Exponent, Inc. (Nasdaq:EXPO) today reported financial results for
the fourth quarter and fiscal year 2019 ended January 3, 2020.
“The fourth quarter was exceptional and concluded a strong 2019
for Exponent. For the quarter and year we achieved double digit
revenue growth and increased our EBITDA margin as compared to
2018,” commented Dr. Catherine Corrigan, President and Chief
Executive Officer. “We capitalized on increased demand for
proactive and reactive services related to energy storage and
battery technology; we continued our integrity management
assessments for the utilities industry; and we expanded our
portfolio of international arbitration engagements. We diversified
the scope of our human factors and product studies as we provided
unique insights into the operability, usability and safety of
human-machine systems.”
“Whether it’s the risk associated with the integrity of an
electrical transmission line, the reliability of an automated
vehicle, or the health and safety of the public, our
inter-disciplinary teams of subject matter experts leverage data
analytics to deliver valuable insight. We are well-positioned for
continued expansion based on our world-class team of engineers and
scientists, the scientific rigor underlying our conclusions and our
50 years of experience,” continued Dr. Corrigan.
Fourth Quarter Financial Results
For the 14-week fourth quarter of 2019, total revenues and
revenues before reimbursements grew 20% to $110.1 million and
$102.2 million, respectively, as compared to $92.1 million and
$85.3 million, respectively, in the 13-week fourth quarter of
2018.
Net income increased to $19.1 million, or $0.36 per diluted
share, in the fourth quarter of 2019, as compared to $16.0 million,
or $0.30 per diluted share, in the same period of 2018.
EBITDA1 increased to $27.7 million, as compared to $22.6 million
in the fourth quarter of 2018.
Fiscal Year 2019 Financial Results
For the 53-week fiscal year 2019, total revenues and revenues
before reimbursements increased 10% to $417.2 million and $391.4
million, respectively, as compared to $379.5 million and $354.6
million in the 52-week fiscal year 2018.
Net income was $82.5 million, or $1.53 per diluted share, as
compared to $72.3 million, or $1.33 per diluted share, in 2018. The
tax benefit for the classification of tax adjustments associated
with share-based awards realized for fiscal 2019 was $8.1 million
as compared to $4.2 million last year.
Inclusive of the tax benefit, Exponent’s consolidated tax rate
was 20.9% in 2019, as compared to 22.6% last year.
EBITDA1 increased to $107.1 million, as compared to $96.9
million the prior year.
For 2019 net cash generated from operating activities was $108
million. During the year, Exponent distributed $34 million in
dividends, repurchased $22 million of common stock and ended the
year with $232 million in cash, cash equivalents and short-term
investments.
In a separate press release today, Exponent announced an
increase in its quarterly cash dividend from $0.16 to $0.19 to be
distributed on March 27, 2020 and reiterated its intent to continue
to pay quarterly dividends.
Business Overview
Exponent’s engineering and other scientific segment represented
81% of the Company’s 14-week fourth quarter and 53-week 2019 net
revenues. Net revenues in this segment grew approximately 21% in
the fourth quarter and 11% in fiscal year 2019, as compared to
2018. This segment experienced broad-based strength during the year
with notable performances in its human factors, thermal sciences,
structural engineering, biomedical, materials sciences, polymer
sciences and construction consulting practices. An array of
multinational companies across industries sought our scientific
expertise and sound advice for their products. For example, safety
concerns regarding energy storage systems drove increased demand
for risk assessments in the consumer products, transportation,
utility and medical device industries. Our multidisciplinary
battery team also performed substantial analysis related to a
complex international trade secret dispute. Our scientists
addressed reliability concerns with an in-depth design review of a
new liquefied natural gas containment vessel. Our biomedical team
is advising a client as it navigates the evolving European
regulatory framework for medical devices.
Exponent’s environmental and health segment represented
approximately 19% of the Company’s 14-week fourth quarter and
53-week 2019 net revenues. Net revenues in this segment increased
14% in the fourth quarter and 6% in fiscal year 2019, as compared
to 2018. Within this segment, the chemical regulation and food
safety practice continued to grow as Exponent’s scientists
evaluated the effects of chemicals and new products on human health
and the environment.
Business Outlook
“Our 2019 results benefitted from an extra week and a large
engagement for an electric utility related to wildfires and
integrity management, which is expected to step down in 2020. We
are also in the process of divesting our German entity, with annual
revenues of approximately $4 million, as its structural design and
inspection services are not a strategic fit. The combination of
these factors will create a challenging year over year comparison
for 2020. As a result, we expect revenues before
reimbursements for the full year 2020 to grow in the mid-single
digits as compared to 2019. 2020 EBITDA1 margin is expected
to expand 25 to 50 basis points, as compared to 2019,” commented
Richard Schlenker, Executive Vice President and Chief Financial
Officer.
“Looking ahead, we will continue to leverage our core
competencies as we deepen our client relationships, expand our
reputation internationally and bring new talent to the firm. We are
prepared to deliver in-depth engineering and scientific insight
into complex and evolving systems such as automated and electric
vehicles, medical devices, consumer electronics and infrastructure.
Exponent is well-positioned to advise its clients as society
continues to raise the bar on safety, health, sustainability,
reliability and performance,” concluded Dr. Corrigan.
Today's Conference Call Information
Exponent will discuss its financial results in more detail on a
conference call today, Thursday, February 6, 2020, starting at 4:30
p.m. Eastern Time / 1:30 p.m. Pacific Time. The audio of the
conference call is available by dialing (800) 367-2403 or (334)
777-6978. A live webcast of the call will be available on the
Investor Relations section of the Company's website at
www.exponent.com/investors. For those unable to listen to the live
webcast, a replay of the call will also be available on the
Exponent website, or by dialing (888) 2031112 or (719) 457-0820
and entering passcode 4507569#.
Footnotes
1 EBITDA is a non-GAAP financial measure defined by the Company
as net income before income taxes, interest income, depreciation
and amortization. EBITDAS is a non-GAAP financial measure defined
by the Company as EBITDA before stock-based compensation. The
Company regards EBITDA and EBITDAS as useful measures of operating
performance and cash flow to complement operating income, net
income and other GAAP financial performance measures. Additionally,
management believes that EBITDA and EBITDAS provide meaningful
comparisons of past, present and future operating results.
Generally, a non-GAAP financial measure is a numerical measure of
a company's performance, financial position or cash flow that
either excludes or includes amounts that are not normally excluded
or included in the most directly comparable measure calculated and
presented in accordance with GAAP. These measures, however, should
be considered in addition to, and not as a substitute or superior
to, operating income, cash flows, or other measures of financial
performance prepared in accordance with GAAP. A
reconciliation of the measures to GAAP is set forth below.
About Exponent
Exponent is an engineering and scientific consulting firm
providing solutions to complex problems. Exponent's
interdisciplinary organization of scientists, physicians,
engineers, and business consultants draws from more than 90
technical disciplines to solve the most pressing and complicated
challenges facing stakeholders today. The firm leverages over 50
years of experience in analyzing accidents and failures to advise
clients as they innovate their technologically complex products and
processes, ensure the safety and health of their users, and address
the challenges of sustainability.
Exponent may be reached at (888) 656EXPO, info@exponent.com, or
www.exponent.com.
Forward Looking Statements
This news release contains, and incorporates by reference,
certain "forward-looking" statements (as such term is defined in
the Private Securities Litigation Reform Act of 1995, and the rules
promulgated pursuant to the Securities Act of 1933, as amended, and
the Securities Exchange Act of 1934, as amended) that are based on
the beliefs of the Company's management, as well as assumptions
made by and information currently available to the Company's
management. When used in this document and in the documents
incorporated herein by reference, the words “intend,” "anticipate,"
"believe," "estimate," "expect" and similar expressions, as they
relate to the Company or its management, identify such
forward-looking statements. Such statements reflect the current
views of the Company or its management with respect to future
events and are subject to certain risks, uncertainties and
assumptions. Should one or more of these risks or uncertainties
materialize, or should underlying assumptions prove incorrect, the
Company's actual results, performance, or achievements could differ
materially from those expressed in, or implied by, any such
forward-looking statements. Factors that could cause or contribute
to such material differences include the possibility that the
demand for our services may decline as a result of changes in
general and industry specific economic conditions, the timing of
engagements for our services, the effects of competitive services
and pricing, the absence of backlog related to our business, our
ability to attract and retain key employees, the effect of tort
reform and government regulation on our business, and liabilities
resulting from claims made against us. Additional risks and
uncertainties are discussed in our Annual Report on Form 10K under
the heading "Risk Factors" and elsewhere in the report. The
inclusion of such forward-looking information should not be
regarded as a representation by the Company or any other person
that the future events, plans, or expectations contemplated by the
Company will be achieved. The Company undertakes no obligation to
release publicly any updates or revisions to any such
forward-looking statements.
Source: Exponent, Inc.
EXPONENT,
INC. |
|
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME |
|
For the
Quarters Ended January 3, 2020 and December 28, 2018 |
|
(unaudited) |
|
(in
thousands, except per share data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarters Ended |
|
Years Ended |
|
|
|
|
|
|
|
|
January
3, |
|
December
28, |
|
January
3, |
|
December
28, |
|
|
|
|
|
|
|
|
|
2020 |
|
|
2018 |
|
|
|
2020 |
|
|
2018 |
|
|
|
|
|
|
|
|
|
(14 weeks) |
|
(13 weeks) |
|
(53 weeks) |
|
(52 weeks) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues before reimbursements |
|
$ |
102,220 |
|
$ |
85,269 |
|
|
$ |
391,390 |
|
$ |
354,639 |
|
|
|
Reimbursements |
|
|
|
|
7,894 |
|
|
6,874 |
|
|
|
25,809 |
|
|
24,884 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
|
|
|
|
110,114 |
|
|
92,143 |
|
|
|
417,199 |
|
|
379,523 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
Compensation and related expenses |
|
|
66,581 |
|
|
46,376 |
|
|
|
252,197 |
|
|
215,052 |
|
|
|
Other operating expenses |
|
|
|
9,114 |
|
|
7,742 |
|
|
|
33,562 |
|
|
30,599 |
|
|
|
Reimbursable expenses |
|
|
|
7,894 |
|
|
6,874 |
|
|
|
25,809 |
|
|
24,884 |
|
|
|
General and administrative expenses |
|
|
5,175 |
|
|
4,365 |
|
|
|
20,520 |
|
|
17,532 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses |
|
|
88,764 |
|
|
65,357 |
|
|
|
332,088 |
|
|
288,067 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income |
|
|
|
21,350 |
|
|
26,786 |
|
|
|
85,111 |
|
|
91,456 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense), net |
|
|
|
|
|
|
|
|
|
|
|
Interest income, net |
|
|
|
1,018 |
|
|
938 |
|
|
|
3,912 |
|
|
2,751 |
|
|
|
Miscellaneous income, net |
|
|
|
4,438 |
|
|
(5,765 |
) |
|
|
15,167 |
|
|
(890 |
) |
|
|
|
Total other income (expense), net |
|
|
5,456 |
|
|
(4,827 |
) |
|
|
19,079 |
|
|
1,861 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes |
|
|
26,806 |
|
|
21,959 |
|
|
|
104,190 |
|
|
93,317 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income taxes |
|
|
|
|
|
7,685 |
|
|
5,923 |
|
|
|
21,730 |
|
|
21,063 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
|
|
$ |
19,121 |
|
$ |
16,036 |
|
|
$ |
82,460 |
|
$ |
72,254 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per share: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
|
|
$ |
0.36 |
|
$ |
0.30 |
|
|
$ |
1.56 |
|
$ |
1.37 |
|
|
|
Diluted |
|
|
|
|
$ |
0.36 |
|
$ |
0.30 |
|
|
$ |
1.53 |
|
$ |
1.33 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in per share computations: |
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
|
|
|
52,681 |
|
|
52,839 |
|
|
|
52,691 |
|
|
52,906 |
|
|
|
Diluted |
|
|
|
|
|
53,817 |
|
|
54,119 |
|
|
|
53,884 |
|
|
54,168 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EXPONENT,
INC. |
|
CONDENSED
CONSOLIDATED BALANCE SHEETS |
|
January 3,
2020 and December 28, 2018 |
|
(unaudited) |
|
(in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
January
3, |
|
December
28, |
|
|
|
|
|
|
|
|
|
|
2020 |
|
|
|
2018 |
|
|
|
Assets |
|
|
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
|
$ |
176,436 |
|
|
$ |
127,059 |
|
|
|
|
Short-term investments |
|
|
|
55,165 |
|
|
|
81,495 |
|
|
|
|
Accounts receivable, net |
|
|
|
120,138 |
|
|
|
105,814 |
|
|
|
|
Prepaid expenses and other assets |
|
|
12,305 |
|
|
|
12,244 |
|
|
|
|
|
Total current assets |
|
|
|
364,044 |
|
|
|
326,612 |
|
|
|
Property, equipment and leasehold improvements, net |
|
|
61,587 |
|
|
|
46,103 |
|
|
|
Operating lease right-of-use asset |
|
|
23,003 |
|
|
|
- |
|
|
|
Goodwill |
|
|
|
|
|
8,607 |
|
|
|
8,607 |
|
|
|
Other assets |
|
|
|
|
|
106,170 |
|
|
|
87,614 |
|
|
|
|
|
Total Assets |
|
|
|
$ |
563,411 |
|
|
$ |
468,936 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders' Equity |
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
|
Accounts payable and accrued liabilities |
|
$ |
18,583 |
|
|
$ |
12,283 |
|
|
|
|
Accrued payroll and employee benefits |
|
|
86,723 |
|
|
|
76,855 |
|
|
|
|
Deferred revenues |
|
|
|
|
12,710 |
|
|
|
9,166 |
|
|
|
|
Operating lease liability |
|
|
|
5,944 |
|
|
|
- |
|
|
|
|
|
Total current liabilities |
|
|
123,960 |
|
|
|
98,304 |
|
|
|
Other liabilities |
|
|
|
|
|
71,042 |
|
|
|
55,256 |
|
|
|
Deferred rent |
|
|
|
|
|
- |
|
|
|
1,467 |
|
|
|
Operating lease liability |
|
|
|
18,158 |
|
|
|
- |
|
|
|
|
|
Total liabilities |
|
|
|
213,160 |
|
|
|
155,027 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' equity: |
|
|
|
|
|
|
|
|
|
Common stock |
|
|
|
|
66 |
|
|
|
66 |
|
|
|
|
Additional paid-in capital |
|
|
|
244,935 |
|
|
|
227,283 |
|
|
|
|
Accumulated other comprehensive loss |
|
|
(1,760 |
) |
|
|
(2,853 |
) |
|
|
|
Retained earnings |
|
|
|
|
384,668 |
|
|
|
342,024 |
|
|
|
|
Treasury stock, at cost |
|
|
|
(277,658 |
) |
|
|
(252,611 |
) |
|
|
|
|
Total stockholders' equity |
|
|
350,251 |
|
|
|
313,909 |
|
|
|
|
|
|
|
|
|
|
$ |
563,411 |
|
|
$ |
468,936 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EXPONENT,
INC. |
EBITDA and
EBITDAS (1) |
For the
Quarters Ended January 3, 2020 and December 28, 2018 |
(unaudited) |
(in
thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended |
|
Years Ended |
|
|
|
|
|
|
|
January
3, |
|
December
28, |
|
January
3, |
|
December
28, |
|
|
|
|
|
|
|
|
2020 |
|
|
|
2018 |
|
|
|
2020 |
|
|
|
2018 |
|
|
|
|
|
|
|
|
(14 weeks) |
|
(13 weeks) |
|
(53 weeks) |
|
(52 weeks) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income |
|
|
|
|
$ |
19,121 |
|
|
$ |
16,036 |
|
|
$ |
82,460 |
|
|
$ |
72,254 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Add back (subtract): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income taxes |
|
|
|
|
|
7,685 |
|
|
|
5,923 |
|
|
|
21,730 |
|
|
|
21,063 |
|
|
Interest income, net |
|
|
|
(1,018 |
) |
|
|
(938 |
) |
|
|
(3,912 |
) |
|
|
(2,751 |
) |
|
Depreciation and amortization |
|
|
1,902 |
|
|
|
1,582 |
|
|
|
6,806 |
|
|
|
6,292 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA (1) |
|
|
|
|
27,690 |
|
|
|
22,603 |
|
|
|
107,084 |
|
|
|
96,858 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation |
|
|
|
3,881 |
|
|
|
3,388 |
|
|
|
17,466 |
|
|
|
16,993 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDAS (1) |
|
|
$ |
31,571 |
|
|
$ |
25,991 |
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$ |
124,550 |
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$ |
113,851 |
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(1) EBITDA is a
non-GAAP financial measure defined by the Company as net income
before income taxes, interest income, depreciation and
amortization. EBITDAS is a non-GAAP financial measure defined by
the Company as EBITDA before stock-based compensation. The Company
regards EBITDA and EBITDAS as useful measures of operating
performance and cash flow to complement operating income, net
income and other GAAP financial performance measures. Additionally,
management believes that EBITDA and EBITDAS provide meaningful
comparisons of past, present and future operating results.
Generally, a non-GAAP financial measure is a numerical measure of a
company's performance, financial position or cash flow that either
excludes or includes amounts that are not normally excluded or
included in the most directly comparable measure calculated and
presented in accordance with GAAP. These measures, however, should
be considered in addition to, and not as a substitute or superior
to, operating income, cash flows, or other measures of financial
performance prepared in accordance with GAAP. |
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Exponent (NASDAQ:EXPO)
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From Mar 2024 to Apr 2024
Exponent (NASDAQ:EXPO)
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