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What changed in EXPONENT INC's 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of EXPONENT INC's 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+224 added−233 removedSource: 10-K (2023-02-24) vs 10-K (2022-02-25)

Top changes in EXPONENT INC's 2023 10-K

224 paragraphs added · 233 removed · 167 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

67 edited+15 added−30 removed57 unchanged
Biggest changeOur staff share their unique specialized scientific expertise on over 250 individual scientific and engineering committees and advisory boards. Many of our staff serve in leadership roles or are actively working to develop technical standards. Exponent’s professionals routinely contribute to the advancement of science through peer-reviewed scientific literature, publishing a multitude of articles, book chapters, and books every year.
Biggest changeWe advance scientific and engineering knowledge through the work of employees, but also through a comprehensive commitment to education, teaching, mentoring, publishing, and serving. Recognized leaders in their fields, Exponent staff serve on more than 250 individual scientific and engineering committees and advisory boards. Others serve in leadership roles or are actively working to develop technical standards.
We currently operate the following 17 practices in two reportable operating segments, (i) Engineering and Other Scientific and (ii) Environmental and Health: ENGINEERING AND OTHER SCIENTIFIC • Biomechanics • Biomedical Engineering & Sciences • Buildings & Structures • Civil Engineering 4 • Construction Consulting • Data Sciences • Electrical Engineering & Computer Science • Human Factors • Materials & Corrosion Engineering • Mechanical Engineering • Polymer Science & Materials Chemistry • Thermal Sciences • Vehicle Engineering ENVIRONMENTAL AND HEALTH • Chemical Regulation & Food Safety • Ecological & Biological Sciences • Environmental & Earth Sciences • Health Sciences ENGINEERING AND OTHER SCIENTIFIC Biomechanics Our Biomechanics Practice uses engineering and biomedical science to solve complex problems at the intersection of biology and engineering.
We currently operate the following 17 practices in two reportable operating segments, (i) Engineering and Other Scientific and (ii) Environmental and Health: ENGINEERING AND OTHER SCIENTIFIC • Biomechanics • Biomedical Engineering & Sciences • Buildings & Structures • Civil Engineering • Construction Consulting • Data Sciences • Electrical Engineering & Computer Science • Human Factors • Materials & Corrosion Engineering • Mechanical Engineering • Polymer Science & Materials Chemistry 4 • Thermal Sciences • Vehicle Engineering ENVIRONMENTAL AND HEALTH • Chemical Regulation & Food Safety • Ecological & Biological Sciences • Environmental & Earth Sciences • Health Sciences ENGINEERING AND OTHER SCIENTIFIC Biomechanics Our Biomechanics Practice uses engineering and principles of biomechanics to solve complex problems at the intersection of biology and engineering.
Our multidisciplinary team has extensive experience investigating a broad variety of health concerns such as claims of adverse health effects from exposures to a wide range of physical agents (e.g., ionizing radiation, low- and radio-frequency electromagnetic fields); chemical agents (e.g., volatile organic compounds, metals, dusts, air pollutants, mineral fibers, fumes, nanoparticles, and pharmaceuticals); and biological agents (fungi/molds, bacteria, and other micro-organisms).
Our multidisciplinary team has extensive experience investigating a broad variety of health concerns such as claims of adverse health effects from exposures to a wide range of physical agents (e.g., ionizing radiation, and low- and radio-frequency electromagnetic fields); chemical agents (e.g., volatile organic compounds, metals, dusts, air pollutants, mineral fibers, fumes, and nanoparticles); and biological agents (fungi/molds, bacteria, and other micro-organisms).
Pye held a research position in the Aerospace Fluid Mechanics Lab at Stanford University where he was responsible for the renovation and redesign of the Stanford Low-Speed wind tunnel as well as managing the Stanford experimental facilities for the Stanford/NASA Ames Joint Institute for Aeronautics and Astronautics. Richard Reiss, Sc.D., joined the Company in 2006 as a Principal Scientist.
Pye held a research position in the Aerospace Fluid Mechanics Lab at Stanford University where he was responsible for the renovation and redesign of the Stanford Low-Speed wind tunnel as well as managing the Stanford experimental facilities for the Stanford/NASA Ames Joint Institute for Aeronautics and Astronautics. 14 Richard Reiss, Sc.D., joined the Company in 2006 as a Principal Scientist.
Doyle served as Senior Vice President and General Manager, Realworld Enterprise Solutions, at IQVIA where he led a global team providing technology-enabled real world evidence (RWE) platforms and distributed data networks to help transform clinical, commercial, and medical operations for the biopharmaceutical industry. From 2014 to 2016, Dr.
Doyle served as Senior Vice President and General Manager, Real-World Enterprise Solutions, at IQVIA where he led a global team providing technology-enabled real world evidence (RWE) platforms and distributed data networks to help transform clinical, commercial, and medical operations for the biopharmaceutical industry. From 2014 to 2016, Dr.
James was appointed Group Vice President on January 4, 2020. Dr. James received his Ph.D. (1994) in Metallurgical and Materials Engineering from the Colorado School of Mines and 14 his B.S. (1988) in Metallurgical Engineering from the University of Washington. He is a licensed professional engineer in the states of California and Texas. Prior to joining Exponent, Dr.
James was appointed Group Vice President on January 4, 2020. Dr. James received his Ph.D. (1994) in Metallurgical and Materials Engineering from the Colorado School of Mines and his B.S. (1988) in Metallurgical Engineering from the University of Washington. He is a licensed professional engineer in the states of California and Texas. Prior to joining Exponent, Dr.
During the past year, we have evaluated numerous problems with residential, commercial and industrial structures for owners, designers, and builders at project sites around the world. Our evaluations often include property inspections, laboratory or on-site testing, engineering analysis, and the development of repair recommendations.
During the past year, we have evaluated numerous problems with residential, commercial, transportation, and industrial structures for owners, designers, and builders at project sites around the world. Our evaluations often include property inspections, laboratory or on-site testing, engineering analysis, and the development of repair recommendations.
Our experience helps clients build products that perform for a wide variety of users while preventing data bias, collecting personal data with consideration for privacy, and managing the risks associated with global data collection. 6 During the past year, our team worked on diverse projects for government, industry, and legal clients.
Our experience helps clients build products that perform for a wide variety of users while preventing data bias, collecting personal data with consideration for privacy, and managing the risks associated with global data collection. During the past year, our team worked on diverse projects for government, industry, and legal clients.
We provide practical, scientific and regulatory support to meet global business objectives at every stage of the product cycle, from research and development to retail and beyond. During the past year, our Chemical Regulation and Food Safety staff have conducted a wide array of work.
We provide practical, scientific and regulatory support to meet global business objectives at every stage of the product life cycle, from research and development to retail and beyond. During the past year, our Chemical Regulation and Food Safety staff have conducted a wide array of work.
Our projects include many sectors of the construction and engineering industry which include power plants, electric and gas utilities, petrochemical facilities, transportation systems, tunnels, airports, and sporting arenas. Data Sciences The Data Sciences practice comprises our core capabilities in statistics, data analytics, and dedicated data collection.
Our projects include many sectors of the construction and engineering industry which include power plants, electric and gas utilities, petrochemical facilities, data centers, transportation systems, tunnels, airports, and sporting arenas. Data Sciences The Data Sciences practice comprises our core capabilities in statistics, data analytics, and dedicated data collection.
Item 1. Business GENERAL Exponent, Inc., together with its subsidiaries, (“Exponent”, the “Company”, “we”, “us” and “our”) is a science and engineering consulting firm that provides solutions to complex problems. Our interdisciplinary team 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.
Item 1. B usiness GENERAL Exponent, Inc., together with its subsidiaries, (“Exponent”, the “Company”, “we”, “us” and “our”) is a science and engineering consulting firm that provides solutions to complex problems. Our interdisciplinary team 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.
Doyle served as Vice President, Global Healthcare Innovation Lead, at Pfizer where he led the Healthcare Innovation Center, tasked with transforming the company’s go-to-market model and building capabilities to enable Pfizer to thrive in a value-based healthcare marketplace providing equitable and affordable access to its medicine and vaccinees. From 2016 to 2019, Dr.
Doyle served as Vice President, Global Healthcare Innovation Lead, at Pfizer where he led the Healthcare Innovation Center, tasked with transforming the company’s go-to-market model and building capabilities to enable Pfizer to thrive in a value-based healthcare marketplace providing equitable and affordable access to its medicine and vaccines. From 2016 to 2019, Dr.
Our consultants also evaluated product designs for performance, hazards, and injury risks to assist clients with design modifications, address consumer feedback, and respond to regulators. Biomedical Engineering and Sciences Our Biomedical Engineering and Sciences Practice applies engineering principles to medical technologies, including the evaluation of designs and performance of medical devices, pharmaceuticals, and biologics.
Our consultants also evaluated product designs for performance, hazards, and injury risks to assist clients with design modifications, address consumer feedback, and respond to regulators. Biomedical Engineering and Sciences Our Biomedical Engineering and Sciences Practice applies engineering principles and scientific methodologies to medical technologies, including the evaluation of designs and performance of medical devices, pharmaceuticals, and biologics.
In Europe and the U.S., we continued to provide clients with regulatory compliance support for food contact materials, food additives, novel foods, nutrition-related analyses, as well as undertaking safety assessments for food and cosmetics products. We also provided proactive and reactive product safety and litigation support.
In Europe and the U.S., we continued to provide clients with regulatory compliance support for food contact materials, food additives, novel foods, nutrition-related analyses, as well as undertaking safety assessments for food and cosmetic products. We also provided proactive and reactive product safety and litigation support.
Ecological & Biological Sciences Our ecological and biological scientists provide strategic support on issues related to natural resources damages associated with chemicals and forest fires, international environmental disputes, ecosystem service assessments for businesses, adverse weather events/climate change, ecological risk assessment, ecotoxicology, novel remediation methods, restoration of wetlands and other natural resources, large development projects, resource utilization (such as mineral mining, oil and gas, wood pulp, etc.), agriculture land-use impacts, genomic assessments, and the use of chemicals and other products in commerce.
Ecological & Biological Sciences Our ecological and biological scientists provide strategic support on issues related to the environment and natural resources damages associated with chemicals and forest fires, international environmental disputes, ecosystem service assessments for businesses, adverse weather events/climate change, ecological risk assessment, ecotoxicology, novel remediation methods, restoration of wetlands and other natural resources, large development projects, resource utilization (such as mineral mining, oil and gas, wood pulp, transportation, etc.), agriculture land-use impacts, genomic assessments, product stewardship, and the use of chemicals and other products in commerce.
Shepard held a variety of roles at Exponent including Managing Engineer, Business Manager, Director of Human Resources and Information Technology, and Vice President of Corporate Human Resources. Ms. Shepard holds a B.S. (1982) in Mechanical Engineering from Stanford University. 16
Shepard held a variety of roles at Exponent including Managing Engineer, Business Manager, Director of Human Resources and Information Technology, and Vice President of Corporate Human Resources. Ms. Shepard holds a B.S. (1982) in Mechanical Engineering from Stanford University. 15
Our consultants are recognized nationally and internationally for their outstanding expertise and credentials, and their decades of experience in government, academia, and industry sectors. Our work has included numerous community and environmental health assessments, disease cluster investigations, survey research, cohort and case-control studies, exposure assessment and simulation studies, biologically based modeling, meta-analyses, and state-of-the-art literature reviews.
Our consultants are recognized nationally and internationally for their outstanding expertise and credentials, and their decades of experience in government, academia, and industry sectors. Our work has included numerous community and environmental health assessments, disease cluster investigations, survey research, real-world data platforms, cohort and case-control studies, exposure assessment and simulation studies, biologically based modeling, meta-analyses, and state-of-the-art literature reviews.
We can assess the potential health effects of occupational and environmental exposures; investigate accidental releases of chemicals and evaluate fate and transport of chemical substances; characterize consumer and workplace exposures through simulation and exposure reconstruction; develop measures of prevention and exposure control; and assist clients with occupational safety and health evaluations and emergency preparedness and response.
We can assess the potential health effects of occupational and environmental exposures; investigate accidental releases of chemicals and evaluate fate and transport of chemical substances; characterize consumer and workplace exposures through simulation and exposure reconstruction; develop measures of prevention and exposure control; and assist clients with occupational safety and health evaluations.
Our architects, structural engineers, and material scientists have been investigating such failures for decades, and we use this experience to solve problems with building systems and components, including finding the best repair options and mitigating the risk of future failures.
Our architects, structural engineers, and material scientists have been investigating such failures for decades, and we use this experience to solve problems with a variety of structural systems and components, including finding the best repair options and mitigating the risk of future failures.
Pricing and Terms of Engagements We provide our services on either a fixed-price basis or on a time and material basis, charging in the latter case hourly rates for each staff member involved in a project, based on his or her skills and experience. Our standard rates for professionals range from $180 to $850 per hour.
Pricing and Terms of Engagements We provide our services on either a fixed-price basis or on a time and material basis, charging in the latter case hourly rates for each staff member involved in a project, based on his or her skills and experience. Our standard rates for professionals range from $190 to $900 per hour.
The information engineering and science expertise we offer encompasses a breadth of areas including information and numerical sciences, algorithms and data structures, computer graphics, computer architecture, networking and communications, as well as security and cryptography. We operate laboratories for testing heavy equipment and electronics and we have a broad capability in analyzing computer software.
The computer science and engineering expertise we offer encompasses a breadth of areas including machine learning and artificial intelligence, information and numerical sciences, algorithms and data structures, computer graphics, computer architecture, networking and communications, as well as security and cryptography. We operate laboratories for testing heavy equipment and electronics and we have a broad capability in analyzing computer software.
The content of our Internet website is not incorporated into and is not part of this Annual Report on Form 10-K. EXECUTIVE OFFICERS OF THE REGISTRANT The executive officers of Exponent and their ages as of February 25, 2022 are as follows: Name Age Position Catherine Ford Corrigan, Ph.D. John J.
The content of our Internet website is not incorporated into and is not part of this Annual Report on Form 10-K. EXECUTIVE OFFICERS OF THE REGISTRANT The executive officers of Exponent and their ages as of February 24, 2023 are as follows: Name Age Position Catherine Ford Corrigan, Ph.D. John J.
Our Human Factors scientists have been actively engaged in research and project work with Advanced Driver Assistive System (ADAS) and automated vehicle technology, in order to understand and advise our clients on how these technologies may change the nature and dynamic of driving, and the role and performance of the driver.
Our Human Factors scientists have been actively engaged in research and project work with Advanced Driver Assistance Systems (ADAS) and automated vehicle technology, in order to understand and advise our clients on how these technologies may change the nature and dynamic of driving, and the role and performance of the driver.
In the past year, we have added several pharmacoepidemiologists and health economic experts in market access and value-based health care, expanding our team to providing expertise in the development and application of real-world evidence (RWE) for regulated medical products (drugs and biologics, vaccines, devices, and combination products); digital therapeutics; and care delivery models across the product life cycle from pre-approval planning to market access to post-approval safety evaluation and regulatory consulting on emergent safety issues.
In the past few years, we have added several pharmacoepidemiologists and health economic experts in market access and value-based health care, expanding our team to providing expertise in the development and application of real-world evidence (RWE) for regulated medical products (pharmaceuticals and biologics, vaccines, devices, and combination products); digital therapeutics; across the product life cycle from pre-approval planning to market access to post-approval safety evaluation and regulatory consulting on emergent safety issues.
Electrical Engineering & Computer Science Our Electrical Engineering and Computer Science Practice offers a broad range of expertise to address complex issues for industrial, government and law firm clients. Our power engineers advise clients on challenges relating to reliability of electrical systems, failures in power generation, transmission and distribution as well as on distributed generation, renewables and energy storage.
Electrical Engineering & Computer Science Our Electrical Engineering and Computer Science Practice offers a broad range of expertise to address complex issues for industrial, government and legal clients. Our power engineers advise clients on challenges relating to reliability of electrical systems, failures in power generation, transmission and distribution as well as on distributed generation, and renewables.
We have addressed critical issues for clients on industrial chemicals, pesticides, mineral fibers, drugs, medical devices, consumer products, nanotechnology, and other agents and products as they relate to human health risk.
We have addressed critical issues for clients on industrial chemicals, pesticides, mineral fibers, pharmaceuticals, medical devices, consumer products, digital health technology, nanotechnology, and other agents and products as they relate to human health risk.
Our Health Sciences team, working closely with Data Sciences, Human Factors, Polymers Science & Materials Chemistry, and other Practices, now has considerable expertise in healthcare data science; strategy, design, and application of health economics and outcomes research (HEOR) such as burden-of-illness assessment; selection, quality assessment, and analysis of electronic health records (EHR) and healthcare claims data; regulatory science, pharmacovigilance, and post-marketing requirement (PMR) support; health technology assessment (HTA) and dossier submissions; disease surveillance; meta-analysis; and the explication of methodological issues such as randomization, bias, data linkages, drug interactions, and identification of high-risk populations.
Our Health Sciences team, working closely with Biomechanics, Biomedical Engineering & Sciences, Data Sciences, Human Factors, Polymers Science & Materials Chemistry, and other practices, has considerable expertise in healthcare data science; strategy, design, and application of health economics and outcomes research such as burden-of-illness assessment; selection, quality assessment, and analysis of electronic health records (EHR) and healthcare claims and other types of real-world data (RWD); regulatory science, pharmacovigilance, and post-marketing requirement (PMR) support; health technology assessment (HTA) and dossier submissions; meta-analysis; and the explication of methodological issues such as randomization, bias, data linkages, drug interactions, and identification of high-risk populations.
He was appointed Executive Vice President in April 2010, Chief Financial Officer in July 1999 and Secretary of the Company in November 1997. Mr. Schlenker was the Director of Human Resources from 1998 until his appointment as Chief Financial Officer. He was the Manager of Corporate Development from 1996 until 1998. From 1993 to 1996, Mr.
Schlenker is the Executive Vice President, Chief Financial Officer and Corporate Secretary of the Company. He was appointed Executive Vice President in April 2010, Chief Financial Officer in July 1999 and Secretary of the Company in November 1997. Mr. Schlenker was the Director of Human Resources from 1998 until his appointment as Chief Financial Officer.
Reitman, Sc.D. 53 Group Vice President Richard L. Schlenker, Jr. 56 Executive Vice President, Chief Financial Officer and Corporate Secretary Sally B.
Reitman, Sc.D. 54 Group Vice President Richard L. Schlenker, Jr. 57 Executive Vice President, Chief Financial Officer and Corporate Secretary Sally B.
Construction Consulting Our Construction Consulting Practice provides expertise in the areas of project advisory, risk analysis, strategic planning, dispute resolution, delay analysis and financial damages. During the past year, we expanded the practice by leveraging key client relationships in several construction sectors including utilities, infrastructure and oil and gas.
Construction Consulting Our Construction Consulting Practice provides expertise in the areas of project advisory, risk analysis, strategic planning, dispute resolution, delay analysis and financial damages. Over the past year, we have continued to expand the practice by leveraging key client relationships in several construction sectors including utilities, data centers, infrastructure, and oil and gas.
During 2021, we provided services representing approximately 28%, 15%, 13% and 11% of revenues to clients in the consumer products industry, energy and utilities industries, transportation industry and chemical industry, respectively.
During 2022, we provided services representing approximately 31%, 15%, 13% and 10% of revenues to clients in the consumer products industry, energy and utilities industries, transportation industry and chemical industry, respectively.
We attribute our ability to grow technical full-time equivalent employees to a number of factors, including exciting and challenging assignments, strong leadership and management, the opportunity to learn new skills and advance careers, along with competitive and equitable total rewards.
During 2022 technical full-time equivalent employees increased 6% to 955 as compared to 900 during the prior year. We attribute our ability to grow technical full-time equivalent employees to a number of factors, including exciting and challenging assignments, strong leadership and management, the opportunity to learn new skills and advance careers, along with competitive and equitable total rewards.
Our state-of-the-art Phoenix User Research Center, with 5,000 square feet of research space, has six lab suites, including a dedicated focus group room, an ophthalmological lab, a motion capture lab, and wearable eye tracking technology, plus connectivity to our vehicle test track.
Our state-of-the-art Phoenix User Research Center, with 5,000 square feet of research space, has six lab suites, including a dedicated focus group room, an ophthalmological lab, a motion capture lab, and wearable eye tracking technology, plus connectivity to our vehicle test track. The scope of human factors engagements range from consulting on our clients’ research to providing turnkey research solutions.
Doyle, Dr.P.H. 53 51 President and Chief Executive Officer Group Vice President Brad A. James, Ph.D. 56 Group Vice President Harri K. Kytomaa, Ph.D. 63 Group Vice President Steven J. Murray, Ph.D. 47 Group Vice President John D. Pye, Ph.D. 51 Group Vice President Richard Reiss, Sc.D. 55 Group Vice President Maureen T.F.
Doyle, Dr.P.H. 54 52 President and Chief Executive Officer Group Vice President Brad A. James, Ph.D. 57 Group Vice President Harri K. Kytomaa, Ph.D. 64 Group Vice President Steven J. Murray, Ph.D. 48 Group Vice President John D. Pye, Ph.D. 52 Group Vice President Richard Reiss, Sc.D. 56 Group Vice President Maureen T.F.
To ensure a compelling total rewards philosophy and practice, we have practices in place to deliver fair and equitable compensation for employees based on their contribution and performance. We also offer a comprehensive set of benefits for employees and their families.
To ensure a compelling total rewards philosophy and practice, we have practices in place to deliver fair and equitable compensation for employees based on their contribution and performance. We also offer a comprehensive set of benefits for employees and their families. AVAILABLE INFORMATION The address of our Internet website is www.exponent.com .
From 2000 to 2001 Ms. Shepard served as Vice President Human Resources at Lutris Technologies. She also provided Human Resources consulting services for a variety of companies 15 between roles. From 1981 to 1999 Ms.
From 2002 to 2009 she served as Vice President Human Resources at CoWare, Inc., which was acquired by Synopsys. From 2000 to 2001 Ms. Shepard served as Vice President Human Resources at Lutris Technologies. She also provided Human Resources consulting services for a variety of companies between roles. From 1981 to 1999 Ms.
Shepard 61 Chief Human Resources Officer Executive officers of Exponent are appointed by the Board of Directors of the Company (the “Board of Directors”) and serve at the discretion of the Board of Directors until the appointment of their successors. There is no family relationship between any of the directors and officers of the Company.
Shepard 62 Chief Human Resources Officer Executive officers of Exponent are appointed by the Board of Directors of the Company (the “Board of Directors”) and serve at the discretion of the Board of Directors until the appointment of their successors.
We also assist with design and manufacturing failure analyses, root cause assessment, recall management, and medical device explant analysis. In addition, our staff performs analysis of clinical outcomes for medical devices and related procedures using administrative claims databases.
We also assist with design and manufacturing failure analyses, root cause assessment, recall management, and medical device explant analysis. In addition, our staff performs analysis of clinical outcomes for medical devices and related procedures using administrative claims databases. Our expertise is also utilized in product liability, intellectual property litigation, technology acquisition and due diligence matters.
Schlenker was a Business Manager, where he managed the business activities for multiple consulting practices within the Company. Prior to 1993, he held several different positions in finance and accounting within the Company. Mr. Schlenker holds a B.S. in Finance from the University of Southern California. Sally B.
He was the Manager of Corporate Development from 1996 until 1998. From 1993 to 1996, Mr. Schlenker was a Business Manager, where he managed the business activities for multiple consulting practices within the Company. Prior to 1993, he held several different positions in finance and accounting within the Company. Mr.
(1993) in Materials Science and Engineering from the Massachusetts Institute of Technology and her B.S. (1990) in Materials Science and Engineering from the Massachusetts Institute of Technology. She is a registered Professional Mechanical Engineer in the state of Maryland. Prior to joining Exponent, Dr. Reitman worked for the 3M Company in both research and management roles.
(1993) in Materials Science and Engineering from the Massachusetts Institute of Technology and her B.S. (1990) in Materials Science and Engineering from the Massachusetts Institute of Technology. She is a registered Professional Mechanical Engineer in the state of Maryland and a fellow of the Society of Plastics Engineers. Prior to joining Exponent, Dr.
Her activities at 3M included technology identification, materials selection and qualification, product development, customer support, program management, acquisition integration, intellectual property analysis, and patent litigation support. Richard L. Schlenker, Jr., joined the Company in 1990. Mr. Schlenker is the Executive Vice President, Chief Financial Officer and Corporate Secretary of the Company.
Reitman worked for the 3M Company in both research and management roles. Her activities at 3M included technology identification, materials selection and qualification, product development, customer support, program management, acquisition integration, intellectual property analysis, and patent litigation support. Richard L. Schlenker, Jr., joined the Company in 1990. Mr.
Our expertise is used to understand and evaluate the interaction between the human body as a biological system and the physical environment to explore the cause, nature, and severity of injuries.
Our expertise is used to understand and evaluate the interaction between the human body as a biological system and the physical environment to explore the cause, nature, and severity of injuries. Additionally, we utilize biomechanical principles to evaluate injury potential associated the use (and misuse) of consumer and industrial products.
Catherine Ford Corrigan, Ph.D., joined the Company in 1996. She was promoted to Principal in the Biomechanics practice in 2002 and was appointed Group Vice President in May 2012. Dr. Corrigan was named President in July 2016. She was named Chief Executive Officer and elected to the Board of Directors in May 2018. Dr. Corrigan earned her Ph.D.
There is no family relationship between any of the directors and officers of the Company. 13 Catherine Ford Corrigan, Ph.D., joined the Company in 1996. She was promoted to Principal in the Biomechanics practice in 2002 and was appointed Group Vice President in May 2012. Dr. Corrigan was named President in July 2016.
Shepard, rejoined the Company in 2014 as Vice President - Human Resources and was promoted to Chief Human Resources Officer in 2017. From 2012 to 2014 she served as Vice President Human Resources at 41st Parameter, which was acquired by Experian. From 2002 to 2009 she served as Vice President Human Resources at CoWare, Inc., which was acquired by Synopsys.
Schlenker holds a B.S. in Finance from the University of Southern California. Sally B. Shepard, rejoined the Company in 2014 as Vice President - Human Resources and was promoted to Chief Human Resources Officer in 2017. From 2012 to 2014 she served as Vice President Human Resources at 41st Parameter, which was acquired by Experian.
In many cases, clients also want us to assess what could have been done to reduce the severity of the accident or to mitigate occupant injuries to those involved.
Many of our projects involve addressing the cause of accidents and our clients rely on us to determine what happened in an accident and why it happened. In many cases, clients also want us to assess what could have been done to reduce the severity of the accident or to mitigate occupant injuries to those involved.
During the past year, significant program activities addressed 8 aspects of battery systems, consumer electronics, wearable devices, implantable medical devices, drug delivery systems, medical diagnostics, building materials, water handling systems, synthetic turf, the plastics supply chain, fire retardancy and flammability, technology scouting, materials science aspects of health risk, service life prediction, sustainability, and intellectual property related to consumer, recreational, medical, pharmaceutical, food packaging and other products, including trade secrets.
During the past year, significant program activities addressed aspects of battery systems, consumer electronics, wearable devices, implantable medical devices, drug delivery systems, medical diagnostics, building materials, water handling systems, oil & gas applications, the plastics supply chain, fire retardancy and flammability, technology scouting, materials science aspects of health risk, service life prediction, sustainability, and intellectual property related to consumer, recreational, medical, pharmaceutical, food packaging and other products. 8 Thermal Sciences Our Thermal Sciences Practice provides rapid response expert analysis to investigate failures involving thermo-fluid systems, fires, and explosions in residential, commercial, industrial and transportation sectors.
Corrigan was elected to the National Academy of Engineering. John Doyle, Dr.P.H., joined the Company on May 17, 2021 as Group Vice President. From 2019 to 2021, Dr.
Corrigan was a researcher in the Orthopaedic Biomechanics Laboratory at Beth Israel Hospital and Harvard Medical School. On February 9, 2021, Dr. Corrigan was elected to the National Academy of Engineering. John Doyle, Dr.P.H., joined the Company on May 17, 2021 as Group Vice President. From 2019 to 2021, Dr.
If this basic function is not achieved, it is because one or more aspect(s) of the building design or construction has failed.
If these basic functions are not achieved, it is because one or more aspect(s) of the structures design or construction has failed to meet a performance objective.
In addition to helping clients address the frequency and severity of incidents related to human error, fatigue, and performance, these and other similar project activities can be leveraged to improve efficiency, reliability, and maintainability of normal operations.
We also capitalize on this knowledge to conduct human error risk and culture assessments to help clients proactively control human performance gaps, improve occupational and process safety performance, and create administrative controls and procedures. 7 In addition to helping clients address the frequency and severity of incidents related to human error, fatigue, and performance, these and other similar project activities can be leveraged to improve efficiency, reliability, and maintainability of normal operations.
The scope of human factors engagements range from consulting on our clients’ research to providing turnkey research solutions. 7 We perform incident investigations and root cause analyses of near-misses and accidents involving human error in occupational and industrial settings.
We perform incident investigations and root cause analyses of near-misses and accidents involving human error in occupational and industrial settings.
As of December 31, 2021 approximately 87% of our employees are located in the United States and 13% are located in other global regions. Technical full-time equivalent employees is a key metric that we use to analyze our revenues. During 2021 technical full-time equivalent employees decreased 1% to 900 as compared to 912 during the prior year.
Our staff includes 921 employees with advanced degrees, of which 694 employees have achieved doctorate degrees. As of December 30, 2022 approximately 88% of our employees are located in the United States and 12% are located in other global regions. 12 Technical full-time equivalent employees is a key metric that we use to analyze our revenues.
We have gained a worldwide reputation for our ability to mobilize resources expeditiously and efficiently, integrate a broad array of technical disciplines, and provide valuable insight that is objective and withstands rigorous scrutiny. Many of our projects involve addressing the cause of accidents and our clients rely on us to determine what happened in an accident and why it happened.
Our Test and Engineering Center located in Phoenix, Arizona, is used for our most complex testing and analysis. We have gained a worldwide reputation for our ability to mobilize resources expeditiously and efficiently, integrate a broad array of technical disciplines, and provide valuable insight that is objective and withstands rigorous scrutiny.
ENVIRONMENTAL AND HEALTH SCIENCES Chemical Regulation & Food Safety Our Chemical Regulation and Food Safety Practice includes both technical and regulatory specialists who are experienced in dealing with foods, food ingredients, cosmetics, dietary supplements, pesticide and biocides (including conventional chemicals, biochemicals, microbials, antimicrobials/biocides, and products of biotechnology), and 9 industrial chemicals.
Whether the objective is design analysis, component testing, failure analysis, or accident reconstruction, our knowledge of vehicle systems and engineering principles coupled with our experience from conducting full-scale tests aim to add insight and proficiency to every project. 9 ENVIRONMENTAL AND HEALTH SCIENCES Chemical Regulation & Food Safety Our Chemical Regulation and Food Safety Practice includes both technical and regulatory specialists who are experienced in dealing with foods, food ingredients, cosmetics, dietary supplements, pesticides and biocides (including conventional chemicals, microbials, antimicrobials/biocides, products of biotechnology), industrial chemicals and pharmaceuticals.
Our team of electronic engineers works on failure analysis, product robustness and reliability for consumer and industrial electronics. Our information engineers and scientists work with high-tech industries and computer-controlled applications to evaluate product safety and software reliability.
Our computer scientists and engineers advise high-tech industry clients and work with computer-controlled applications to evaluate product safety and software reliability.
(1996) in Medical Engineering and Medical Physics and M.S. (1992) in Mechanical Engineering from the Massachusetts Institute of Technology and her B.S. in Bioengineering from the University of Pennsylvania. Prior to joining Exponent, Dr. Corrigan was a researcher in the Orthopaedic Biomechanics Laboratory at Beth Israel Hospital and Harvard Medical School. On February 9, 2021, Dr.
She was named Chief Executive Officer and elected to the Board of Directors in May 2018. Dr. Corrigan earned her Ph.D. (1996) in Medical Engineering and Medical Physics and M.S. (1992) in Mechanical Engineering from the Massachusetts Institute of Technology and her B.S. in Bioengineering from the University of Pennsylvania. Prior to joining Exponent, Dr.
In response to competitive forces in the marketplace, we continue to look for new markets for our various technical disciplines. 11 HUMAN CAPITAL Exponent's vision is to engage the brightest scientists and engineers to empower clients with solutions for a safe, healthy, sustainable and technologically complex world.
In response to competitive forces in the marketplace, we continue to look for new markets for our various technical disciplines. 11 HUMAN CAPITAL Exponent is a global engineering and scientific consulting firm that partners with clients to deliver breakthrough insights and answers.
We provide case-specific strategic and advisory consulting on risk mitigation, planning, and environmental regulatory and policy issues, as well as high-level technical strategic consulting to support critical business decisions and for complex matters where understanding the long-term implications of early technical actions is critical to managing overall liability. 10 Health Sciences Our health scientists, including epidemiologists, toxicologists, industrial hygienists, exposure scientists, air quality scientists, biostatisticians, risk assessment scientists, and physicians, apply scientific and medical principles to examine and address complex human-health-related risk, benefit, and value issues in a variety of settings.
Health Sciences Our health scientists, including epidemiologists, toxicologists, industrial hygienists, exposure scientists, air quality scientists, biostatisticians, risk assessment scientists, and physicians, apply scientific and medical principles to examine and address complex human-health-related risk, benefit, and value issues in a variety of settings.
Our work frequently involves complex and high visibility environmental problems and issues, often the focus of environmental or toxic tort claims, where evaluation of contamination and historical reconstruction of events, releases, and doses are central to problem resolution.
Our work frequently involves complex and high visibility environmental problems and issues, often the focus of environmental or toxic tort claims, where evaluation of contamination and historical reconstruction of events, releases, and doses are central to problem resolution. 10 We provide case-specific strategic and advisory consulting on risk mitigation, planning, and environmental regulatory and policy issues, as well as high-level technical strategic consulting to support critical business decisions and for complex matters where understanding the long-term implications of early technical actions is critical to managing overall liability.
In addition, we have worked with owners to assess and mitigate the risk of failure associated with hazards such as hurricanes, earthquakes, tsunamis and aging infrastructure. We have assessed these risks to high-rise buildings, industrial facilities, pipelines and nuclear power plant structures and provided testimony both in the U.S. and international courts of law.
In addition, we have worked with owners to assess and mitigate the risk of failure associated with hazards such as hurricanes, flooding, earthquakes, explosions, ground movement, and aging infrastructure.
Vehicle Engineering We have performed thousands of investigations for the automotive, trucking, recreational vehicle, marine, aerospace, and rail industries. Internal research programs and client projects have resulted in technological contributions that have assisted manufacturers in the understanding of product performance and provided insight to government agencies in establishing policy and regulations.
Internal research programs and client projects have resulted in technological contributions that have assisted manufacturers in the understanding of product performance and provided insight to government agencies in establishing policy and regulations. Information gained from these analyses has also assisted clients in assessing preventive measures related to the design of their products, as well as evaluating failures.
Over the past year, our consultants have been engaged in a number of investigations related to wildland fires, landslide evaluations, construction vibration claims, construction claim and defect evaluations, and seismic design evaluations. This practice provided services for property owners, contractors, design professionals, state agencies, international government agencies, attorneys and insurance carriers.
Over the past year, our consultants have been engaged in a number of investigations related to wildland fires, landslide evaluations, construction claim and defect evaluations, foundation and retaining wall failures, and effects of infrastructure projects on the surrounding environments.
Our expertise is also utilized in product liability, intellectual property litigation, technology acquisition and due diligence matters. 5 Buildings & Structures The basic function of a building is to provide structurally sound, durable, economically constructed and environmentally controlled space to house and protect occupants and contents.
Buildings & Structures The basic function of a building, bridge, or other type of structure is to provide a safe, durable, economically constructed and environmentally controlled system to house, transport, or otherwise protect occupants and contents.
In recent years, the Thermal Sciences Practice has developed tools to evaluate fire and explosion risks of lithium-ion batteries. We have consulted with a variety of clients to evaluate and mitigate fire and explosion hazards of batteries in applications including consumer products, vehicles and energy storage. We continue to be very active in wildland fire investigation and risk assessment.
Preventive services include process safety hazard analysis for the chemical and oil & gas industries, fire protection engineering, product development support and dust explosion consulting. In recent years, the Thermal Sciences Practice has developed tools to evaluate fire and explosion risks of lithium-ion batteries in applications including consumer products, vehicles, and grid-scale energy storage.
Civil Engineering Our Civil Engineering Practice provides broad expertise that includes geotechnical engineering, geological engineering, engineering geology, and geology to address a host of geo-failures, including landslides, foundation and retaining wall failures, pipeline failures, dam and levee failures. The practice’s expertise also includes evaluation of complex construction claims involving geotechnical design issues, wildland fire effects, and international construction disputes.
Examples of geo-failures evaluated by the practice include landslides, foundation and retaining wall failures, pipeline failures, dam and levee failures. The practice’s evaluation of complex construction claims involves geotechnical design issues, site characterization, and damage from adjacent construction.
Thermal Sciences Our Thermal Sciences Practice provides multi-disciplinary expertise to assist clients in chemical, fire protection, and mechanical engineering. We have investigated and analyzed thousands of fires and explosions ranging from high loss disasters at manufacturing facilities, energy facilities and oil and gas installations to small insurance claims.
We have investigated and analyzed thousands of thermal incidents ranging from high loss disasters in the oil & gas sector and major wildland fires, to small insurance claims. Information gained from these analyses has allowed us to also assist clients in making their assets and products safer.
Exponent staff have published over 900 articles in scientific and engineering journals. More than 50 Exponent consultants currently hold positions at academic institutions, where they serve as professors, research professors, adjunct and associate faculty, lecturers, instructors, and advisors. At Exponent, the health and safety of our employees is extremely important to us.
Exponent’s professionals routinely contribute to peer-reviewed scientific literature and publish articles, chapters, and books each year. To date, Exponent staff have published more than 1,200 articles in scientific and engineering journals. And today, more than 50 Exponent consultants serve as professors, lecturers, instructors, and advisors at universities and academic institutions across the country and around the world.
Our U.S. offices continued to provide services related to new pesticide active ingredients and end-use product development and registrations in the U.S., Canada, and Mexico, registration review by the U.S.
The U.S. side of our business was also involved in many projects related to agrochemical and biochemical product regulatory submissions in the U.S., Canada and Mexico. These included new active ingredients, end-use products, emerging technologies state registration, and import tolerances (EPA and FDA).
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We also capitalize on this knowledge to conduct human error risk and culture assessments to help clients proactively control human performance gaps, improve occupational and process safety performance, and create administrative controls and procedures.
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We have assessed these risks to high-rise buildings, bridges, tunnels, industrial facilities, pipelines and nuclear power plant structures and provided testimony both in the U.S. and international courts of law. 5 Civil Engineering Our Civil Engineering Practice provides broad expertise that includes geotechnical engineering, geological engineering, engineering geology, and geology to address a host of geo-failures, complex international and domestic construction claims, and disputes involving expert consultation and testimony.
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Information gained from these analyses has helped us assist clients with preventive measures related to the design of their facilities and products. We assist clients in minimizing the risk of fires and explosions, we provide regulatory consulting for permitting new industrial facilities, and we assist manufacturers in addressing the risk of fires associated with consumer products.
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The practice has been a leader in using advanced remote sensing technologies to evaluate complex problems and applying this state of the art technology to solutions and insight into clients' engineering challenges. This practice provided services for property owners, contractors, design professionals, state agencies, international government agencies, attorneys and insurance carriers.
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Our engineers use fire modeling and other computational fluid dynamics modeling tools to supplement our analytical, experimental, and field-based activities. Preventive services include process safety hazard analysis for the chemical and oil and gas industries, fire protection engineering and dust explosion consulting.
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In the area of energy storage, we are a leader in the industry in expertise and capabilities for safety of large format batteries, whether for electric vehicles or distributed storage. 6 Our team of electronic engineers works on failure analysis, product robustness and reliability for consumer devices, industrial electronics and the health industry.
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During the past year, our work in oil and gas exploration and production, liquefied natural gas and downstream oil and gas sectors has continued. Our services in these areas include assessing new oil well control technologies, assessing potential fire and explosion risks and consequences, investigating loss of containment incidents and assessing the integrity of fixed assets.
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Our staff consisting of mechanical, chemical, fire protection, aeronautical & astronautical and nuclear engineers have assisted clients in assessing risk to, and from, their facilities, consumer product recalls, regulatory compliance and frequently provide expert testimony in domestic litigation and international arbitration. Our engineers use computational fluid dynamics, fire, and explosion modeling tools to supplement our analytical, experimental, and field-based activities.
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Information gained from these analyses has also assisted clients in assessing preventive measures related to the design of their products, as well as evaluating failures. Our Test and Engineering Center located in Phoenix, Arizona, is used for our most complex testing and analysis.
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We continue to be very active in wildland fire investigation and continue to assist our clients in making informed risk-based decisions related to their assets and wildfires. During the past year, our work in oil & gas exploration and production, liquefied natural gas and downstream oil & gas sectors has continued.
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Whether the objective is design analysis, component testing, failure analysis, or accident reconstruction, our knowledge of vehicle systems and engineering principles coupled with our experience from conducting full-scale tests aim to add insight and proficiency to every project.
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Our work in fire detection and protection related issues remains robust, and our work in consumer product recall and international arbitration has grown. Vehicle Engineering We have performed thousands of investigations for the automotive, trucking, recreational vehicle, marine, aerospace, and rail industries.
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Due to the pandemic numerous regulatory dossiers and risk assessments were prepared for emergency registration of biocidal products (surface disinfectants and hand sanitizers) throughout Europe.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThe bankruptcy of a client with substantial accounts receivable could have a material adverse effect on our financial condition and results of operations. Our business is dependent on our professional reputation. The professional reputation of Exponent and its consultants is critical to our ability to successfully compete for new client engagements and attract or retain professionals.
Biggest changeThe professional reputation of Exponent and its consultants is critical to our ability to successfully compete for new client engagements and attract or retain professionals. Proven or unproven allegations against us may damage our professional reputation. Any factors that damage our professional reputation could have a material adverse effect on our business.
We manage, utilize, and store sensitive or confidential client or employee data, including personal data and protected health information.
We manage, utilize, and store sensitive or confidential client and employee data, including personal data and protected health information.
Any litigation against 21 us could cause us to incur substantial costs, divert the time and attention of our management and other resources, or otherwise harm our business. There can be no assurance that we will continue to declare cash dividends or repurchase our shares at all or in any particular amounts .
Any litigation against us could cause us to incur substantial costs, divert the time and attention of our management and other resources, or otherwise harm our business. 21 There can be no assurance that we will continue to declare cash dividends or repurchase our shares at all or in any particular amounts .
To the extent changes in such laws, regulations and enforcement or other factors significantly reduce the exposures of manufacturers, owners, service providers and others to liability, the demand for our services may be significantly reduced. Tort reform can reduce demand for our services. Several of our practices have a significant concentration in litigation support consulting services.
To the extent changes in such laws, regulations and enforcement or other factors significantly reduce the exposures of manufacturers, owners, service providers and others to liability, the demand for our services may be significantly reduced. 16 Tort reform can reduce demand for our services. Several of our practices have a significant concentration in litigation support consulting services.
If any person, including any of our employees, negligently disregards or intentionally breaches our established controls with respect to client or employee data, or otherwise mismanages or misappropriates that data, we could be subject to significant monetary damages, regulatory enforcement actions, fines, and/or criminal prosecution.
If any person, including any of our employees, negligently disregards or intentionally breaches our established controls with respect to client or employee data, or otherwise mismanages or misappropriates that data, we could also be subject to significant monetary damages, regulatory enforcement actions, fines, and/or criminal prosecution.
The 18 inherent limitations of internal controls may not prevent or detect all improper or illegal activities, regardless of the adequacy of such controls. Government contracts, and the proceedings surrounding them, are often subject to more extensive scrutiny and publicity than other commercial contracts.
The inherent limitations of internal controls may not prevent or detect all improper or illegal activities, regardless of the adequacy of such controls. Government contracts, and the proceedings surrounding them, are often subject to more extensive scrutiny and publicity than other commercial contracts.
While we have taken reasonable steps to prevent and mitigate the damage of a security breach by continuously improving our design and coordination of security controls across our business, those steps may not be effective and there can be no assurance that any such steps can be effective against all possible risks. 19 Failure to protect client and employee data may have an adverse effect on our business.
While we have taken reasonable steps to prevent and mitigate the damage of a security breach by continuously improving our design and coordination of security controls across our business, those steps may not be effective and there can be no assurance that any such steps can be effective against all possible risks. 18 Failure to protect client and employee data may have an adverse effect on our business.
Item 1A. Risk Factors Exponent operates in a rapidly changing environment that involves a number of uncertainties, some of which are beyond our control and may have a material adverse effect on our financial condition and results of operations. These uncertainties include, but are not limited to, those mentioned elsewhere in this report and those set forth below.
Item 1A. Ri sk Factors Exponent operates in a rapidly changing environment that involves a number of uncertainties, some of which are beyond our control and may have a material adverse effect on our financial condition and results of operations. These uncertainties include, but are not limited to, those mentioned elsewhere in this report and those set forth below.
A disruption or failure of these systems in the event of a major earthquake, fire, flood, tsunami or other weather event, power loss, telecommunications failure, software or hardware malfunctions, pandemics, cyber-attack, war, terrorist attack or other catastrophic event that our disaster recovery plans do not adequately address, could have a material adverse effect on our business, financial condition or results of operations.
A disruption or failure of these systems in the event of a major earthquake, fire, flood, tsunami or other weather event, power loss, telecommunications failure, software or hardware malfunctions, pandemics (including the COVID-19 pandemic), cyber-attack, war, terrorist attack or other catastrophic event that our disaster recovery plans do not adequately address, could have a material adverse effect on our business, financial condition or results of operations.
Competitive pressure could reduce the market acceptance of our services and result in price reductions that could have a material adverse effect on our business, financial condition or results of operations. We hold substantial investments that could present liquidity risks. Our cash equivalent portfolio as of December 31, 2021 consisted primarily of obligations of the U.S. Treasury.
Competitive pressure could reduce the market acceptance of our services and result in price reductions that could have a material adverse effect on our business, financial condition or results of operations. We hold substantial investments that could present liquidity risks. Our cash equivalent portfolio as of December 30, 2022 consisted primarily of obligations of the U.S. Treasury.
As a result, we are subject to numerous laws and regulations designed to protect this information, such as the U.S. federal and state laws governing the protection of health or other personally identifiable information, including the Health Insurance Portability and Accountability Act, and international laws such as the European Union General Data Protection Regulation.
As a result, we are subject to numerous laws and regulations designed to protect this information, such as the U.S. federal and state laws governing the protection of health or other personally identifiable information, including the Health Insurance Portability and Accountability Act, and international laws such as the European Union General Data Protection Regulation and the People’s Republic of China’s Data Security Law.
Our quarterly results may vary. Variations in our revenues and operating results occur from time to time, as a result of a number of factors, such as the significance of client engagements commenced and completed during a quarter, the timing of engagements, the number of working days in a quarter, employee hiring and utilization rates, and integration of companies acquired.
Variations in our revenues and operating results occur from time to time, as a result of a number of factors, such as the significance of client engagements commenced and completed during a quarter, the timing of engagements, the number of working days in a quarter, employee hiring and utilization rates.
As of December 31, 2021, we had no impairment charge associated with our investment portfolio relating to such adverse financial market conditions.
As of December 30, 2022, we had no impairment charge associated with our investment portfolio relating to such adverse financial market conditions.
Our international operations carry special financial, business and legal risks, including cultural and language differences; employment laws and related factors that could result in lower utilization, higher staffing costs, and cyclical fluctuations of utilization and revenues; currency fluctuations that adversely affect our financial position and operating results; burdensome regulatory requirements and other barriers to conducting business; tariffs/trade disputes and other trade barriers including the United Kingdom’s decision to leave the European Union; geopolitical risks that could result in an adverse impact to our clients and Exponent, such as cyberattacks; managing the risks associated with engagements with foreign officials and governmental agencies, including the risks arising from the United States Foreign Corrupt Practices Act and the United Kingdom Bribery Act of 2010; managing the risks associated with global privacy and data security laws and regulations including the General Data Protection Regulation in Europe; greater difficulties in managing and staffing foreign operations; successful entry and execution in new markets; restrictions on the repatriation of earnings; potentially adverse tax consequences; other impending legislation that could add additional risks to the business; and the COVID-19 pandemic and resulting restrictions on business activity, which vary significantly by region.
Our international operations carry special financial, business and legal risks, including cultural and language differences; employment laws and related factors that could result in lower utilization, higher staffing costs, and cyclical fluctuations of utilization and revenues; currency fluctuations that adversely affect our financial position and operating results; burdensome regulatory requirements and other barriers to conducting business; tariffs/trade disputes and other trade barriers; geopolitical risks that could result in an adverse impact to our clients and Exponent, such as cyberattacks; armed conflicts and wars, including the Russia-Ukraine war; managing the risks associated with engagements with foreign officials and governmental agencies, including the risks arising from the United States Foreign Corrupt Practices Act and the United Kingdom Bribery Act of 2010; managing the risks associated with global privacy and data security laws and regulations including the General Data Protection Regulation in Europe; greater difficulties in managing and staffing foreign operations; successful entry and execution in new markets; restrictions on the repatriation of earnings; potentially adverse tax consequences; and other impending legislation that could add additional risks to the business.
On our balance sheet as of December 31, 2021, we have $8,607,000 of goodwill subject to periodic evaluation for impairment.
On our balance sheet as of December 30, 2022, we have $8,607,000 of goodwill subject to periodic evaluation for impairment.
A change in these principles can have a significant effect on our reported results and may even retroactively affect previously reported transactions. Additionally, the adoption of new or revised accounting principles may require that we make significant changes to our systems, processes and controls. Our business can be adversely affected by downturns in the overall economy.
A change in these principles can have a significant effect on our reported results and may even retroactively affect previously reported transactions. Additionally, the adoption of new or revised accounting principles may require that we make significant changes to our systems, processes and controls.
As our clients’ needs change, new technologies develop, and legal and regulatory processes change, we may be unable to timely hire or train personnel with the appropriate new set of skills and experience which could negatively impact our growth and profitability. The loss of a large client could adversely affect our business.
As our clients’ needs change, new technologies develop, and legal and regulatory processes change, we may be unable to timely hire or train personnel with the appropriate new set of skills and experience which could negatively impact our growth and profitability. We may not manage our growth effectively, and our profitability may suffer.
If a client's financial difficulties become severe, the client may be unwilling or unable to pay our invoices in the ordinary course of business, which could adversely affect collections of both our accounts receivable and unbilled services.
If a client's financial difficulties become severe, the client may be unwilling or unable to pay our invoices in the ordinary course of business, which could adversely affect collections of both our accounts receivable and unbilled services. The recent global economic downturn and increased cost of capital could impact the ability of our customers to pay for our services.
Public concern over health, safety and preservation of the environment has resulted in the enactment of a broad range of environmental and/or other laws and regulations by local, state and federal lawmakers and agencies.
Our business can be adversely impacted by deregulation or reduced regulatory enforcement. Public concern over health, safety and preservation of the environment has resulted in the enactment of a broad range of environmental and/or other laws and regulations by local, state and federal lawmakers and agencies.
We prepare our consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”). These principles are subject to interpretation by the SEC and various bodies formed to interpret and create appropriate accounting principles.
Changes in, or interpretations of, accounting principles could have a significant impact on our financial position and results of operations. We prepare our consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”). These principles are subject to interpretation by the SEC and various bodies formed to interpret and create appropriate accounting principles.
In addition, many states, U.S. federal governmental authorities and non-U.S. jurisdictions have adopted, proposed, or are considering adopting or proposing, additional data security and/or data privacy statutes or regulations such as the California Consumer Privacy Act. These laws and regulations are increasing in complexity and number.
In addition, many states, U.S. federal governmental authorities and non-U.S. jurisdictions have adopted, proposed, or are considering adopting or proposing, additional data security and/or data privacy statutes or regulations.
The unpredictable and reactive nature of our business can create uneven performance in any given quarter or year. Revenues are primarily derived from services provided in response to client requests or events that occur without notice, and engagements, generally billed as services are performed, are terminable or subject to postponement or delay at any time by clients.
Revenues are primarily derived from services provided in response to client requests or events that occur without notice, and engagements, generally billed as services are performed, are terminable or subject to postponement or delay at any time by clients.
Many of our engagements involve matters that could have a severe impact on a client's business, cause a client to lose significant amounts of money, or prevent a client from pursuing desirable business opportunities.
Our services typically involve difficult engineering and scientific assignments and carry risks of professional and other liability. Many of our engagements involve matters that could have a severe impact on a client's business, cause a client to lose significant amounts of money, or prevent a client from pursuing desirable business opportunities.
As a result, backlog at any particular time is small in relation to our quarterly or annual revenues and is not a reliable indicator of revenues for any future periods.
As a result, backlog at any particular time is small in relation to our quarterly or annual revenues and is not a reliable indicator of revenues for any future periods. Revenues and operating margins for any particular quarter are generally affected by staffing mix, resource requirements and timing and size of engagements.
General Risks Competition could reduce our pricing and adversely affect our business. The markets for our services are highly competitive. In addition, there are relatively low barriers to entry into our markets and we have faced, and expect to continue to face, additional competition from new entrants into our markets.
In addition, there are relatively low barriers to entry into our markets and we have faced, and expect to continue to face, additional competition from new entrants into our markets.
In addition, unauthorized disclosure of sensitive or confidential client or employee data, whether through systems failure, employee negligence, fraud, or misappropriation, could damage our reputation and cause us to lose clients and their related revenue in the future. Our remote working arrangements due to the COVID-19 pandemic may increase the risks associated with protecting client and employee data.
In addition, unauthorized disclosure of sensitive or confidential client or employee data, whether through systems failure, employee negligence, fraud, or misappropriation, could damage our reputation and cause us to lose clients and their related revenue in the future. Our international operations create special risks that could adversely affect our business.
We currently derive a significant portion of our revenues from clients in the chemical, construction, consumer products, energy, life sciences and transportation industries. The loss of any large client could have a material adverse effect on our business, financial condition or results of operations. Our clients may be unable to pay for our services .
The inability to effectively manage growth or the inability of our employees to achieve anticipated performance could have a material adverse effect on our business. The loss of a large client could adversely affect our business. We currently derive a significant portion of our revenues from clients in the chemical, construction, consumer products, energy, life sciences and transportation industries.
Revenues and operating margins for any particular quarter are generally affected by staffing mix, resource requirements and timing and size of engagements. 17 Our financial results could suffer if our clients’ needs change more rapidly than we are able to secure the appropriate mix of trained, skilled and experienced personnel.
Our financial results could suffer if our clients’ needs change more rapidly than we are able to secure the appropriate mix of trained, skilled and experienced personnel.
Our international operations create special risks that could adversely affect our business. In addition to our offices in the United States, we have a presence in the United Kingdom, Switzerland, Hong Kong, China, Singapore, Ireland, and Canada, and conduct business in several other countries.
In addition to our offices in the United States, we have a presence in the United Kingdom, Switzerland, Hong Kong, China, Singapore, Ireland, Germany, and Canada, and conduct business in several other countries. We expect to continue to expand globally and our international revenues may account for an increasing portion of our revenues in the future.
The duration and extent to which the COVID-19 pandemic will impact our future financial condition and results of operations remains uncertain.
The duration and extent to which the COVID-19 pandemic will impact our future financial condition and results of operations remains uncertain. The occurrence of regional epidemics or a global pandemic, such as the COVID-19 pandemic, have had and may continue to have an adverse effect on our operating results.
Climate-related events, including the increasing frequency of extreme weather events and their impact on critical infrastructure, have the potential to disrupt our business. Item 1B. Unresolved Staff Comments None.
For example, in California, wildfire danger increases the probability of planned power outages which may impact our employees’ abilities to commute to work and to stay connected. Climate-related events, including the increasing frequency of extreme weather events and their impact on critical infrastructure, have the potential to disrupt our business. 22 Item 1B. Unresolve d Staff Comments None.
Any decision by the client not to exercise contract options or to terminate, cancel, modify or curtail our programs or contracts would adversely affect our revenues, revenue growth and profitability. Risks Related to Our Operations Failure to attract and retain key employees may adversely affect our business. Exponent’s business involves the delivery of professional services and is labor-intensive.
Any decision by the client not to exercise contract options or to terminate, cancel, modify or curtail our programs or contracts would adversely affect our revenues, revenue growth and profitability. The effects of the COVID-19 pandemic have affected our operations and those of our clients.
Although the risks are organized by headings, and each risk is discussed separately, many are interrelated. Risks Related to Our Clients and Demand for Our Services The effects of the COVID-19 pandemic have affected our operations and those of our clients.
Although the risks are organized by headings, and each risk is discussed separately, many are interrelated. Risks Related to Our Clients and Demand for Our Services The unpredictable and reactive nature of our business can create uneven performance in any given quarter or year.
The loss of key managerial employees, business generators or any significant number of employees could have a material adverse impact on our business, including our ability to secure and complete engagements. Our engagements may result in professional or other liability. Our services typically involve difficult engineering and scientific assignments and carry risks of professional and other liability.
The loss of key managerial employees, business generators or any significant number of employees could have a material adverse impact on our business, including our ability to secure and complete engagements. We rely heavily on our 17 executive officers, group vice presidents, and practice/office directors to manage our operations.
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In March 2020, the World Health Organization declared the outbreak of COVID-19 a pandemic, which continues to spread throughout the U.S. and the world and has resulted in authorities implementing numerous measures to contain the virus, including travel bans and restrictions, quarantines, mark requirements, shelter-in-place orders, vaccination mandates, and business limitations and shutdowns.
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Our expected future growth presents numerous managerial, administrative, operational and other challenges. Our ability to manage the growth of our operations will require us to continue to improve our information systems and other internal systems and controls. In addition, our growth will increase our need to attract, develop, motivate and retain both our management and professional employees.
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While we are unable to accurately predict the full impact that the COVID-19 pandemic will have on our financial condition and results of operations due to numerous uncertainties, including the duration and severity of the pandemic and containment measures, compliance with these measures has impacted, and will likely continue to impact, our operations.
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The loss of any large client could have a material adverse effect on our business, financial condition or results of operations. Our clients may be unable to pay for our services .
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The vast majority of our employees have been working remotely since the implementation of government measures to contain the virus. These remote working arrangements may result in inefficiencies, delays and additional costs and risks. In addition, most of our clients are also working remotely, which may delay the initiation of new projects and the execution of on-going work.
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On occasion, some of our clients have entered bankruptcy, which has prevented us from collecting amounts owed to us. The bankruptcy of a client with substantial accounts receivable could have a material adverse effect on our financial condition and results of operations. Our business is dependent on our professional reputation.
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Some of our litigation support projects paused due to courthouse closures and associated legal delays. Travel restrictions have delayed work that requires inspection of a site or a product that cannot be shipped. The pandemic has also negatively impacted our ability to conduct user studies. Vaccination mandates may negatively impact our recruiting and employee retention.
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Our operations have also been and may in the future be negatively affected by a range of external factors related to the pandemic that are not within our control, including the emergence and spread of more transmissible variants. The COVID-19 pandemic and the various responses to it created significant volatility, uncertainty and economic disruption.
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The COVID-19 pandemic also raises the possibility of an extended global economic downturn and has caused volatility in financial markets, which could affect demand for our services and impact our financial condition and results of operations even after the pandemic is contained and the containment measures are lifted.
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We cannot predict the future impacts of this ongoing and any new pandemic(s), including: the duration and scope of such pandemic; governmental, business and individuals’ actions that may be taken in response; the effect on our clients’ demand for and ability to pay for our services; disruptions or restrictions on our employees’ ability to work and travel; and any courthouse closures or other legal delays that will negatively impact our litigation support work.
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We believe that our existing balances of cash, cash equivalents, and cash generated from operations are sufficient to satisfy our working capital needs, capital expenditures, outstanding commitments, stock repurchases, dividends and other liquidity requirements over at least the next 12 months.
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Future disruptions arising from the ongoing and any new pandemics could have a material adverse effect on our financial condition and results of operations. In addition to the potential direct impacts to our business, the global economy may continue to be impacted as a result of the actions taken in response to COVID-19.
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However, we continue to monitor the impact of the COVID-19 pandemic on our cash flows and on the credit and financial markets.
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To the extent that such a weakened global economy impacts our clients’ ability or willingness to pay for our services, we could see our business and results of operations negatively impacted. Risks Related to Our Operations Failure to attract and retain key employees may adversely affect our business. Exponent’s business involves the delivery of professional services and is labor-intensive.
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The duration and extent of the impact from the COVID-19 pandemic depends on future developments that cannot be accurately predicted at this time, such as the severity and transmission rate of the virus, the extent and effectiveness of containment actions, the emergence of new variants, the efficacy of vaccines, and the impact of these and other factors on our employees and clients.
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Given the highly specialized nature of our services and the scale of our operations, our executive officers, group vice presidents and practice/office directors must have a thorough understanding of our services and operations, as well as the skills and experience necessary to manage a large organization in diverse geographic locations.
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Additionally, the other risks described in this section may be exasperated by the COVID-19 pandemic. There can be no assurance, however, that the ultimate impact on our financial condition and results of operations will not be material. We will continue to evaluate the nature and extent of the impact of the COVID-19 pandemic to our business.
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We are unable to predict with certainty the impact that leadership transitions and the loss of certain employees in leadership roles may have on our business operations, prospects, financial results, client relationships, or employee retention or morale. Our engagements may result in professional or other liability.
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The COVID-19 pandemic raises the possibility of an extended global economic downturn, which may impact the ability of our customers to pay for our services. On occasion, some of our clients have entered bankruptcy, which has prevented us from collecting amounts owed to us.
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For instance, we may be subject to Federal Trade Commission (FTC) enforcement actions if the FTC has reason to believe we have engaged in unfair or deceptive privacy or data security practices in violation of the FTC Act.
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Proven or unproven allegations against us may damage our professional reputation. Any factors that damage our professional reputation could have a material adverse effect on our business. Our business can be adversely impacted by deregulation or reduced regulatory enforcement.
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There are also new U.S. state privacy laws, including the California Consumer Privacy Act, as amended by the California Privacy Rights Act, and other state laws that set forth comprehensive privacy and security obligations regarding the collection and processing of personal data. These laws and regulations are increasing in complexity and number.
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We expect to continue to expand globally and our international revenues may account for an increasing portion of our revenues in the future.
Added
Failure to comply with these laws and regulations may lead to significant monetary damages, regulatory enforcement actions, fines, penalties or other regulatory liabilities, such as orders or consent decrees forcing us to modify business practices, and reputational damage or third-party lawsuits for any noncompliance with such laws.
Removed
The COVID-19 pandemic raises the possibility of an extended global economic downturn, which increases the risk of long-lived asset impairment charges. Changes in, or interpretations of, accounting principles could have a significant impact on our financial position and results of operations.
Added
Employee or contractor misconduct, or our failure to comply with governmental, regulatory and legal requirements or with our company-wide Code of Business Conduct and Ethics and related policies could lead to governmental or legal proceedings that could expose us to significant liabilities and damage our reputation.
Removed
The markets that we serve are cyclical and subject to general economic conditions. The direction and relative strength of the global economy continues to be uncertain. If economic growth in the United States, where we primarily operate, slows, our clients may consolidate or go out of business and thus demand for our services could be reduced significantly.
Added
Misconduct, fraud, non-compliance with applicable laws and regulations or other improper activities by one of our employees, agents or partners could have a significant negative impact on our business and reputation.
Removed
Climate change may disrupt our business. The areas where we conduct business are vulnerable to the effects of climate change. For example, in California, wildfire danger increases the probability of planned power outages which may impact our employees’ abilities to commute to work and to stay connected.
Added
Such misconduct could include the failure to comply with government procurement regulations, regulations regarding the protection of classified information, regulations prohibiting bribery and other foreign corrupt practices, regulations regarding the pricing of labor and other costs in government contracts, regulations on lobbying or similar activities, regulations pertaining to the internal controls over financial reporting, environmental laws and any other applicable laws or regulations.
Added
Our Code of Business Conduct and Ethics and related policies mandate compliance with applicable laws including anti-bribery, and insider trading. Nonetheless, we cannot assure that our policies, procedures and related training programs will ensure full compliance with all applicable legal requirements.
Added
Illegal or improper conduct by our executive officers, directors, employees, independent consultants or contractors, or others who are subject to our policies and procedures could damage our reputation in the U.S. and internationally, which could adversely affect our existing client relationships or adversely affect our ability to attract and retain new clients, or lead to litigation or governmental or regulatory proceedings in the U.S. or foreign jurisdictions, or could subject us to fines and penalties, loss of security clearances and suspension or debarment from contracting, any or all of which could harm our reputation, reduce our revenue and profits and subject us to criminal and civil enforcement actions. 19 Failure to comply with domestic and international export laws could adversely affect our business.
Added
To the extent we export technical services, data and information outside of the locations where we operate, we are subject to U.S. and international laws and regulations governing international trade and exports, including but not limited to the International Traffic in Arms Regulations, the Export Administration Regulations and trade sanctions against embargoed countries.
Added
A failure to comply with these laws and regulations could result in civil or criminal sanctions, including the imposition of fines, the denial of export privileges and suspension or debarment from participation in U.S. government contracts, which could have a material adverse effect on our business.
Added
Our business depends on our ability to use and access information systems, and modernize or replace such systems from time to time, and failure to effectively maintain such systems or modernize or replace systems, or difficulties encountered in implementing new or replacement systems could materially adversely affect our business and operations and harm our reputation.
Added
We depend on multiple internal and external information systems for operating our business. We utilize commercially available third-party technology solutions, which in many cases are customized to our business needs.
Added
Our information systems may be compromised by power outages, computer and telecommunications failures, computer viruses, security breaches, hackers, catastrophic events, human error and other events, many of which are beyond our control, and are subject to obsolescence and technological changes.
Added
If our information systems fail to work properly or otherwise become unavailable, or if we encounter difficulties in integrating new or replacement systems, we may incur substantial time, efforts and costs to repair or replace such systems, or otherwise carry out our operations without the ability to use such systems.
Added
Failure of any such information system could result in delays, significant additional costs, incorrect information, failure of internal control and harm to our reputation as well as expose us to regulatory actions and claims any of which could adversely affect our business and results of operations and our reputation.
Added
Increases in operating expenses may adversely affect our profitability and margins . Increases in compensation and related expenses, other operating expenses, general and administrative expenses, and tax expenses due to inflation, supply chain disruptions, labor market conditions, real estate market conditions, geographic conditions, regulatory requirements, or other economic or political factors may adversely affect our profitability and margins.
Added
Increases in compensation and related expenses that exceed our bill rate increases, increases in rent when our operating leases expire, increases in compliance costs associated with new regulations, and increases in tax rates would adversely affect our profitability. General Risks Competition could reduce our pricing and adversely affect our business. The markets for our services are highly competitive.
Added
Uncertainty about current and future economic conditions and other adverse changes in general political conditions in any of the countries in which we do business could adversely affect our operating results.
Added
We are subject to risks arising from adverse changes in economic and political conditions, both domestically and globally, including unfavorable changes in economic conditions, such as inflation, rising interest rates or a recession, and other events beyond our control, such as economic sanctions, natural disasters, pandemics, including the COVID-19 pandemic, epidemics, political instability, armed conflicts and wars, including the Russia-Ukraine war.
Added
Worsening economic conditions have had and may continue to have an adverse impact on the businesses and financial health of many of our clients. As a result, current or potential clients may consolidate or go out of business and thus demand for our services may be reduced significantly. Our quarterly results may vary.
Added
Unavailability or cancellation of third-party insurance coverage would increase our overall risk exposure as well as disrupt the management of our business operations. We maintain insurance coverage from third-party insurers as part of our overall risk management strategy and because some of our contracts require us to maintain specific insurance coverage limits.
Added
If any of our third-party insurers fail, suddenly cancel our coverage or otherwise are unable to provide us with adequate insurance coverage, then our overall risk exposure and our operational expenses would increase and the management of our business operations would be disrupted.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties Our Silicon Valley office facilities consist of a 153,738 square foot building, with office and laboratory space located on a 6.3-acre tract of land we own in Menlo Park, California and an adjacent 27,000 square feet of warehouse storage space on a 1.1-acre tract of land that we also own.
Biggest changeItem 2. P roperties Our Silicon Valley office facilities consist of a 153,738 square foot building, with office and laboratory space located on a 6.3-acre tract of land we own in Menlo Park, California and an adjacent 27,000 square feet of warehouse storage space on a 1.1-acre tract of land that we also own.
In addition, we lease office and laboratory space in 20 other locations in 13 states and the District of Columbia, as well as in China, Hong Kong, Singapore, Switzerland and the United Kingdom. Leases for these offices and laboratory facilities have terms generally ranging between one and 10 years. Item 3.
In addition, we lease office and laboratory space in 21 other locations in 13 states and the District of Columbia, as well as in China, Hong Kong, Singapore, Switzerland and the United Kingdom. Leases for these offices and laboratory facilities have terms generally ranging between one and 10 years. Item 3.
Legal Proceedings Exponent is not engaged in any material legal proceedings. 22 Item 4. Mine Saf ety Disclosures Not applicable. 23 PART II
Legal Proceedings Exponent is not engaged in any material legal proceedings. Item 4. Mine Saf ety Disclosures Not applicable. 23 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeOn February 22, 2022 the Company’s Board of Directors announced an additional $150,000,000 for the repurchase of the Company’s common stock. These repurchase programs have no expiration dates.
Biggest changeOn May 29, 2020, the Company’s Board of Directors announced $45,000,000 for the repurchase of the Company’s common stock. On February 22, 2022 the Company’s Board of Directors announced an additional $150,000,000 for the repurchase of the Company’s common stock. These repurchase programs have no expiration dates.
COMPANY STOCK PRICE PERFORMANCE GRAPH This graph compares the Company’s cumulative total stockholder return calculated on a dividend-reinvested basis from 2017 through 2021 with those of the Standard & Poor’s (“S&P”) 500 Index and the S&P SmallCap 600 Index. The Company does not have a comparable peer group and thus has selected the S&P Small Cap 600 Index.
COMPANY STOCK PRICE PERFORMANCE GRAPH This graph compares the Company’s cumulative total stockholder return calculated on a dividend-reinvested basis from 2018 through 2022 with those of the Standard & Poor’s (“S&P”) 500 Index and the S&P SmallCap 600 Index. The Company does not have a comparable peer group and thus has selected the S&P Small Cap 600 Index.
The following table provides information on the Company’s share repurchases (of Company common stock) for the quarter ended December 31, 2021 (in thousands, except price per share): Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plan or Program October 2 to October 29 — $ — — $ 68,455 October 30 to November 26 — $ — — $ 68,455 November 27 to December 31 — $ — — $ 68,455 Total — $ — — Repurchases of the Company’s common stock were affected pursuant to a repurchase program authorized by the Company’s Board of Directors.
The following table provides information on the Company’s share repurchases (of Company common stock) for the quarter ended December 30, 2022 (in thousands, except price per share): Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plan or Program October 1 to October 28 151 $ 87.77 151 $ 62,598 October 29 to November 25 — $ — — $ 62,598 November 26 to December 30 — $ — — $ 62,598 Total 151 $ 87.77 151 Repurchases of the Company’s common stock were affected pursuant to a repurchase program authorized by the Company’s Board of Directors.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Exponent’s common stock is traded on the NASDAQ Global Select Market, under the symbol “EXPO.” As of February 18, 2022, there were 176 holders of record of our common stock.
Item 5. Market for Registrant’s Common Equity, Related Sto ckholder Matters and Issuer Purchases of Equity Securities Exponent’s common stock is traded on the NASDAQ Global Select Market, under the symbol “EXPO.” As of February 17, 2023, there were 172 holders of record of our common stock.
Removed
On January 31, 2019, the Company’s Board of Directors announced $75,000,000 for the repurchase of the Company’s common stock. On May 29, 2020, the Company’s Board of Directors announced an additional $45,000,000 for the repurchase of the Company’s common stock.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeWe lease office, laboratory, and storage space in 13 states and the District of Columbia, as well as in China, Hong Kong, Singapore, Switzerland, and the United Kingdom under non-cancellable operating lease arrangements that expire at various dates through 2028. As of December 31, 2021, the value of our obligations under operating leases was $16,763,000.
Biggest changeThe increase in net cash used in financing activities during 2022 as compared to 2021 was due to an increase in repurchases of our common stock and an increase in our quarterly dividend payment partially offset by a reduction in payroll taxes for restricted stock units. 30 We lease office, laboratory, and storage space in 13 states and the District of Columbia, as well as in China, Hong Kong, Singapore, Switzerland, and the United Kingdom under non-cancellable operating lease arrangements that expire at various dates through 2028.
These measures, however, should be considered in addition to, and not as a substitute or 31 superior to, operating income, cash flows, or other measures of financial performance prepared in accordance with GAAP. A reconciliation of the Non-GAAP measures to the nearest comparable GAAP measure is set forth below.
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 Non-GAAP measures to the nearest comparable GAAP measure is set forth below.
The increase in other income was primarily due to the change in value of assets associated with our deferred compensation plan partially offset by a decrease in interest income, a change in the realized gain/loss on foreign exchange, and a decrease in rental income.
The decrease in other income was primarily due to the change in 29 value of assets associated with our deferred compensation plan partially offset by an increase in interest income, a change in the realized gain/loss on foreign exchange, and an increase in rental income.
Discussions of 2019 and year-to-year comparisons between 2020 and 2019 that are not included in this Annual Report form 10-K can be found in Management’s Discussion and Analysis of Financial Condition and Results of Operations in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the fiscal year ended January 1, 2021.
Discussions of 2021 and year-to-year comparisons between 2021 and 2020 that are not included in this Annual Report form 10-K can be found in Management’s Discussion and Analysis of Financial Condition and Results of Operations in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021.
The increase in reimbursable expenses during 2021 was primarily due an increase in project-related travel and other project-related expenses as COVID-19 pandemic-related business and travel restrictions eased.
The increase in reimbursable expenses during 2022 was primarily due to an increase in project-related travel and other project-related expenses as COVID-19 pandemic-related business and travel restrictions eased.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations This section of this Annual Report on form 10-K generally discusses 2021 and 2020 items and year-to-year comparisons between 2021 and 2020.
Item 7. Management’s Discussion and Analysis o f Financial Condition and Results of Operations This section of this Annual Report on Form 10-K generally discusses 2022 and 2021 items and year-to-year comparisons between 2022 and 2021.
The excess tax benefit associated with stock-based awards decreased to $10,009,000 during 2021 as compared to $12,258,000 during 2020. The decrease in the excess tax benefit was due to a smaller increase in the value of our common stock between the grant date and the release date for the restricted stock units released during 2021 as compared to 2020.
The excess tax benefit associated with stock-based awards decreased to $5,829,000 during 2022 as compared to $10,009,000 during 2021. The decrease in the excess tax benefit was due to a smaller increase in the value of our common stock between the grant date and the release date for the restricted stock units released during 2022 as compared to 2021.
Other Operating Expenses (In thousands except percentages) Fiscal Years Percent 2021 2020 Change Other operating expenses $ 32,594 $ 32,234 1.1 % Percentage of total revenues 7.0 % 8.1 % Other operating expenses include facilities-related costs, technical materials, computer-related expenses and depreciation and amortization of property, equipment and leasehold improvements.
Other Operating Expenses (In thousands except percentages) Fiscal Years Percent 2022 2021 Change Other operating expenses $ 35,083 $ 32,594 7.6 % Percentage of total revenues 6.8 % 7.0 % Other operating expenses include facilities-related costs, technical materials, computer-related expenses and depreciation and amortization of property, equipment and leasehold improvements.
We operate on a 52-53 week fiscal year with each year ending on the Friday closest to December 31 st . Fiscal period 2021 included 52 weeks of activity and ended on December 31, 2021. Fiscal period 2020 inluded 52 weeks of activity and ended on January 1, 2021.
We operate on a 52-53 week fiscal year with each year ending on the Friday closest to December 31 st . Fiscal period 2022 included 52 weeks of activity and ended on December 30, 2022. Fiscal period 2021 included 52 weeks of activity and ended on December 31, 2021.
For all other customers we recognize allowances for contract losses and doubtful accounts taking into consideration factors such as historical write-offs, customer concentration, customer creditworthiness, current and forecasts of future economic conditions, and aging of amounts due. 25 The following table sets forth, for the periods indicated, the percentage of revenues of certain items in our consolidated statements of income and the percentage increase (decrease) in the dollar amount of such items year to year: Percentage of Revenues for Period to Fiscal Years Period Change 2021 2020 2021 v 2020 Revenues 100.0 % 100.0 % 16.6 % Operating expenses: Compensation and related expenses 59.6 62.5 11.2 Other operating expenses 7.0 8.1 1.1 Reimbursable expenses 6.7 5.4 46.2 General and administrative expenses 3.3 3.2 18.6 76.6 79.2 12.9 Operating income 23.4 20.8 30.8 Other income, net 3.6 3.4 23.5 Income before income taxes 27.0 24.2 29.8 Provision for income taxes 5.3 3.6 71.3 Net income 21.7 % 20.6 % 22.6 % EXECUTIVE SUMMARY Revenues for 2021 increased 17% and revenues before reimbursements increased 15% as compared to the prior year.
For all other customers we recognize allowances for contract losses and doubtful accounts taking into consideration factors such as historical write-offs, customer concentration, customer creditworthiness, current and forecasts of future economic conditions, and aging of amounts due. 25 The following table sets forth, for the periods indicated, the percentage of revenues of certain items in our consolidated statements of income and the percentage increase (decrease) in the dollar amount of such items year to year: Percentage of Revenues for Period to Fiscal Years Period Change 2022 2021 2022 v 2021 Revenues 100.0 % 100.0 % 10.1 % Operating expenses: Compensation and related expenses 51.5 59.6 (5.0 ) Other operating expenses 6.8 7.0 7.6 Reimbursable expenses 9.6 6.7 57.5 General and administrative expenses 4.6 3.3 54.8 72.6 76.6 4.2 Operating income 27.4 23.4 29.3 Other income, net (1.7 ) 3.6 (150.9 ) Income before income taxes 25.8 27.0 5.1 Provision for income taxes 5.8 5.3 21.4 Net income 19.9 % 21.7 % 1.1 % EXECUTIVE SUMMARY Revenues for 2022 increased 10% and revenues before reimbursements increased 7% as compared to the prior year.
Income Taxes (In thousands except percentages) Fiscal Years Percent 2021 2020 Change Income taxes $ 24,635 $ 14,384 71.3 % Percentage of total revenues 5.3 % 3.6 % Effective tax rate 19.6 % 14.8 % The increase in our effective tax rate was due to a decrease in the excess tax benefit associated with stock-based awards.
Income Taxes (In thousands except percentages) Fiscal Years Percent 2022 2021 Change Income taxes $ 29,904 $ 24,635 21.4 % Percentage of total revenues 5.8 % 5.3 % Effective tax rate 22.6 % 19.6 % The increase in our effective tax rate was due to a decrease in the excess tax benefit associated with stock-based awards.
As of December 31, 2021, invested amounts under the plans of $9,380,000 were recorded as a current asset on our consolidated balance sheet. As permitted under Delaware law, we have agreements whereby we indemnify our officers and directors for certain events or occurrences while the officer or director is, or was serving, at our request in such capacity.
As of December 30, 2022, invested amounts under the plans of $11,294,000 were recorded as other current assets on our consolidated balance sheet. As permitted under Delaware law, we have agreements whereby we indemnify our officers and directors for certain events or occurrences while the officer or director is, or was serving, at our request in such capacity.
Excluding the impact of the excess tax benefit, the effective tax rate would have been 27.5% for both 2021 and 2020.
Excluding the impact of the excess tax benefit, the effective tax rate would have been 27.0% and 27.5% for 2022 and 2021, respectively.
See Note 12 of our Notes to Consolidated Financial Statements for additional information regarding our lease obligations. The value of our non-cancellable unconditional purchase obligations was not material at December 31, 2021. We expect to continue our investing activities, including capital expenditures.
As of December 30, 2022, the value of our obligations under operating leases was $18,601,000. See Note 12 of our Notes to Consolidated Financial Statements for additional information regarding our lease obligations. The value of our non-cancellable unconditional purchase obligations was not material at December 30, 2022. We expect to continue our investing activities, including capital expenditures.
Reimbursable Expenses (In thousands except percentages) Fiscal Years Percent 2021 2020 Change Reimbursable expenses $ 31,419 $ 21,488 46.2 % Percentage of total revenues 6.7 % 5.4 % The amount of reimbursable expenses will vary from year to year depending on the nature of our projects.
Reimbursable Expenses (In thousands except percentages) Fiscal Years Percent 2022 2021 Change Reimbursable expenses $ 49,473 $ 31,419 57.5 % Percentage of total revenues 9.6 % 6.7 % The amount of reimbursable expenses will vary from year to year depending on the nature of our projects.
During 2021, deferred compensation expense increased $6,702,000 with a corresponding increase to other income, net, as compared to the prior year due to the change in value of assets associated with our deferred compensation plan.
During 2022, deferred compensation expense decreased $28,917,000 with a corresponding decrease to other income, net, as compared to the prior year due to the change in value of assets associated with our deferred compensation plan.
Technical full-time equivalent employees decreased 1% to 900 for 2021 as compared to 912 for 2020. We continue to selectively hire key talent to expand our capabilities.
Technical full-time equivalent employees increased 6% to 955 for 2022 as compared to 900 for 2021. We continue to selectively hire key talent to expand our capabilities.
Fiscal period 2019 included 53 weeks of activity and ended on January 3, 2020. Fiscal period 2022 is 52 weeks and will end on December 30, 2022. During 2021, billable hours increased 10% to 1,405,000 as compared to 1,273,000 during 2020. Our utilization increased to 75% for 2021 as compared to 67% for 2020.
Fiscal period 2020 included 52 weeks of activity and ended on January 1, 2021. Fiscal period 2023 is 52 weeks and will end on December 29, 2023. During 2022, billable hours increased 4% to 1,465,000 as compared to 1,405,000 during 2021. Our utilization decreased to 74% for 2022 as compared to 75% for 2021.
The increase in corporate operating expenses during 2021 as compared to 2020 was primarily due to an increase in deferred compensation expense. During 2021, deferred compensation expense increased $6,702,000 with a corresponding increase to other income, net, as compared to the prior year due to the change in value of assets associated with our deferred compensation plan.
The decrease in corporate operating expenses during 2022 as compared to 2021 was primarily due to a decrease in deferred compensation expense. During 2022, deferred compensation expense decreased $28,917,000 with a corresponding decrease to other income, net, as compared to 2021 due to the change in value of assets associated with our deferred compensation plan.
Net income was $101,202,000 during 2021 as compared to $82,552,000 during 2020. Diluted earnings per share increased to $1.90 for 2021 as compared to $1.55 for 2020. Net income and diluted earnings per share for 2021 and 2020 benefited from the excess tax benefit associated with stock-based awards.
Diluted earnings per share increased to $1.96 for 2022 as compared to $1.90 for 2021. Net income and diluted earnings per share for 2022 and 2021 benefited from the excess tax benefit associated with stock-based awards. The excess tax benefit associated with stock-based awards decreased to $5,829,000 during 2022 as compared to $10,009,000 during 2021.
FISCAL YEARS ENDED DECEMBER 31, 2021 AND JANUARY 1, 2021 Revenues (In thousands except percentages) Fiscal Years Percent 2021 2020 Change Engineering and Other Scientific $ 380,909 $ 319,346 19.3 % Percentage of total revenues 81.7 % 79.9 % Environmental and Health 85,360 80,554 6.0 % Percentage of total revenues 18.3 % 20.1 % Total revenues $ 466,269 $ 399,900 16.6 % The increase in revenues for our Engineering and Other Scientific segment was due to an increase in billable hours and an increase in billing rates.
FISCAL YEARS ENDED December 30, 2022 AND December 31, 2021 Revenues (In thousands except percentages) Fiscal Years Percent 2022 2021 Change Engineering and Other Scientific $ 427,796 $ 380,909 12.3 % Percentage of total revenues 83.3 % 81.7 % Environmental and Health 85,497 85,360 0.2 % Percentage of total revenues 16.7 % 18.3 % Total revenues $ 513,293 $ 466,269 10.1 % The increase in revenues for our Engineering and Other Scientific segment was due to an increase in billable hours and an increase in billing rates.
The increase in revenues from our Environmental and Health segment was due to an increase in billable hours and an increase in billing rates. During 2021, billable hours for this segment increased by 2% to 304,000 as compared to 297,000 during 2020.
The increase in revenues from our Environmental and Health segment was due to an increase in billable hours. Excluding the impact of foreign exchange, revenues for this segment increased 3%. During 2022, billable hours for this segment increased by 3% to 312,000 as compared to 304,000 during 2021.
During 2021, other income, net, increased $6,702,000 with a corresponding increase to deferred compensation expense as compared to the prior year due to the change in value of assets associated with our deferred compensation plan.
During 2022, other income decreased $28,917,000 with a corresponding decrease to deferred compensation expense as compared to 2021 due to the change in value of assets associated with our deferred compensation plan.
Company assets that are earmarked to pay benefits under the plans are held in a rabbi trust and are subject to the claims of our creditors. As of December 31, 2021, invested amounts under the plans of $99,962,000 were recorded as a long-term asset on our consolidated balance sheet.
Company assets that are designated to fund the benefits under the plans are held in a rabbi trust and are subject to the claims of our creditors. As of December 30, 2022, invested amounts under the plans of $89,437,000 were recorded as a non-current asset on our consolidated balance sheet.
The increases in employee relocation, employee relations, and marketing and business development expenses were due to an increase in human capital and business development activities. We expect general and administrative expenses to increase as we selectively add new talent, expand our business development efforts, and pursue staff development initiatives.
The increase in recruiting expenses was due to an increase in technical full-time equivalent employees. The increase in marketing and business development expenses was due to an increase in our business development activities. We expect general and administrative expenses to increase as we selectively add new talent, expand our business development efforts, and pursue staff development initiatives.
Vested amounts due under the plans of $100,999,000 were recorded as a long-term liability on our consolidated balance sheet at December 31, 2021. Vested amounts due under the plans of $9,380,000 were recorded as a current liability on our consolidated balance sheet at December 31, 2021.
Vested amounts due under the plans of $91,183,000 were recorded as a long-term liability on our consolidated balance sheet at December 30, 2022. Vested amounts due under the plans of $10,171,000 were recorded as a current liability on our consolidated balance sheet at December 30, 2022.
LIQUIDITY AND CAPITAL RESOURCES Fiscal Years (In thousands) 2021 2020 Net cash provided by (used in): Operating activities $ 124,568 $ 103,312 Investing activities $ 38,178 $ 5,024 Financing activities $ (62,753 ) $ (88,355 ) We financed our business in 2021 through available cash and cash flows from operating activities.
LIQUIDITY AND CAPITAL RESOURCES Fiscal Years (In thousands) 2022 2021 Net cash provided by (used in): Operating activities $ 93,807 $ 124,568 Investing activities $ (12,043 ) $ 38,178 Financing activities $ (215,977 ) $ (62,753 ) We financed our business in 2022 through available cash and cash flows from operating activities. We invest our excess cash in cash equivalents.
Technical full-time equivalents increased 2% to 212 during 2021 as compared to 208 for 2020 due to our recruiting and retention efforts. Revenues are primarily derived from services provided in response to client requests or events that occur without notice and engagements are generally terminable or subject to postponement or delay at any time by our clients.
Revenues are primarily derived from services provided in response to client requests or events that occur without notice and engagements are generally terminable or subject to postponement or delay at any time by our clients.
The following table is a reconciliation of EBITDA and EBITDAS to the most comparable GAAP measure, net income, for 2021 and 2020: (In thousands) Fiscal Years 2021 2020 Net income $ 101,202 $ 82,552 Add back (subtract): Income taxes 24,635 14,384 Interest income (66 ) (1,705 ) Depreciation and amortization 6,487 6,871 EBITDA 132,258 102,102 Stock-based compensation 19,263 17,278 EBITDAS $ 151,521 $ 119,380 32
The following table is a reconciliation of EBITDA and EBITDAS to the most comparable GAAP measure, net income, for 2022 and 2021: (In thousands) Fiscal Years 2022 2021 Net income $ 102,330 $ 101,202 Add back (subtract): Income taxes 29,904 24,635 Interest income (2,096 ) (66 ) Depreciation and amortization 7,079 6,487 EBITDA 137,217 132,258 Stock-based compensation 20,364 19,263 EBITDAS $ 157,581 $ 151,521
The increase in other operating expenses was primarily due to an increase in information technology related expenses partially offset by a decrease in depreciation expense and a decrease in occupancy expense.
The increase in other operating expenses was primarily due to an increase in occupancy expense of $1,224,000, an increase in depreciation expense of $592,000 and an increase in information technology related expenses of $582,000.
The following table shows EBITDA as a percentage of revenues before reimbursements for 2021 and 2020: (In thousands, except percentages) Fiscal Years 2021 2020 Revenues before reimbursements $ 434,850 $ 378,412 EBITDA $ 132,258 $ 102,102 EBITDA as a % of revenues before reimbursements 30.4 % 27.0 % The increase in EBITDA as a percentage of revenues before reimbursements during 2021 as compared to 2020 was primarily due to the 15% increase in revenues before reimbursements and slower growth in compensation and related expenses and other operating expenses.
The following table shows EBITDA as a percentage of revenues before reimbursements for 2022 and 2021: (In thousands, except percentages) Fiscal Years 2022 2021 Revenues before reimbursements $ 463,820 $ 434,850 EBITDA $ 137,217 $ 132,258 EBITDA as a % of revenues before reimbursements 29.6 % 30.4 % The decrease in EBITDA as a percentage of revenues before reimbursements during 2022 as compared to 2021 was primarily due to the decrease in utilization and an increase in other operating and general and administrative expenses.
Operating Income (In thousands except percentages) Fiscal Years Percent 2021 2020 Change Engineering and Other Scientific $ 140,400 $ 100,616 39.5 % Environmental and Health 27,952 26,728 4.6 % Total segment operating income 168,352 127,344 32.2 % Corporate operating expense (59,425 ) (44,095 ) 34.8 % Total operating income $ 108,927 $ 83,249 30.8 % The increase in operating income for our Engineering and Other Scientific segment during 2021 as compared to 2020 was due to an increase in revenues driven by an increase in the utilization.
Operating Income (In thousands except percentages) Fiscal Years Percent 2022 2021 Change Engineering and Other Scientific $ 152,679 $ 140,400 8.7 % Environmental and Health 27,340 27,952 (2.2 )% Total segment operating income 180,019 168,352 6.9 % Corporate operating expense (39,177 ) (59,425 ) (34.1 )% Total operating income $ 140,842 $ 108,927 29.3 % The increase in operating income for our Engineering and Other Scientific segment during 2022 as compared to 2021 was due to an increase in revenues partially offset by an increase in expenses.
First quarter operating cash requirements are generally higher due to payment of our annual bonuses accrued during the prior year. 30 Our largest source of operating cash flows is cash collections from our clients. Our primary uses of cash from operating activities are for employee-related expenditures, leased facilities, taxes, and general operating expenses.
Generally, our net cash provided by operating activities is used to fund our day-to-day operating activities. First quarter operating cash requirements are generally higher due to payment of our annual bonuses accrued during the prior year. Our largest source of operating cash flows is cash collections from our clients.
This increase consisted of an increase in the value of the plan assets of $14,730,000 during 2021 as compared to an increase in the value of the plan assets of $8,028,000 during 2020. Wages increased $3,280,000 during 2021 due to the impact of our annual salary increase.
This decrease consisted of a decrease in the value of the plan assets of $14,187,000 during 2022 as compared to an increase in the value of the plan assets of $14,730,000 during 2021. Wages increased $10,376,000 and fringe benefits increased $1,875,000 during 2022 due to the impact of our annual salary increase and increase in number of employees.
We expect other operating expenses to grow as we selectively add new talent, make additional investments in our corporate infrastructure, and transition our workforce back to our offices as COVID-19 pandemic-related business restrictions are lifted.
We expect other operating expenses to grow as we selectively add new talent and continue to make investments in our corporate infrastructure.
We believe our existing balances of cash, cash equivalents and short-term investments will be sufficient to satisfy our working capital needs, capital expenditures, outstanding commitments, stock repurchases, dividends and other liquidity requirements over at least the next 12 months. Generally, our net cash provided by operating activities is used to fund our day-to-day operating activities.
As of December 30, 2022, our cash and cash equivalents were $161,458,000 as compared to $297,687,000 at December 31, 2021. We believe our existing balances of cash and cash equivalents will be sufficient to satisfy our working capital needs, capital expenditures, outstanding commitments, stock repurchases, dividends and other liquidity requirements over at least the next 12 months.
As a result, backlog at any particular time is small in relation to our quarterly or annual revenues and is not a reliable indicator of revenues for any future periods. 27 Compensation and Related Expenses (In thousands except percentages) Fiscal Years Percent 2021 2020 Change Compensation and related expenses $ 278,047 $ 250,041 11.2 % Percentage of total revenues 59.6 % 62.5 % The increase in compensation and related expenses during 2021 was due to an increase in bonus expense, a change in the value of assets associated with our deferred compensation plan, an increase in wages, and an increase in fringe benefits.
Compensation and Related Expenses (In thousands except percentages) Fiscal Years Percent 2022 2021 Change Compensation and related expenses $ 264,235 $ 278,047 (5.0 )% Percentage of total revenues 51.5 % 59.6 % 27 The decrease in compensation and related expenses during 2022 was due to a change in the value of assets associated with our deferred compensation plan partly offset by an increase in wages and fringe benefits and an increase in bonus expense.
Corporate operating expenses also increased due to increases in costs associated with our human resources, finance, information technology, and business development groups as we continue to make investments in these areas to support our growth. 29 Other Income (In thousands except percentages) Fiscal Years Percent 2021 2020 Change Other income $ 16,910 $ 13,687 23.5 % Percentage of total revenues 3.6 % 3.4 % Other income consists primarily of interest income earned on available cash, cash equivalents and short-term investments, changes in the value of assets associated with our deferred compensation plan and rental income from leasing excess space in our Silicon Valley facility.
Other Income (In thousands except percentages) Fiscal Years Percent 2022 2021 Change Other income $ (8,608 ) $ 16,910 (150.9 )% Percentage of total revenues (1.7 )% 3.6 % Other income consists primarily of interest income earned on available cash, cash equivalents and short-term investments, changes in the value of assets associated with our deferred compensation plan and rental income from leasing excess space in our Silicon Valley facility.
We expect our compensation expense, excluding the change in value of deferred compensation plan assets, to increase as we selectively add new talent and adjust compensation to market conditions.
During 2022, bonus expense increased by $1,873,000 due to a corresponding increase in the bonus pool, which is 33% of income before income taxes, interest income, bonus expense, and stock-based compensation. We expect our compensation expense, excluding the change in value of deferred compensation plan assets, to increase as we selectively add new talent and adjust compensation to market conditions.
Utilization for this segment increased to 77% for 2021 as compared to 67% during 2020 due to increased workflow and a 2% decrease in technical full-time equivalent employees. Growth during 2021 was broad-based, with continued strong demand for our services across the utilities, consumer electronics, consumer products, life sciences, and automotive sectors.
During 2022, billable hours for this segment increased by 5% to 1,153,000 as compared to 1,101,000 during 2021. Utilization for this segment decreased to 75% for 2022 as compared to 77% for 2021. Growth during 2022 was broad-based, with continued strong demand for our services across the consumer products, life sciences, and automotive sectors.
Growth was also driven by our proactive safety-related work evaluating the impacts of chemicals on human health and the environment. Society is raising the bar for safety, health, sustainability and reliability, and clients are increasingly seeking our interdisciplinary proactive solutions. As our suite of offerings and key markets expands, so does the demand for our multidisciplinary services.
We increased headcount in key areas of the business where we have identified the greatest need and opportunity. Society is raising the bar for safety, health, sustainability and reliability, and clients are increasingly seeking our interdisciplinary proactive solutions. As our suite of offerings and key markets expand, so does the demand for our multidisciplinary services.
General and Administrative Expenses (In thousands except percentages) Fiscal Years Percent 2021 2020 Change General and administrative expenses $ 15,282 $ 12,888 18.6 % Percentage of total revenues 3.3 % 3.2 % 28 The increase in general and administrative expenses during 2021 was primarily due to an increase in outside consulting services of $425,000, an increase in liability insurance premiums of $366,000, an increase in legal fees of $349,000, an increase in charitable contributions of $201,000, an increase in employee relocation of $190,000, an increase in employee relations of $173,000, an increase marketing and business development expenses of $165,000, and several other individually insignificant increases.
General and Administrative Expenses (In thousands except percentages) Fiscal Years Percent 2022 2021 Change General and administrative expenses $ 23,660 $ 15,282 54.8 % Percentage of total revenues 4.6 % 3.3 % 28 The increase in general and administrative expenses during 2022 was primarily due to an increase in travel and meals of $4,935,000, an increase in outside consulting expenses of $1,157,000, an increase in recruiting expenses of $817,000, an increase in marketing and business development expenses of $442,000 and several other individually insignificant increases.
Growth in this segment, which saw less impact from business restrictions in 2020, was primarily driven by our proactive safety-related work evaluating the impacts on chemicals on human health and the environment. Utilization for this segment was 69% for both 2021 and 2020.
Growth in this segment was primarily driven by our proactive safety-related work evaluating the impacts on chemicals on human health and the environment. Utilization for this segment was 69% for both 2022 and 2021. Technical full-time equivalents increased 3% to 219 during 2022 as compared to 212 for 2021 due to our recruiting and retention efforts.
We also remain focused on capitalizing on emerging growth areas, managing other operating expenses, generating cash from operations, maintaining a strong balance sheet and undertaking activities such as share repurchases and dividends to enhance shareholder value.
We also remain focused on capitalizing on emerging growth areas, managing other operating expenses, generating cash from operations, maintaining a strong balance sheet and undertaking activities such as share repurchases and dividends to enhance shareholder value. 26 OVERVIEW OF THE YEAR ENDED December 30, 2022 Our revenues consist of professional fees earned on consulting engagements, fees for use of our equipment and facilities, and reimbursements for outside direct expenses associated with the services performed that are billed to our clients.
During 2021, other income, net, decreased by $1,109,000 as compared to 2020 due to a change in the realized gain/loss on foreign exchange. This decrease consisted of a realized loss on foreign exchange of $517,000 during 2021 as compared to a realized gain on foreign exchange of $592,000 during 2020.
During 2022, other income increased $1,039,000 as compared to 2021 primarily due to realized gain and losses on foreign exchange. This increase consisted of a realized gain on foreign exchange of $522,000 during 2022 as compared to a realized loss on foreign exchange of $517,000 during 2021. During 2022, rental income increased $281,000 as compared to 2021.
Growth during 2021 was broad-based, with continued strong demand for our services across the utilities, consumer electronics, consumer products, life sciences, and automotive sectors. In addition to the steady increase in litigation support and human participant studies, our multidisciplinary battery team continued to see demand for its solutions in electric vehicles and energy storage.
In addition to the steady increase in litigation support and human participant studies, our multidisciplinary battery team continued to see demand for its solutions in electric vehicles and energy storage. The decrease in operating income for our Environmental and Health segment during 2022 as compared to 2021 was due to investments in recruiting and marketing in our Health Practice.
This increase consisted of an increase in the value of the plan assets of $14,730,000 during 2021 as compared to an increase in the value of the plan assets of $8,028,000 during 2020. During 2020 we claimed an employee retention credit for $2,230,000 under the CARES Act.
This decrease consisted of a decrease in the value of the plan assets of $14,187,000 during 2022 as compared to an increase in the value of the plan assets of $14,730,000 during 2021.
This increase consisted of an increase in the value of the plan assets of $14,730,000 during 2021 as compared to an increase in the value of the plan assets of $8,028,000 during 2020. During 2021 interest income decreased by $1,639,000 due to lower interest rates for our cash equivalents and short-term investments.
This decrease consisted of a decrease in the value of the plan assets of $14,187,000 during 2022 as compared to an increase in the value of the plan assets of $14,730,000 during 2021. During 2022, interest income increased by $2,030,000 due to higher interest rates.
Net cash provided by operating activities was $124.6 million for 2021 as compared to $103.3 million in 2020. During 2021 and 2020, net cash provided by investing activities was primarily related to the purchase and maturity of short-term investments and capital expenditures.
The increase in net cash used in investing activities during 2022, as compared to the net cash provided by investing activities during 2021, was due to a decrease in the maturity of short-term investments partially offset by a decrease in the purchase of short-term investments and an increase in capital expenditures due to an increase in investment in our corporate infrastructure.
The decrease in the excess tax benefit was due to a smaller increase in value of our common stock between the grant date and the release date for the restricted stock units released during 2021 as compared to 2020. 26 We remain focused on selectively adding top talent and developing the skills necessary to expand upon our market position, providing clients with in-depth scientific research and analysis to determine what happened and how to prevent failures or exposures in the future.
The decrease in the excess tax benefit was due to a smaller increase in value of our common stock between the grant date and the release date for the restricted stock units released during 2022 as compared to 2021.
In addition to the steady increase in litigation support and human participant studies, our multidisciplinary battery team continued to see demand for its solutions in electric vehicles and energy storage. Our work in international arbitrations and integrity management advisory services continued at strong levels.
In addition to the steady increase in litigation support and human participant studies, our multidisciplinary battery team continued to see demand for its solutions in electric vehicles and energy storage. Technical full-time equivalent employees in this segment increased 7% to 736 during 2022 as compared to 688 for 2021 due to our recruiting and retention efforts.
Over the last year we further evolved our capabilities, ensuring we can support our clients as they seek to deliver safer, healthier, and more sustainable products and services. Growth during 2021 was broad-based, with continued strong demand for our services across the utilities, consumer electronics, consumer products, life sciences and automotive sectors.
The increase in revenues was due to an increase in billable hours and an increase in billing rates. Growth during 2022 was broad-based with continued strong demand for Exponent's services across the consumer products, electronics, life sciences and automotive sectors.
The increase in revenues before reimbursements was due to an increase in billable hours and an increase in billing rates. Our multi-disciplinary team of engineers and scientists continues to deliver unique and innovative solutions as we broaden our client base and deepen our relationships.
The increase in revenues was due to an increase in billable hours and an increase in billing rates. Our multidisciplinary team of top-tier scientists and engineers continues to provide critical data, analyses and insights for our clients as society raises expectations for safety, health and the environment.
The increase in outside consulting during 2021 was due to the completion of several projects associated with investments in our corporate infrastructure. There was a lower level of activity during 2020 in outside consulting due to the COVID-19 pandemic. The increase in liability insurance premiums was due to pricing increases associated with our annual insurance renewal.
The increase in travel and meals was due to a firm-wide managers' meeting held during 2022 and the continued easing of COVID-19 pandemic-related business and travel restrictions. The increase in outside consulting expenses during 2022 was due to costs associated with investments in our corporate infrastructure and technology platforms.
Removed
The increase in revenues before reimbursements was due to an increase in billable hours and an increase in billing rates. Our multi-disciplinary team of engineers and scientists continues to deliver unique and innovat iv e solutions as we broaden our client base and deepen our relationships.
Added
Demand for our proactive services remained strong across the consumer products, electronics, automotive and life sciences sectors. Our reactive engagements were driven by robust litigation-related activity and a diversified portfolio of product safety- and recall-related work spanning multiple industries. We are seeing our accelerated recruitment efforts materialize as we continue to attract a strong pipeline of high-quality talent.
Removed
Among our proactive services, demand for human factors and machine learning studies was strong throughout 2021 and is expected to continue as clients seek data to improve user experience and advance product performance. At the same time, within our reactive services, litigation related work continues to recover as courts further adapt operating procedures to the COVID-19 environment .
Added
We continue to expand our client relationships and enhance our reputation and capabilities across the firm. As innovation and technology become increasingly complex, the critical nature of our insights uniquely positions Exponent to address our clients’ needs throughout the product lifecycle. Net income was $102,330,000 during 2022 as compared to $101,202,000 during 2021.
Removed
At the onset of the COVID-19 pandemic, we acted swiftly in the face of uncertainty to align our business to protect profitability, but as demand for our services increased, we accelerated our recruiting efforts. While the job market for engineering and scientific talent remains highly competitive, we persist in our ability to attract world-class talent.
Added
We remain focused on building our world-class engineering and scientific team to position Exponent at the forefront of innovation and meet the ever-changing needs of our clients and the market.
Removed
The excess tax benefit associated with stock-based awards decreased to $10,009,000 during 2021 as compared to $12,258,000 during 2020.
Added
As a result, backlog at any particular time is small in relation to our quarterly or annual revenues and is not a reliable indicator of revenues for any future periods.
Removed
OVERVIEW OF THE YEAR ENDED DECEMBER 31, 2021 Our revenues consist of professional fees earned on consulting engagements, fees for use of our equipment and facilities, and reimbursements for outside direct expenses associated with the services performed that are billed to our clients.
Added
The increase in occupancy expenses was due to growth in technical full-time equivalent employees and the transition back to our offices from a fully remote work environment. The increase in information technology related expenses were due to continued investment in our corporate infrastructure.
Removed
During 2021, billable hours for this segment increased by 13% to 1,101,000 as compared to 976,000 during 2020. Utilization for this segment increased to 77% for 2021 as compared to 67% for 2020 due to increased workflow and a decrease in technical full-time equivalent employees.
Added
The impact of foreign exchange rates also contributed to the decrease in operating income for this segment. Certain operating expenses are excluded from the Company’s measure of segment operating income.
Removed
Our work in international arbitrations and integrity management advisory services continued at strong levels. Technical full-time equivalent employees in this segment decreased 2% to 688 during 2021 as compared to 704 for 2020. The decrease in technical full-time equivalent employees was due in part to the divestiture of our German subsidiary in April of 2020.
Added
This decrease in corporate operating expenses is partially offset by an increase in costs associated with our human resources, finance, legal, information technology, and business development groups as we continue to make investments in these areas to support our growth.
Removed
During 2021, bonus expense increased by $15,186,000 due to a corresponding increase in the bonus pool, which is 33% of income before income taxes, interest income, bonus expense, and stock-based compensation.
Added
Our primary uses of cash from operating activities are for employee-related expenditures, leased facilities, taxes, and general operating expenses.
Removed
Fringe benefits increased $2,708,000 during 2021 due to an employee retention credit that we claimed under the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) for $2,230,000 during 2020. There was no CARES Act credit claimed during 2021.
Added
Our utilization decreased to 74% during 2022 as compared to 75% during the same period last year.
Removed
The increase in legal fees was primarily due to compliance costs associated with our international operations. The increase in charitable contributions was due to a gift of $250,000 to the Georgia Tech Foundation for the newly established Exponent Dean’s Scholarship Endowment in the College of Engineering.
Added
Other operating and general and administrative expenses increased during 2022 due to an increase in travel and meals associated with 31 a firm-wide managers' meeting held during 2022 and the continued easing of COVID-19 pandemic-related business and travel restrictions, an increase in technical full-time equivalent employees, investments in our corporate infrastructure, and an increase in marketing and business development activities.
Removed
The increase in operating income for our Environmental and Health segment during 2021 as compared to 2020 was due to an increase in revenues. The increase in revenues was due to an increase in billable hours and an increase in billing rates.
Removed
Growth in this segment, which saw less impact from business restrictions in 2020, was primarily driven by our proactive safety-related work evaluating the impacts on chemicals on human health and the environment. Certain operating expenses are excluded from the Company’s measure of segment operating income.
Removed
This credit was excluded from fringe benefits in our measure of segment operating income. There was no CARES Act credit claimed during 2021.
Removed
During 2021, rental income decreased $692,000 as compared to 2020 due to an increase in our vacancy rate.
Removed
We invest our excess cash in cash equivalents and short-term investments. As of December 31, 2021, our cash and cash equivalents were $297,687,000 as compared to $242,526,000 at January 1, 2021.
Removed
The decrease in net cash used in financing activities during 2021 as compared to 2020 was due to a decrease in repurchases of our common stock and a decrease in the proceeds from the exercise of stock-based payment awards partially offset by an increase in our quarterly dividend payment.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeAt December 31, 2021, we had net assets of approximately $12.6 million with a functional currency of the British Pound, net assets of approximately $6.4 million with a functional currency of the Chinese Yuan, and net assets of approximately $7.8 million with a functional currency of the Hong Kong Dollar associated with our operations in the United Kingdom, China, and Hong Kong respectively.
Biggest changeAt December 30, 2022, we had net assets of approximately $10.7 million with a functional currency of the British Pound, net assets of approximately $1.8 million with a functional currency of the Chinese Yuan, and net assets of approximately $1.1 million with a functional currency of the Hong Kong Dollar associated with our operations in the United Kingdom, China, and Hong Kong respectively.
Item 7A. Quantitative and Qualitative Disclosure about Market Risk Exponent is exposed to interest rate risk associated with our balances of cash and cash equivalents. We manage our interest rate risk by maintaining an investment portfolio primarily consisting of debt instruments with high credit quality and relatively short average effective maturities in accordance with the Company’s investment policy.
Item 7A. Quantitative and Qualitat ive Disclosure about Market Risk Exponent is exposed to interest rate risk associated with our balances of cash and cash equivalents. We manage our interest rate risk by maintaining an investment portfolio primarily consisting of debt instruments with high credit quality and relatively short average effective maturities in accordance with the Company’s investment policy.
However, our continued international expansion increases our exposure to exchange rate fluctuations and as a result such fluctuations could have a significant impact on our future results of operations. 33 Item 8. Financial Statements and Supplementary Data See Item 15 of this Annual Report on Form 10-K for required financial statements and supplementary data. Item 9.
However, our continued international expansion increases our exposure to exchange rate fluctuations and as a result such fluctuations could have a significant impact on our future results of operations. 32 Item 8. Financial Statemen ts and Supplementary Data See Item 15 of this Annual Report on Form 10-K for required financial statements and supplementary data. Item 9.
At December 31, 2021, we had net assets denominated in the non-functional currency of approximately $5.8 million. We do not use foreign exchange contracts to hedge any foreign currency exposures. To date, the impacts of foreign currency exchange rate changes on our consolidated revenues and consolidated net income have not been material.
At December 30, 2022, we had net assets denominated in the non-functional currency of approximately $3.9 million. We do not use foreign exchange contracts to hedge any foreign currency exposures. To date, the impacts of foreign currency exchange rate changes on our consolidated revenues and consolidated net income have not been material.
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None.
Changes in and Disagreements with Acco untants on Accounting and Financial Disclosure None.

Other EXPO 10-K year-over-year comparisons