Exponent Reports Fourth Quarter and Fiscal Year 2012 Results
Exponent Reports Fourth Quarter and Fiscal Year 2012 Results MENLO PARK, Calif., Jan. 30, 2013 (GLOBE NEWSWIRE) -- Exponent, Inc. (Nasdaq:EXPO) today reported financial results for the fourth quarter and fiscal year ended December 28, 2012. For the fourth quarter of 2012, revenues before reimbursements increased 7% to $65,049,000, as compared to $60,524,000 in the fourth quarter of 2011. Total revenues increased 7% to $72,946,000, as compared to $67,916,000 in the same period one year ago. Net income for the fourth quarter increased 10% to $8,472,000, or $0.60 per diluted share, as compared to $7,731,000, or $0.54 per diluted share, reported in the same quarter one year ago. EBITDA^1 improved 10% to $15,607,000, as compared to $14,139,000 in the fourth quarter last year. For fiscal year 2012, revenues before reimbursements increased 8% to $266,562,000, as compared to $246,667,000, in 2011. Total revenues increased 7% to $292,653,000, as compared to $272,446,000 in the prior year. Net income for fiscal year 2012 improved 14% to $37,225,000, or $2.60 per diluted share, as compared to $32,695,000, or $2.22 per diluted share, reported in the prior year. EBITDA^1 improved 12% to $66,132,000, as compared to $58,994,000, in 2011. During 2012, Exponent generated $48.5 million in cash flow from operations, repurchased $23.4 million of its common stock, and closed the year with $134.1 million in cash, cash equivalents and short-term investments. "The fourth quarter concluded another good year of revenue growth and profitability for Exponent," commented Dr. Paul Johnston, President and CEO. "During our fourth quarter, we experienced good demand for both proactive and reactive services and continued to benefit from activity related to a few major assignments – resulting in high utilization despite our seasonally slower quarter. Additionally, our defense technology development practice had strong surveillance system product sales. "Throughout 2012, we assisted a wide range of clients in addressing significant technological, health and environmental matters by leveraging our breadth of disciplines and depth of engineering and scientific knowledge. We grew our consulting staff while achieving record utilization. "For the year, we had notable contributions in our environmental and health segment from our environmental sciences, ecological sciences, and chemical regulation and food safety practices. In our engineering and other scientific segment we had notable performances from our mechanics and materials, electrical, thermal, and engineering management consulting practices. "We previously communicated that over the last couple of years a few major assignments have accounted for a greater than usual percentage of revenues, and that there would be an impact on year-over-year revenue growth and profit margins when these assignments stepped down. As we enter 2013 we have experienced this anticipated step-down in these major assignments. Additionally, we are seeing the impact of constraints on defense spending and the reduction of forces in Afghanistan. As a result we expect 2013 revenues before reimbursements to be approximately flat with 2012 and EBITDA^1 margin to be down 250 to 300 basis points. "As we look forward we will continue to build upon our differentiated market position as a multidisciplinary engineering and scientific consulting firm with unparalleled technical expertise and experience. We remain optimistic about our market opportunities and look forward to translating these into long-term shareholder value," concluded Dr. Johnston. Today's Conference Call Information Exponent will discuss its financial results in more detail on a conference call today, January 30, 2013, starting at 4:30 p.m. Eastern Time/1:30 p.m. Pacific Time. The audio on the conference call is available by dialing 877-941-2068 or 480-629-9712. 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 800-406-7325 or 303-590-3030, and entering reservation 4588503#. 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, email@example.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 December 28, 2012 and December 30, 2011 (unaudited) (in thousands, except per share data) Quarters Ended Years Ended December December December December 28, 30, 28, 30, 2012 2011 2012 2011 Revenues Revenues before reimbursements $ 65,049 $ 60,524 $ 266,562 $ 246,667 Reimbursements 7,897 7,392 26,091 25,779 Revenues 72,946 67,916 292,653 272,446 Operating expenses Compensation and related expenses 41,188 39,594 171,809 156,853 Other operating expenses 6,152 5,894 23,574 23,238 Reimbursable expenses 7,897 7,392 26,091 25,779 General and administrative expenses 3,994 3,843 13,559 13,116 59,231 56,723 235,033 218,986 Operating income 13,715 11,193 57,620 53,460 Other income Interest income, net 83 95 328 236 Miscellaneous income, net 640 1,792 3,801 1,123 723 1,887 4,129 1,359 Income before income taxes 14,438 13,080 61,749 54,819 Income taxes 5,966 5,349 24,524 22,124 Net income $ 8,472 $ 7,731 $ 37,225 $ 32,695 Net income per share: Basic $ 0.62 $ 0.56 $ 2.70 $ 2.31 Diluted $ 0.60 $ 0.54 $ 2.60 $ 2.22 Shares used in per share computations: Basic 13,733 13,775 13,780 14,181 Diluted 14,208 14,322 14,293 14,751 EXPONENT, INC. CONDENSED CONSOLIDATED BALANCE SHEETS December 28, 2012 and December 30, 2011 (unaudited) (in thousands) December 28, December 30, 2012 2011 Assets Current assets: Cash and cash equivalents $ 113,268 $ 84,439 Short-term investments 20,881 25,260 Accounts receivable, net 85,361 73,065 Prepaid expenses and other assets 8,277 8,521 Deferred income taxes 7,657 7,293 Total current assets 235,444 198,578 Property, equipment and leasehold improvements, 27,446 27,215 net Goodwill 8,607 8,607 Other assets 43,920 34,388 $ 315,417 $ 268,788 Liabilities and Stockholders' Equity Current liabilities: Accounts payable and accrued liabilities $ 10,386 $ 6,738 Accrued payroll and employee benefits 54,720 48,089 Deferred revenues 6,665 5,948 Total current liabilities 71,771 60,775 Other liabilities 25,685 19,456 Deferred rent 1,532 1,842 Total liabilities 98,988 82,073 Stockholders' equity: Common stock 16 16 Additional paid-in capital 123,693 108,071 Accumulated other comprehensive loss (250) (471) Retained earnings 206,057 179,432 Treasury stock, at cost (113,087) (100,333) Total stockholders' equity 216,429 186,715 $ 315,417 $ 268,788 EXPONENT, INC. EBITDA and EBITDAS (1) For the Quarters Ended December 28, 2012 and December 30, 2011 (unaudited) (in thousands) Quarters Ended Years Ended December 28, December 30, December 28, December 30, 2012 2011 2012 2011 Net Income $ 8,472 $ 7,731 $ 37,225 $ 32,695 Add back (subtract): Income taxes 5,966 5,349 24,524 22,124 Interest income, (83) (95) (328) (236) net Depreciation and 1,252 1,154 4,711 4,411 amortization EBITDA (1) 15,607 14,139 66,132 58,994 Stock-based 2,446 2,133 12,378 10,340 compensation EBITDAS (1) $ 18,053 $ 16,272 $ 78,510 $ 69,334 (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.