Exponent Reports Second Quarter Fiscal 2014 Results

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| Source: Exponent, Inc.

MENLO PARK, Calif., July 22, 2014 (GLOBE NEWSWIRE) -- Exponent, Inc. (Nasdaq:EXPO) today reported financial results for the second quarter and six months ended July 4, 2014.

For the second quarter of 2014, revenues before reimbursements were $72,331,000 as compared to $71,919,000 in the same period of 2013. Total revenues were $76,574,000 as compared to $75,505,000 in the same period one year ago.

Net income for the second quarter increased to $11,264,000, or $0.81 per diluted share, as compared to $10,848,000, or $0.77 per diluted share, in the same period of 2013. For the quarter EBITDA1 was $19,669,000, as compared to $19,470,000 in the same period one year ago.

For the six months ended July 4, 2014, revenues before reimbursements increased to $145,298,000, as compared to $140,911,000 in the same period of 2013. Total revenues increased to $152,536,000 as compared to $148,165,000 in the same period one year ago.

Net income for first half of 2014 increased to $20,418,000, or $1.47 per diluted share, as compared to $18,824,000, or $1.34 per diluted share, in the same period of 2013. For the first half of 2014, EBITDA increased to $36,312,000, as compared to $34,079,000 in the same period one year ago.

During the first half of 2014, Exponent repurchased $14.4 million of common stock, and paid dividends of $6.6 million. The Company closed the second quarter with $144.5 million in cash, cash equivalents and short-term investments.

"For the second quarter revenues were in line with our guidance while our EBITDA margin was better than expected," commented Dr. Paul Johnston, President and CEO. "Our reactive project work continued at a steady pace and we experienced good demand for our proactive consulting services, particularly in the consumer electronics, medical device, and utility industries.

"The second quarter wrapped up a solid first half of 2014, putting Exponent in a position to achieve growth in revenues before reimbursements in the low single digits for the fiscal year. Considering our performance in the first half, we are improving our 2014 outlook on EBITDA margin by 75 basis points to be down by approximately 25 basis points from the 24.6% margin in 2013.

"Exponent continues to be a leading, multi-disciplinary engineering and scientific consulting firm and we are excited about the opportunities that this market position presents us well into the future," concluded Dr. Johnston.

Today's Conference Call Information

Exponent will discuss its financial results in more detail on a conference call today, Tuesday, July 22, 2014, starting at 4:30 p.m. Eastern Time/1:30 p.m. Pacific Time. The audio of the conference call is available by dialing 888-466-4462 or 719-325-2329. 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 web site, or by dialing 888-203-1112 or 719-457-0820, and entering passcode 1309235#.

About Exponent

Exponent is an engineering and scientific consulting firm providing solutions to complex problems. Exponent's multidisciplinary organization of scientists, physicians, engineers, and business consultants brings together more than 90 technical disciplines to address complicated issues facing industry and government today. The firm has been best known for analyzing accidents and failures to determine their causes, but in recent years it has become more active in assisting clients with human health, environmental and engineering issues associated with new products to help prevent problems in the future.

Exponent may be reached at (888) 656-EXPO, info@exponent.com, or www.exponent.com.

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 thereto under) 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. Such forward-looking statements are subject to the safe harbor created by the Private Securities Litigation Reform Act of 1995. When used in this document and in the documents incorporated herein by reference, the words "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 10-K 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.

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.

 
 
 
EXPONENT, INC. 
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
For the Quarters Ended July 4, 2014 and June 28, 2013
(unaudited)
(in thousands, except per share data)
         
     
   Quarter Ended   Six Months Ended 
   July 4,   June 28,   July 4,   June 28, 
   2014   2013   2014   2013 
         
Revenues        
Revenues before reimbursements  $ 72,331  $ 71,919  $ 145,298  $ 140,911
Reimbursements  4,243  3,586  7,238  7,254
         
Revenues  76,574  75,505  152,536  148,165
         
Operating expenses        
Compensation and related expenses  46,049  44,432  94,907  92,994
Other operating expenses  6,450  6,207  12,767  12,354
Reimbursable expenses  4,243  3,586  7,238  7,254
General and administrative expenses  3,748  3,687  7,446  7,119
         
   60,490  57,912  122,358  119,721
         
Operating income  16,084  17,593  30,178  28,444
         
Other income        
Interest income, net  40  36  84  81
Miscellaneous income (expense), net  2,274  642  3,501  3,251
   2,314  678  3,585  3,332
         
Income before income taxes  18,398  18,271  33,763  31,776
         
Income taxes  7,134  7,423  13,345  12,952
         
         
Net income  $ 11,264  $ 10,848  $ 20,418  $ 18,824
         
         
Net income per share:        
Basic  $ 0.83  $ 0.80  $ 1.51  $ 1.38
Diluted  $ 0.81  $ 0.77  $ 1.47  $ 1.34
         
Shares used in per share computations:        
Basic  13,520  13,637  13,528  13,658
Diluted  13,873  14,007  13,919  14,068
 
 
 
EXPONENT, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
July 4, 2014 and January 3, 2014
(unaudited)
(in thousands)
       
       
   July 4,   January 3,   
   2014   2014   
Assets      
Current assets:      
Cash and cash equivalents  $ 112,895  $ 122,948  
Short-term investments  31,647  33,171  
Accounts receivable, net  85,795  76,980  
Prepaid expenses and other assets  14,551  10,450  
Deferred income taxes  10,330  8,135  
Total current assets  255,218  251,684  
Property, equipment and leasehold improvements, net  28,831  28,721  
Goodwill  8,607  8,607  
Other assets  58,464  55,154  
   $ 351,120  $ 344,166  
       
Liabilities and Stockholders' Equity      
Current liabilities:      
Accounts payable and accrued liabilities  $ 9,985  $ 8,442  
Accrued payroll and employee benefits  47,590  56,934  
Deferred revenues  6,936  6,771  
Total current liabilities  64,511  72,147  
Other liabilities  38,490  34,628  
Deferred rent  2,200  2,332  
Total liabilities  105,201  109,107  
       
Stockholders' equity:      
Common stock  16  16  
Additional paid-in capital  157,594  141,250  
Accumulated other comprehensive income  500  109  
Retained earnings  233,436  226,040  
Treasury stock, at cost  (145,627)  (132,356)  
Total stockholders' equity  245,919  235,059  
   $ 351,120  $ 344,166  
 
 
 
EXPONENT, INC. 
EBITDA and EBITDAS (1) 
For the Quarters Ended July 4, 2014 and June 28, 2013
(unaudited)
(in thousands)
         
     
   Quarter Ended   Six Months Ended 
   July 4,   June 28,   July 4,   June 28, 
   2014   2013   2014   2013 
         
Net Income  $ 11,264  $ 10,848  $ 20,418  $ 18,824
         
Add back (subtract):        
         
Income taxes  7,134  7,423  13,345  12,952
Interest income, net  (40)  (36)  (84)  (81)
Depreciation and amortization  1,311  1,235  2,633  2,384
         
EBITDA (1)  19,669  19,470  36,312  34,079
         
Stock-based compensation  2,582  3,040  7,875  8,331
         
EBITDAS (1)  $ 22,251  $ 22,510  $ 44,187  $ 42,410
         
         
         
(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 compliment 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.