8-K - EXPO - Equibles

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_________________

FORM 8-K

_________________

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): February 6, 2020

_______________________________

EXPONENT INC

(Exact name of registrant as specified in its charter)

_______________________________

Delaware	0-18655	77-0218904
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

149 Commonwealth Drive

Menlo Park, California 94025

(Address of Principal Executive Offices) (Zip Code)

(650) 326-9400

(Registrant's telephone number, including area code)

(Former name or former address, if changed since last report)

_______________________________

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.001 per share	EXPO	Nasdaq Global Select Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company,indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02. Results of Operations and Financial Condition. On February 6, 2020, Exponent, Inc. issued a press release announcing its financial results for the fourth quarter ended January 3, 2020. The press release is attached hereto as Exhibit 99.1 and incorporated by reference.

Item 7.01. Regulation FD Disclosure. On February 6, 2020, Exponent, Inc. announced that its Board of Directors has declared a quarterly cash dividend of $0.19 per share to be paid on March 27, 2020 to all common stockholders of record as of March 13, 2020. A copy of the press release announcing the dividend is attached hereto as Exhibit 99.2 and is incorporated herein by reference.

Item 9.01. Financial Statements and Exhibits.

99.1	Press release dated February 6, 2020.
99.2	Press release dated February 6, 2020.
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	EXPONENT INC
Date: February 6, 2020	By:	/s/ Richard L. Schlenker
		Richard L. Schlenker
		Executive Vice President, Chief Financial Officer, and Corporate Secretary

EdgarFiling EXHIBIT 99.1

Exponent Reports Fourth Quarter and Fiscal Year 2019 Financial Results

MENLO PARK, Calif., Feb. 06, 2020 (GLOBE NEWSWIRE) -- 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.

EBITDA^1^ 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.

EBITDA^1^ 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 EBITDA^1^ 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.
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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.
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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		$	124,550		$	113,851
(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.

EdgarFiling EXHIBIT 99.2

Exponent Increases Quarterly Dividend Payment from $0.16 to $0.19 per Share

MENLO PARK, Calif., Feb. 06, 2020 (GLOBE NEWSWIRE) -- Exponent, Inc. (Nasdaq:EXPO) today announced that its Board of Directors has declared an increased quarterly cash dividend of $0.19 per share of common stock to be paid on March 27, 2020 to all common stockholders of record as of March 13, 2020.

“In 2019, we paid $34 million in dividends and ended the year with $232 million in cash, cash equivalents and short-term investments. We believe that the increase in our regular quarterly dividend payment demonstrates our ongoing commitment to delivering value to our shareholders and maintaining a strong financial position,” commented Dr. Catherine Corrigan, President and Chief Executive Officer.

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 subject to the final determination of Exponent's Board of Directors.

About Exponent

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

Source: Exponent, Inc.