Exponent(US:EXPO)2023-11-02 16:00Financial Performance - Revenues for Q3 2023 increased by 5% to $133,336,000 compared to $127,179,000 in Q3 2022[72] - Net income for Q3 2023 slightly increased to $24,538,000, with diluted earnings per share rising to $0.48 from $0.47 in the same period last year[75] - Total revenues for the first nine months of 2023 increased by 7.2% to $413,866,000 compared to $385,938,000 in the same period last year[92] - The company reported a net income of $79,410,000 for the nine months ended September 29, 2023, compared to $79,806,000 for the same period last year[117] Operating Expenses - Compensation and related expenses rose by 17.9% to $74,011,000, representing 55.5% of total revenues[81] - Other operating expenses increased by 24.7% to $10,997,000, accounting for 8.2% of total revenues[82] - Total operating income decreased by 21.8% to $92,928,000, primarily due to a 151.4% increase in corporate operating expenses to $50,686,000[100][102] - Compensation and related expenses surged by 26.9% to $241,028,000, representing 58.2% of total revenues[94] Revenue Segmentation - Revenues from the Engineering and Other Scientific segment increased by 3.2% to $110,857,000, while the Environmental and Health segment saw a 13.7% increase to $22,479,000[78] - Engineering and Other Scientific segment revenues rose by 7.3% to $344,552,000, driven by a 5% increase in billable hours to 916,000[92] - Environmental and Health segment revenues increased by 7.0% to $69,314,000, with billable hours rising by 1% to 238,000[93] Employee Metrics - Billable hours increased by 4% to 380,000 in Q3 2023, while utilization decreased to 70% from 73% in Q3 2022[77] - Technical full-time equivalent employees increased by 10% to 1,050, reflecting successful recruiting efforts[77] - The company experienced a 12% increase in technical full-time equivalent employees, contributing to increased operating expenses during the first nine months of 2023[116] Cash Flow and Assets - Net cash provided by operating activities was $56,043,000, up from $53,237,000 in the prior year[106] - Cash and cash equivalents decreased to $137,099,000 as of September 29, 2023, down from $161,458,000 at the end of 2022[106] - As of September 29, 2023, the company recorded long-term liabilities of $93,070,000 and current liabilities of $14,153,000 under its nonqualified deferred compensation plan[111][112] - As of September 29, 2023, the company had net assets of approximately $14.3 million in British Pounds and $2.8 million in Hong Kong Dollars, among other currencies[120] Strategic Focus - The company remains focused on expanding market position and managing operating expenses to enhance shareholder value[76] - The company plans to continue investing in capital expenditures and may use cash reserves for stock repurchases, dividends, or strategic acquisitions[110] Other Income - Other income, net, increased by 102.5% to $84,000, primarily due to changes in the value of assets associated with the deferred compensation plan[89] - Other income, net, improved significantly by 175.4% to $12,880,000, primarily due to changes in the value of assets associated with the deferred compensation plan[103] Taxation - Income taxes for the first nine months increased by 20.5% to $26,398,000, with an effective tax rate of 24.9%[104] EBITDA Metrics - For the three months ended September 29, 2023, revenues before reimbursements were $124,959,000, with EBITDA of $34,520,000, resulting in an EBITDA margin of 27.6%[115] - The EBITDA margin decreased from 30.0% in the same period last year, primarily due to a decrease in utilization to 70% from 73%[115] - For the first nine months of 2023, revenues were $383,317,000, with EBITDA of $107,122,000, leading to an EBITDA margin of 27.9%, down from 30.2% in the prior year[115] Foreign Exchange and Investments - The company does not use foreign exchange contracts to hedge foreign currency exposures, which may impact future results due to international growth[122] - The maximum effective maturity of any issue in the company's investment portfolio is 3 years, with an average effective maturity not exceeding 12 months[118]