctuations - Interest rate risk is managed by maintaining an investment portfolio primarily consisting of debt instruments with high credit quality and relatively short average effective maturities (maximum **3 years** for any issue, maximum **12 months** for portfolio average). No derivative financial instruments are used[105](index=105&type=chunk) - Foreign currency risk is related to revenues and expenses denominated in currencies other than the U.S. dollar, primarily the British Pound, Euro, Chinese Yuan, and Hong Kong Dollar[106](index=106&type=chunk) - As of March 29, 2024, net assets with foreign functional currencies included approximately **$16.6 million** (British Pound), **$4.3 million** (Hong Kong Dollar), **$2.9 million** (Singapore Dollar), and **$1.5 million** (Chinese Yuan)[107](index=107&type=chunk) - The company does not use foreign exchange contracts to hedge foreign currency exposures, and while past impacts have not been significant, continued international growth increases exposure to exchange rate fluctuations[109](index=109&type=chunk) [Item 4. Controls and Procedures](index=31&type=section&id=Item%204.%20Controls%20and%20Procedures) As of March 29, 2024, the company's management, including the Chief Executive Officer and Chief Financial Officer, concluded that the disclosure controls and procedures were effective. There were no material changes in the company's internal control over financial reporting during the three-month period ended March 29, 2024 - The company's disclosure controls and procedures were effective as of March 29, 2024, based on an evaluation performed under the supervision and with the participation of management, including the CEO and CFO[110](index=110&type=chunk) - There were no changes in internal control over financial reporting during the three-month period ended March 29, 2024, that have materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[111](index=111&type=chunk) PART II – OTHER INFORMATION [Item 1. Legal Proceedings](index=32&type=section&id=Item%201.%20Legal%20Proceedings) Exponent, Inc. is not currently engaged in any material legal proceedings - Exponent is not engaged in any material legal proceedings[112](index=112&type=chunk) [Item 1A. Risk Factors](index=32&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously discussed in the company's 2023 Annual Report on Form 10-K - There have been no material changes from risk factors as previously discussed under the heading "Risk Factors" in the Company's 2023 Annual Report[113](index=113&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=32&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During the three months ended March 29, 2024, the company repurchased 71,000 shares of its common stock at an average price of $77.13 per share. As of March 29, 2024, approximately $94.5 million remained authorized for repurchases under the company's programs, which have no expiration dates Common Stock Repurchases (Three Months Ended March 29, 2024, in thousands, except price per share) | Period | Total Number of Shares Purchased | Average Price Paid Per Share | Approximate Dollar Value of Shares That May Yet Be Purchased Under the Programs | | :------------------------ | :----------------------------- | :--------------------------- | :---------------------------------------------------------------------------- | | December 30 to January 26 | - | $- | $38,390 | | January 27 to February 23 | 10 | $73.62 | $99,290 | | February 24 to March 29 | 61 | $77.69 | $94,534 | | Total | 71 | $77.13 | $94,534 | - On February 1, 2024, the Board of Directors authorized an additional **$61,610,000** for common stock repurchases, supplementing the existing **$150,000,000** program, both without expiration dates[114](index=114&type=chunk) [Item 3. Defaults Upon Senior Securities](index=32&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This item is not applicable to Exponent, Inc - Not applicable[115](index=115&type=chunk) [Item 4. Mine Safety Disclosures](index=32&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to Exponent, Inc - Not applicable[116](index=116&type=chunk) [Item 5. Other Information](index=32&type=section&id=Item%205.%20Other%20Information) Director Paul Johnston adopted a Rule 10b5-1 trading plan on February 22, 2024, to sell 48,000 securities by September 27, 2024. No other pre-existing trading plans were modified or terminated by the company's directors and officers during the quarter Rule 10b5-1 Trading Plans Adopted (Three Months Ended March 29, 2024) | Name and Title | Adoption Date | Expiration Date | Aggregate Number of Securities to be Sold | | :------------------- | :-------------- | :---------------- | :---------------------------------------- | | Paul Johnston, Director | February 22, 2024 | September 27, 2024 | 48,000 | - No pre-existing trading plans intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) were modified or terminated by the Company's directors and officers during the three months ended March 29, 2024[118](index=118&type=chunk) [Item 6. Exhibits](index=34&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including certifications from the Chief Executive Officer and Chief Financial Officer, as well as various Inline XBRL documents - Exhibits include certifications from the Chief Executive Officer (31.1, 32.1) and Chief Financial Officer (31.2, 32.2), along with Inline XBRL Instance Document (101.INS) and related taxonomy extension documents (101.SCH, 101.CAL, 101.DEF, 101.LAB, 101.PRE)[120](index=120&type=chunk) [Signatures](index=35&type=section&id=Signatures) The report is duly signed on behalf of Exponent, Inc. by Catherine Ford Corrigan, Ph.D., Chief Executive Officer, and Richard L. Schlenker, Chief Financial Officer, on May 3, 2024 - The report was signed by Catherine Ford Corrigan, Ph.D., Chief Executive Officer, and Richard L. Schlenker, Chief Financial Officer, on May 3, 2024[123](index=123&type=chunk)

Exponent (EXPO) could be a solid choice for investors given the company's remarkably improving earnings outlook. While the stock has been a strong performer lately, this trend might continue since analysts are still raising their earnings estimates for the company.The upward trend in estimate revisions for this engineering and scientific consulting company reflects growing optimism of analysts on its earnings prospects, which should get reflected in its stock price. After all, empirical research shows a str ...

Exponent (EXPO) came out with quarterly earnings of $0.59 per share, beating the Zacks Consensus Estimate of $0.46 per share. This compares to earnings of $0.56 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 28.26%. A quarter ago, it was expected that this engineering and scientific consulting company would post earnings of $0.45 per share when it actually produced earnings of $0.41, delivering a surprise of -8.89%.Over the l ...

EXHIBIT 99.1 Exponent Reports First Quarter 2024 Financial Results MENLO PARK, Calif., April 25, 2024 (GLOBE NEWSWIRE) -- Exponent, Inc. (Nasdaq: EXPO) today reported financial results for the first quarter of fiscal year 2024 ended March 29, 2024. "Exponent delivered better than expected results in the first quarter, as we grew revenues before reimbursements 7% and expanded earnings per share year over year. This is a testament to our highly diversified portfolio and the merits of our premium service offer ...

MENLO PARK, Calif., April 25, 2024 (GLOBE NEWSWIRE) -- Exponent, Inc. (NASDAQ:EXPO) today announced that its Board of Directors has declared a quarterly cash dividend of $0.28 per share of common stock to be paid on June 21, 2024 to all common stockholders of record as of June 7, 2024. Exponent has paid, and expects to continue to pay, quarterly dividends each year in March, June, September, and December. Future declarations of quarterly dividends and the establishment of future record and payment dates are ...

MENLO PARK, Calif., April 09, 2024 (GLOBE NEWSWIRE) -- Exponent, Inc. (Nasdaq: EXPO), today announced that it will report First Quarter of fiscal year 2024 financial results for the period ended March 29, 2024 following the close of the market on Thursday, April 25, 2024. On that day, Dr. Catherine Corrigan, Chief Executive Officer and President, and Richard Schlenker, Executive Vice President and Chief Financial Officer, will host a conference call and webcast at 4:30 p.m. ET (1:30 p.m. PT) to discuss the ...

MENLO PARK, Calif., April 09, 2024 (GLOBE NEWSWIRE) -- Exponent, Inc. (Nasdaq: EXPO), today announced that it will report First Quarter of fiscal year 2024 financial results for the period ended March 29, 2024 following the close of the market on Thursday, April 25, 2024. On that day, Dr. Catherine Corrigan, Chief Executive Officer and President, and Richard Schlenker, Executive Vice President and Chief Financial Officer, will host a conference call and webcast at 4:30 p.m. ET (1:30 p.m. PT) to discuss the ...

Part I [Business](index=5&type=section&id=Item%201.%20Business) Exponent, Inc. is a science and engineering consulting firm providing solutions to complex problems across various industries through two segments: Engineering and Other Scientific, and Environmental and Health - Exponent is a science and engineering consulting firm with over 50 years of experience, organized into two reportable operating segments: (i) Engineering and Other Scientific and (ii) Environmental and Health[8](index=8&type=chunk)[12](index=12&type=chunk) - Services are provided on either a fixed-price or time and material basis, with professional rates ranging from **$200 to $985 per hour**[11](index=11&type=chunk) - In 2023, the number of technical full-time equivalent employees increased by **10% to 1,048**[78](index=78&type=chunk) Revenue by Client Industry (2023) | Industry | Percentage of Revenue | | :--- | :--- | | Consumer Products | ~22% | | Energy and Utilities | ~18% | | Transportation | ~17% | | Chemical | ~11% | Employee Statistics (as of Dec 29, 2023) | Category | Number | | :--- | :--- | | Total Employees | 1,320 | | Engineering & Scientific Staff | 1,047 | | Employees with Advanced Degrees | 955 | | Employees with Doctorate Degrees | 746 | [Services](index=5&type=section&id=SERVICES) The company's services are divided into two main segments, encompassing 12 practices in Engineering and Other Scientific, and 4 practices in Environmental and Health Sciences - The Engineering and Other Scientific segment includes practices like Biomechanics, Buildings & Structures, Data Sciences, Electrical Engineering & Computer Science, Materials & Corrosion Engineering, Thermal Sciences, and Vehicle Engineering[13](index=13&type=chunk) - The Environmental and Health segment includes practices such as Chemical Regulation & Food Safety, Ecological & Biological Sciences, Environmental & Earth Sciences, and Health Sciences[14](index=14&type=chunk) [Competition](index=12&type=section&id=COMPETITION) Exponent operates in a fragmented and competitive marketplace with low barriers to entry, where technical capability and professional reputation are key competitive factors - The market for Exponent's services is fragmented and highly competitive, with low barriers to entry[67](index=67&type=chunk)[69](index=69&type=chunk) - Principal competitive factors are technical capability, breadth of services, timely delivery, professional reputation, and knowledge of litigation and regulatory processes[68](index=68&type=chunk) [Human Capital](index=13&type=section&id=HUMAN%20CAPITAL) The company's success relies on attracting and retaining exceptional scientific and engineering talent, with a significant portion of staff holding advanced degrees - Attracting, developing, and rewarding exceptional people is central to the company's mission and success[71](index=71&type=chunk) - The company's Diversity, Equity, and Inclusion (DE&I) strategy is built on four pillars: communication, development, outreach, and recruiting[74](index=74&type=chunk) Employee Composition (as of Dec 29, 2023) | Category | Count | | :--- | :--- | | Total Employees | 1,320 | | Engineering and Scientific Staff | 1,047 | | Employees with Doctorate Degrees | 746 | | U.S. Employees | ~89% | | International Employees | ~11% | [Executive Officers](index=14&type=section&id=EXECUTIVE%20OFFICERS%20OF%20THE%20REGISTRANT) This section lists the executive officers of Exponent, Inc. as of February 23, 2024, including their names, ages, and positions Key Executive Officers (as of Feb 23, 2024) | Name | Age | Position | | :--- | :--- | :--- | | Catherine Ford Corrigan, Ph.D. | 55 | President and Chief Executive Officer | | Richard L. Schlenker, Jr. | 58 | Executive Vice President, Chief Financial Officer and Corporate Secretary | | Sally B. Shepard | 63 | Chief Human Resources Officer | [Risk Factors](index=17&type=section&id=Item%201A.%20Risk%20Factors) The company identifies several risk factors categorized into three main areas: client and demand, operational, and general risks - **Client & Demand Risks:** The business is unpredictable and reactive, with a small backlog, making performance uneven. A significant portion of revenue comes from clients in the chemical, construction, consumer products, energy, life sciences, and transportation industries, and the loss of a large client could be detrimental[92](index=92&type=chunk)[95](index=95&type=chunk) - **Operational Risks:** Success depends on attracting and retaining highly qualified technical and managerial personnel. The company is also subject to risks from professional liability, litigation, and security breaches that could disrupt operations or lead to unauthorized disclosure of confidential information[103](index=103&type=chunk)[105](index=105&type=chunk)[107](index=107&type=chunk) - **General Risks:** The market is highly competitive with low barriers to entry, which could pressure pricing. The company is also exposed to risks from economic and political uncertainty, potential impairment of goodwill and long-lived assets, and volatility in its common stock price[115](index=115&type=chunk)[119](index=119&type=chunk)[122](index=122&type=chunk) [Unresolved Staff Comments](index=25&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports that there are no unresolved staff comments from the SEC - None[132](index=132&type=chunk) [Cybersecurity](index=26&type=section&id=Item%201C.%20Cybersecurity) Exponent has implemented a comprehensive cybersecurity and data privacy program aligned with ISO 27001:2013 and 27701:2019 standards, with governance provided by the Board of Directors and a dedicated management committee - The company has developed cybersecurity and data privacy programs in accordance with ISO standards 27001:2013 and 27701:2019[134](index=134&type=chunk) - The cybersecurity incident response plan is based on the NIST 800-61r2 "Computer Security Incident Handling Guide"[135](index=135&type=chunk) - Oversight is provided by the Board of Directors, with a Security and Privacy Management Committee (SPMC) tasked with ensuring risks are adequately addressed[138](index=138&type=chunk) [Properties](index=27&type=section&id=Item%202.%20Properties) Exponent owns key properties in California and Massachusetts, and leases a 147-acre Test and Engineering Center in Arizona, along with 21 other leased locations globally - The company owns its Silicon Valley office, laboratory, and warehouse facilities in Menlo Park, California[141](index=141&type=chunk) - The company leases a 147-acre Test and Engineering Center in Phoenix, Arizona, under a 30-year lease agreement expiring in January 2028[142](index=142&type=chunk) - The company owns its office and laboratory facilities in Natick, Massachusetts[143](index=143&type=chunk) - Exponent leases additional office and laboratory space in 21 other locations across 13 states, the District of Columbia, and internationally in China, Hong Kong, Singapore, Switzerland, and the United Kingdom[144](index=144&type=chunk) [Legal Proceedings](index=27&type=section&id=Item%203.%20Legal%20Proceedings) The company states that it is not engaged in any material legal proceedings - Exponent is not engaged in any material legal proceedings[145](index=145&type=chunk) [Mine Safety Disclosures](index=27&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[146](index=146&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities](index=28&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity%2C%20Related%20Stockholder%20Matters%2C%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Exponent's common stock trades on the NASDAQ Global Select Market under "EXPO," with the company repurchasing 98,000 shares for approximately **$7.2 million** in Q4 2023 and authorizing an additional **$61.6 million** for its repurchase program in February 2024 - The company's common stock is traded on the NASDAQ Global Select Market under the symbol "EXPO"[148](index=148&type=chunk) - As of the end of Q4 2023, approximately **$38.4 million** remained available for share repurchases. On February 1, 2024, the Board authorized an additional **$61.6 million** for the program[149](index=149&type=chunk) Share Repurchases (Q4 2023) | Period | Total Shares Purchased (thousands) | Average Price Paid Per Share | | :--- | :--- | :--- | | Sep 30 - Oct 27 | 44 | $73.51 | | Oct 28 - Nov 24 | 54 | $73.73 | | Nov 25 - Dec 29 | - | - | | **Total** | **98** | **$73.63** | [(Reserved)](index=29&type=section&id=Item%206.%20%28Reserved%29) This item is reserved [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=30&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) In fiscal year 2023, Exponent's revenues increased by **4.6% to $536.8 million**, driven by higher billable hours and rates, while net income decreased by **1.9% to $100.3 million** due to increased compensation expenses and a smaller excess tax benefit - Revenues for 2023 increased **5%** (**7%** before reimbursements) compared to 2022, driven by higher billable hours and billing rates. Growth was strong in the reactive business, particularly in the transportation and energy sectors[161](index=161&type=chunk) - Net income decreased to **$100.3 million** (**$1.94 per diluted share**) in 2023 from **$102.3 million** (**$1.96 per diluted share**) in 2022. The decrease was partly due to a smaller excess tax benefit from stock-based awards (**$3.6 million** in 2023 vs. **$5.8 million** in 2022)[163](index=163&type=chunk) Consolidated Statements of Income Highlights (% of Revenues) | | 2023 | 2022 | | :--- | :--- | :--- | | Revenues | 100.0% | 100.0% | | Compensation and related expenses | 59.6% | 51.5% | | Operating income | 20.7% | 27.4% | | Net income | 18.7% | 19.9% | Key Operational Metrics (2023 vs 2022) | Metric | 2023 | 2022 | Change | | :--- | :--- | :--- | :--- | | Billable Hours (thousands) | 1,495 | 1,465 | +2% | | Utilization | 69% | 74% | -5 p.p. | | Technical FTEs | 1,047 | 955 | +10% | [Results of Operations](index=32&type=section&id=Results%20of%20Operations) For fiscal year 2023, total revenues grew **4.6% to $536.8 million**, but operating income decreased **21.0% to $111.3 million**, primarily due to a **21.1%** increase in compensation expenses driven by deferred compensation plan asset value changes - Compensation and related expenses increased by **21.1%** in 2023, primarily due to a **$28.5 million** increase in deferred compensation expense resulting from changes in the value of associated plan assets[171](index=171&type=chunk)[172](index=172&type=chunk) - The effective tax rate increased to **26.2%** in 2023 from **22.6%** in 2022, mainly due to a smaller excess tax benefit from stock-based awards[184](index=184&type=chunk) Revenues by Segment (in thousands) | Segment | 2023 | 2022 | % Change | | :--- | :--- | :--- | :--- | | Engineering and Other Scientific | $446,888 | $427,796 | 4.5% | | Environmental and Health | $89,878 | $85,497 | 5.1% | | **Total revenues** | **$536,766** | **$513,293** | **4.6%** | Operating Income by Segment (in thousands) | Segment | 2023 | 2022 | % Change | | :--- | :--- | :--- | :--- | | Engineering and Other Scientific | $153,918 | $152,679 | 0.8% | | Environmental and Health | $28,432 | $27,340 | 4.0% | | Corporate operating expense | ($71,028) | ($39,177) | 81.3% | | **Total operating income** | **$111,322** | **$140,842** | **(21.0)%** | [Liquidity and Capital Resources](index=36&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) The company maintained strong liquidity, with cash and cash equivalents increasing to **$187.2 million** at the end of 2023, and net cash from operating activities at **$127.4 million**, while cash used in financing activities decreased significantly due to reduced share repurchases - Cash and cash equivalents increased to **$187.2 million** as of December 29, 2023, compared to **$161.5 million** at the end of 2022[185](index=185&type=chunk) - The decrease in cash used for financing activities was mainly due to lower common stock repurchases in 2023 compared to 2022[188](index=188&type=chunk) Summary of Cash Flows (in thousands) | Activity | 2023 | 2022 | | :--- | :--- | :--- | | Net cash provided by Operating activities | $127,352 | $93,807 | | Net cash used in Investing activities | ($16,356) | ($12,043) | | Net cash used in Financing activities | ($86,009) | ($215,977) | [Non-GAAP Financial Measures](index=38&type=section&id=Non-GAAP%20Financial%20Measures) The company uses non-GAAP measures EBITDA and EBITDAS to evaluate operating performance, with EBITDA for 2023 at **$137.7 million**, nearly flat compared to 2022, and EBITDAS at **$158.0 million** - EBITDA as a percentage of revenues before reimbursements decreased to **27.7%** in 2023 from **29.6%** in 2022, attributed to lower utilization (**69%** vs. **74%**) and increased operating expenses[194](index=194&type=chunk) EBITDA and EBITDAS Reconciliation (in thousands) | | 2023 | 2022 | | :--- | :--- | :--- | | Net income | $100,339 | $102,330 | | Add back: Income taxes | 35,557 | 29,904 | | Subtract: Interest income | (7,150) | (2,096) | | Add back: Depreciation and amortization | 8,916 | 7,079 | | **EBITDA** | **$137,662** | **$137,217** | | Add back: Stock-based compensation | 20,357 | 20,364 | | **EBITDAS** | **$158,019** | **$157,581** | [Quantitative and Qualitative Disclosures about Market Risk](index=39&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) Exponent manages interest rate risk through conservative investment policies and faces foreign currency risk from international operations, primarily in British Pounds, Chinese Yuan, and Hong Kong Dollars, without using derivative instruments for hedging - The company is exposed to interest rate risk on its cash and cash equivalents, managed by investing in high-credit-quality debt instruments with short maturities[196](index=196&type=chunk) - Foreign currency risk exists for revenues and expenses denominated in currencies other than the U.S. dollar, mainly the British Pound, Chinese Yuan, and Hong Kong Dollar[198](index=198&type=chunk) - As of December 29, 2023, the company held net assets with functional currencies of approximately **$17.2 million** in British Pounds, **$2.7 million** in Hong Kong Dollars, and **$2.4 million** in Chinese Yuan[199](index=199&type=chunk) - The company does not use foreign exchange contracts to hedge currency exposures, and to date, the impact of exchange rate changes has not been material[201](index=201&type=chunk) [Financial Statements and Supplementary Data](index=40&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the company's consolidated financial statements for the past three fiscal years, along with KPMG LLP's unqualified audit opinion and identification of "Collectibility of accounts receivable" as a critical audit matter - The independent auditor, KPMG LLP, issued an unqualified opinion, stating the financial statements are presented fairly and the company maintained effective internal control over financial reporting as of December 29, 2023[222](index=222&type=chunk) - The audit identified the 'Collectibility of accounts receivable' as a Critical Audit Matter, as the estimate for the specific allowance involves subjective judgment regarding the likelihood of collection[231](index=231&type=chunk) Consolidated Income Statement (in thousands) | | 2023 | 2022 | 2021 | | :--- | :--- | :--- | :--- | | Revenues | $536,766 | $513,293 | $466,269 | | Operating income | $111,322 | $140,842 | $108,927 | | Net income | $100,339 | $102,330 | $101,202 | | Diluted EPS | $1.94 | $1.96 | $1.90 | Consolidated Balance Sheet (in thousands) | | Dec 29, 2023 | Dec 30, 2022 | | :--- | :--- | :--- | | Cash and cash equivalents | $187,150 | $161,458 | | Total Assets | $646,777 | $586,662 | | Total Liabilities | $290,692 | $265,910 | | Total Stockholders' Equity | $356,085 | $320,752 | [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=40&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants on accounting and financial disclosure - None[203](index=203&type=chunk) [Controls and Procedures](index=40&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures, as well as internal control over financial reporting, were effective as of December 29, 2023, with no material changes reported during the most recent fiscal quarter - Management, including the principal executive officer and principal financial officer, concluded that the company's disclosure controls and procedures were effective as of the end of the fiscal year[205](index=205&type=chunk) - Management concluded that the company's internal control over financial reporting was effective as of December 29, 2023, based on the framework in Internal Control - Integrated Framework (2013) issued by COSO[206](index=206&type=chunk) - There were no changes in internal control over financial reporting during the most recent fiscal quarter that materially affected, or are reasonably likely to materially affect, the company's internal controls[207](index=207&type=chunk) [Other Information](index=40&type=section&id=Item%209B.%20Other%20Information) The company reports that no directors or officers adopted, modified, or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement during the fourth fiscal quarter of 2023 - No directors or officers adopted, modified, or terminated a Rule 10b5-1 trading arrangement during the fourth fiscal quarter of 2023[208](index=208&type=chunk) [Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](index=40&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections) This item is not applicable to the company - Not applicable[209](index=209&type=chunk) Part III Part III of the Form 10-K incorporates information by reference from the company's definitive Proxy Statement for its 2024 Annual Meeting of Stockholders, covering directors, executive officers, corporate governance, executive compensation, security ownership, certain relationships and transactions, and principal accounting fees and services [Directors, Executive Officers and Corporate Governance](index=41&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information required by this item is incorporated by reference from the company's definitive Proxy Statement for its 2024 Annual Meeting of Stockholders - The information for this item is incorporated by reference from the company's definitive Proxy Statement[211](index=211&type=chunk) [Executive Compensation](index=41&type=section&id=Item%2011.%20Executive%20Compensation) Information required by this item is incorporated by reference from the company's definitive Proxy Statement - The information for this item is incorporated by reference from the company's definitive Proxy Statement[212](index=212&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=41&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information required by this item is incorporated by reference from the company's definitive Proxy Statement - The information for this item is incorporated by reference from the company's definitive Proxy Statement[213](index=213&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=41&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information required by this item is incorporated by reference from the company's definitive Proxy Statement - The information for this item is incorporated by reference from the company's definitive Proxy Statement[214](index=214&type=chunk) [Principal Accounting Fees and Services](index=41&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) Information required by this item is incorporated by reference from the company's definitive Proxy Statement - The information for this item is incorporated by reference from the company's definitive Proxy Statement[215](index=215&type=chunk) Part IV [Exhibits, Financial Statement Schedules](index=42&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section includes the consolidated financial statements of Exponent, Inc., the Report of Independent Registered Public Accounting Firm (KPMG LLP), financial statement schedules, and a comprehensive index of all exhibits filed with the report - This item contains the consolidated financial statements, the Report of Independent Registered Public Accounting Firm, and financial statement schedules[217](index=217&type=chunk) - An index of exhibits filed as part of the Annual Report on Form 10-K is provided, including governance documents, material contracts, and certifications[328](index=328&type=chunk)[329](index=329&type=chunk)

Earnings from consulting firm Exponent (EXPO -13.30%) came in below expectations, and the company continues to see challenges heading into 2024. Investors are moving to the sidelines, sending shares of Exponent down 15% as of 10:45 Eastern Friday.The growth engine is sputtering heading into 2024Exponent is an engineering and tech consulting firm, offering expertise in about 90 technical disciplines to companies around the world. But with so many of those customers looking to trim costs due to concerns about ...