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What changed in EXPONENT INC's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of EXPONENT INC's 2023 and 2024 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 2024 report.

+174 added−164 removedSource: 10-K (2024-02-23) vs 10-K (2023-02-24)

Top changes in EXPONENT INC's 2024 10-K

174 paragraphs added · 164 removed · 137 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

50 edited+12 added−9 removed80 unchanged
Biggest changeJames was employed as a Research Engineer, Materials Performance Division, at the Babcock and Wilcox R&D Center. Harri K. Kytomaa, Ph.D., joined the Company in 1994. He was promoted to Principal Engineer in 1999 and was appointed Corporate Vice President in 2006. Dr. Kytomaa was appointed Group Vice President in October 2016. Dr. Kytomaa received his Ph.D.
Biggest changeHe is a licensed professional engineer 13 in the states of California and Texas. Prior to joining Exponent, Dr. James was employed as a Research Engineer, Materials Performance Division, at the Babcock and Wilcox R&D Center. John D. Pye, Ph.D., joined the Company in 1999.
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.
In response to competitive forces in the marketplace, we continue to look for new markets for our various technical disciplines. HUMAN CAPITAL Exponent is a global engineering and scientific consulting firm that partners with clients to deliver breakthrough insights and answers.
In addition, we provided many specialist assessments relating to human and environmental exposure and product efficacy as well as national and international Maximum Residue Limit/import tolerance submissions covering countries such as South Korea, Taiwan and Hong Kong.
In addition, we provided many specialist assessments relating to human and environmental exposure, risk and product efficacy as well as national and international Maximum Residue Limit/import tolerance submissions covering countries such as South Korea, Taiwan and Hong Kong.
In each of our practices, we believe that the principal competitive factors are: technical capability and breadth of services, ability to deliver services on a timely basis, professional reputation and knowledge of litigation and regulatory processes.
In each of our practices, we believe that the principal competitive factors are: technical capability and breadth of services, ability to deliver services on a timely basis, professional reputation and knowledge of litigation and 11 regulatory processes.
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.
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 ranges from consulting on our clients’ research to providing turnkey research solutions.
The European and U.S. sides of the practice were jointly involved with ongoing support of multiple new pesticide active ingredients and end-use products. The European side of our business was involved with many projects related to plant protection and biocidal product regulatory submissions, from new active substances and those under review to product-specific dossiers for European member states.
The European and U.S. sides of the practice were jointly involved with ongoing support of several new pesticide active ingredients and end-use products. The European side of our business was involved with many projects related to plant protection and biocidal product regulatory submissions, from new active substances and those under review to product-specific dossiers for European member states.
To enable a culture where diversity, equity, and inclusion are embedded we have articulated four pillars of actions. These include communication, development, outreach, and recruiting. Communication - Our annual employee survey and Diversity, Equity & Inclusion Advisory Committee help increase transparency and ensure a two-way dialogue between employees and leadership. Development - We foster equitable opportunities via our development pathways.
To enable a culture where diversity, equity, and inclusion are embedded we have articulated four pillars of actions: communication, development, outreach, and recruiting. Communication - Our annual employee survey and Diversity, Equity & Inclusion Advisory Committee help increase transparency and ensure a two-way dialogue between employees and leadership. Development - We foster equitable opportunities via our development pathways.
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, 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.
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
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. 14
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).
The U.S. side of our business was also involved in many projects related to agrochemical, antimicrobial, emerging technologies and biochemical product regulatory submissions in the U.S., Canada and Mexico. These included new active ingredients, end-use products, emerging technologies and import tolerances (EPA and FDA). Our state registration business remained solid in the U.S.
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.
Our work in fire detection and protection related issues has remained robust, and our work in consumer product recall and international arbitration has also grown. Vehicle Engineering We have performed thousands of investigations for the automotive, trucking, recreational vehicle, marine, aerospace, and rail industries.
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.
Construction Consulting Our Construction Consulting Practice provides expertise in the areas of project advisory, risk analysis, strategic planning, dispute resolution, delay analysis and assessment of financial damages. We have continued to expand the practice by leveraging key client relationships in several industry sectors including utilities, data centers, infrastructure, and oil and gas.
This has included new technologies in plant protection that meet the regulatory pressures to achieve greater sustainability. We have provided support for reviews of a large number of biocidal products through European regulatory review.
This has included new technologies in plant protection that meet the regulatory pressures to achieve greater sustainability. We have provided support for reviews of a large number of biocidal products through European and South Korean regulatory reviews.
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.
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 experts in dealing with foods, food ingredients, cosmetics, dietary supplements, pesticides and biocides (including conventional chemicals, microbials, antimicrobials/biocides, biopesticides, emerging technologies and products of biotechnology), industrial chemicals, pesticide/biocide devices, consumer products, medical devices and pharmaceuticals.
The practice specializes in assessing the integrated effects of chemical, biological, and physical stressors on aquatic and terrestrial ecosystems. Many of these assessments utilize a causal analysis approach to systematically and transparently determine causation in complex and interrelated situations.
Focusing on both legacy and emerging contaminants, the practice specializes in assessing the integrated effects of chemical, biological, and physical stressors on aquatic and terrestrial ecosystems. Many of these assessments utilize a causal analysis approach to determine causation systematically and transparently in complex and interrelated situations.
We use our knowledge and experience to understand how and why materials, products, and processes may not perform their intended function. Further, we use this knowledge to help our clients prevent future failures of new products as well as aging infrastructure.
We use our knowledge and experience to understand how and why materials, products, and processes may not perform their intended function. Further, we use this knowledge to help our clients minimize the risk for future failures of new products as well as aging infrastructure.
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.
During 2023 technical full-time equivalent employees increased 10% to 1,048 as compared to 955 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 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.
Our projects support many sectors of the construction and engineering industry which include electric and gas utilities, refineries, petrochemical facilities, data centers, building construction, transportation systems, infrastructure, power plants, hospitals, airports, and sporting arenas. Data Sciences The Data Sciences practice comprises our core capabilities in statistics, data analytics, and dedicated data collection.
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.
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 their skills and experience. Our standard rates for professionals range from $200 to $985 per hour.
The practice is comprised of nationally recognized experts that cover disciplines related to the ecological implications and risks associated with these projects. Environmental & Earth Sciences Our environmental scientists and engineers provide cost-effective, scientifically defensible and realistic assessments and solutions to complex environmental issues.
The practice is comprised of nationally and internationally recognized experts that cover disciplines related to the fate and effects of chemical constituents and other stressors, including the ecological implications and risks associated with these projects. Environmental & Earth Sciences Our environmental scientists and engineers provide cost-effective, scientifically defensible and realistic assessments and solutions to complex environmental issues.
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.
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, cosmetic and consumer products.
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.
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. Joseph Rakow, Ph.D., joined the Company in 2005.
Recruiting - We engage graduate students at more than 100 universities, including those in connection with affinity professional organizations. We employ a behavioral, competency-based interviewing process to actively avoid bias. As of December 30, 2022, we employed 1,313 full-time, part time and hourly employees, including 1,007 engineering and scientific staff, 115 technical support staff and 191 administrative and support staff.
Recruiting - We engage graduate students at more than 100 universities, including those in connection with affinity professional organizations. We employ a behavioral, competency-based interviewing process to actively avoid bias. As of December 29, 2023, we employed 1,320 full-time, part-time and intermittent employees, including 1,047 engineering and scientific staff, 73 technical support staff and 200 administrative and support staff.
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.
In the past few years, we have expanded our expertise to include pharmacoepidemiology; the development and application of real-world evidence (RWE) for regulated medical products (pharmaceuticals and biologics, vaccines, devices, and combination products); and 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.
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.
Our Health Sciences team, working closely with Biomechanics, Biomedical Engineering & Sciences, Data Sciences, Human Factors, Polymer 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 the explication of methodological issues such as randomization, bias, data linkages, drug interactions, and identification of high-risk populations.
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.
Our staff includes 955 employees with advanced degrees, of which 746 employees have achieved doctorate degrees. As of December 29, 2023 approximately 89% of our employees were located in the United States and 11% were located in other global regions. 12 Technical full-time equivalent employees is a key metric that we use to analyze our revenues.
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.
Shepard 63 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.
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.
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.
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.
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 and gas applications, the plastics supply chain, fire retardancy and flammability, technology 8 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.
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.
He was promoted to Principal Engineer in 2005 and was appointed Corporate Vice President in 2014. 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 was promoted to Group Vice President in January 2015. Dr. Reiss earned his Sc.D. (1994) in Environmental Health from the Harvard University School of Public Health, M.S. (1991) in Environmental Engineering from Northwestern University and B.S. (1989) in Chemical Engineering from the University of California, Santa Barbara. Prior to joining Exponent he was a Vice President with Sciences International.
(1994) in Environmental Health from the Harvard University School of Public Health, M.S. (1991) in Environmental Engineering from Northwestern University and B.S. (1989) in Chemical Engineering from the University of California, Santa Barbara. Prior to joining Exponent he was a Vice President with Sciences International. Dr. Reiss is a Fellow of the Society of Risk Analysis. Maureen T.F.
(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.
(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. Reitman worked for the 3M Company in both research and management roles.
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.
During 2023, we provided services representing approximately 22%, 18%, 17% and 11% of revenues to clients in the consumer products industry, energy and utilities industries, transportation industry and chemical industry, respectively.
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.
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. On February 6, 2024, Dr. Reitman was elected to the National Academy of Engineering. Richard L. Schlenker, Jr., joined the Company in 1990. Mr.
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.
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.
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.
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.
Over the past year, our Materials and Corrosion Engineering Practice helped clients solve critical materials-related issues in the consumer electronics, medical devices, battery systems, chemical processing, transportation, energy, utilities, and aerospace fields, among others.
Over the past year, our Materials and Corrosion Engineering Practice helped clients solve critical materials-related issues in the consumer electronics, medical devices, battery systems, chemical processing, transportation, energy, utilities, and aerospace fields, among others. Our support of dispute resolution in the intellectual property, premises and product liability fields continued to grow supported by our strong position in direct industrial consulting.
For industrial chemicals, we continued to provide full regulatory support for our clients who prepared and submitted registrations and risk assessments. Our European and U.S. offices were active supporting our clients with their E.U. Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH) and U.S. Toxic Substances Control Act regulatory requirements.
Our European and U.S. offices were active in supporting our clients with their E.U. and U.K. Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH) and U.S. Toxic Substances Control Act regulatory requirements.
Reitman, Sc.D. 54 Group Vice President Richard L. Schlenker, Jr. 57 Executive Vice President, Chief Financial Officer and Corporate Secretary Sally B.
Pye, Ph.D. 53 Group Vice President Joseph Rakow, Ph.D. 47 Group Vice President Richard Reiss, Sc.D. 57 Group Vice President Maureen T.F. Reitman, Sc.D. 55 Group Vice President Richard L. Schlenker, Jr. 58 Executive Vice President, Chief Financial Officer and Corporate Secretary Sally B.
Dr. Reiss is a Fellow of the Society of Risk Analysis. Maureen T.F. Reitman, Sc.D., joined the Company in 2002. She was promoted to Principal Engineer in 2006 and was appointed Corporate Vice President in 2014. Dr. Reitman was appointed Group Vice President on January 4, 2020. Dr. Reitman received her Sc.D.
Reitman, Sc.D., joined the Company in 2002. She was promoted to Principal Engineer in 2006 and was appointed Corporate Vice President in 2014. Dr. Reitman was appointed Group Vice President on January 4, 2020. Dr. Reitman received her Sc.D. (1993) in Materials Science and Engineering from the Massachusetts Institute of Technology and her B.S.
Our expertise also includes hydrology and hydrogeology, modeling and monitoring, water quality, water rights and water resources, extreme weather event and climate change risk management, and evaluation of environmental and social risks.
Our consultants specialize in the areas of environmental fate and transport, environmental chemistry and forensics, remediation consulting, environmental engineering and waste management, and natural resources damages assessment. 10 Our expertise also includes hydrology and hydrogeology, modeling and monitoring, water quality, water rights and water resources, extreme weather event and climate change risk management, and evaluation of environmental and social risks.
Over the past year, the practice has been retained on numerous complex international arbitrations in Canada, Asia Pacific, Europe and the Middle East. Our multi-disciplinary staff, which includes engineers, project managers, schedulers, quantity surveyors, and financial specialists, provides these services to both the public and private sectors for clients who represent a diverse mix of corporations, law firms, and agencies.
Our multi-disciplinary staff, which includes engineers, project and program managers, schedulers, quantity surveyors, and cost specialists, provide these services to both the public and private sectors for clients who represent a diverse mix of corporations, law firms, and agencies.
Pye received his Ph.D. (1999) in Aerospace Engineering from Stanford University, M.S. (1993) in Aerospace Engineering from Stanford University, and B.A.Sc. (1992) in Engineering Science from the University of Toronto, Canada. He is a Registered Professional Mechanical Engineer in the State of California. Prior to joining Exponent, Dr.
He was promoted to Principal Engineer in 2006 and was appointed Corporate Vice President in 2009. Dr. Pye was appointed Group Vice President in January 2014. Dr. Pye received his Ph.D. (1999) in Aerospace Engineering from Stanford University, M.S. (1993) in Aerospace Engineering from Stanford University, and B.A.Sc. (1992) in Engineering Science from the University of Toronto, Canada.
We offer technical, regulatory, and litigation support to industries that include oil and gas, mining and minerals, chemicals, forest products, railroads, aerospace, development, and trade associations, and to municipal and governmental clients. Our consultants specialize in the areas of environmental fate and transport, environmental chemistry and forensics, remediation consulting, environmental engineering and waste management, and natural resources damages assessment.
We offer technical, regulatory, and litigation support to industries that include oil and gas, mining and minerals, chemicals, forest products, railroads, aerospace, development, and trade associations, and to municipal and governmental clients.
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.
(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 Orthopedic Biomechanics Laboratory at Beth Israel Hospital and Harvard Medical School. On February 9, 2021, Dr.
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.
The content of our Internet website is not incorporated into and is not part of this Annual Report on Form 10-K.
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.
Information gained from these analyses has allowed us to also assist clients in proactively making their assets and products safer.
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.
We have also developed analytical tools to assist utility clients assess the risk of ignition from their infrastructure. During the past year, we have continued to grow in our work in oil and gas exploration and production, liquefied natural gas and downstream oil & gas.
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.
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. 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.
He is a Registered Professional Electrical Engineer in the State of Oregon and Registered Professional Mechanical Engineer in the State of California. John D. Pye, Ph.D., joined the Company in 1999. He was promoted to Principal Engineer in 2006 and was appointed Corporate Vice President in 2009. Dr. Pye was appointed Group Vice President in January 2014. Dr.
He is a Registered Professional Mechanical Engineer in the State of California. Prior to joining Exponent, Dr.
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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.
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Over the past year, our team of advisors and experts have been retained on numerous complex projects around the world.
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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.
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Our advisors and experts have successfully collaborated with our clients on numerous assignments, from assisting in establishing best-in-class construction and risk management processes and structures, managing a variety of programs and projects, to providing forensic analysis and expert advice in analyzing and resolving project performance, cost and schedule impact claims in both domestic and international arbitration, and private and public litigation matters.
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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.
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Thermal Sciences Our Thermal Sciences Practice provides rapid response expert analysis to investigate failures involving thermo-fluid systems, fires, and explosions in industrial, residential, commercial, and transportation sectors. We have investigated and analyzed thousands of thermal incidents ranging from high loss accidents in the oil and gas sector and major wildland fires, to small insurance claims.
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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.
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Our engineers use advanced computational fluid dynamics, fire, and explosion modeling tools to supplement our analytical, experimental, and field-based activities. Preventive services include process safety hazard analysis for the chemical, oil & gas, and semiconductor industries, fire protection engineering, product development support, risk-based asset management, and dust explosion consulting.
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Doyle served as Senior Vice President and Managing Director, Value and Outcomes Center of Excellence, at Quintiles. From 2007 to 2014 he served as Senior Vice President and Managing Director, Global Market Access, at Quintiles. Dr. Doyle has authored over 200 abstracts and original research articles in a variety of therapeutic areas, with special concentration in oncology.
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Our European and U.S. teams have been working together to help clients navigate and comply with the new FDA MoCRA Cosmetics regulations that took effect in 2023. We also provided proactive and reactive product safety and litigation support. For industrial chemicals, we continued to provide full regulatory support for our clients who prepared and submitted registrations and risk assessments.
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He received Doctor and Master of Public Health degrees in Epidemiology from the Mailman School of Public Health at Columbia University, where he maintains an adjunct faculty position. Brad A. James, Ph.D., joined the Company in 1994. He was promoted to Principal Engineer in 2005 and was appointed Corporate Vice President in 2014. Dr.
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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.
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(1986) in Mechanical Engineering and M.S. (1981) in Mechanical Engineering from the California Institute of Technology, and B.Sc. (1979) in Engineering Science from Durham University, England. He is a Registered Professional Engineer in nine states and a Certified Fire and Explosion Investigator in accordance with the National Association of Fire Investigators National Certification Board. Prior to joining Exponent, Dr.
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EXECUTIVE OFFICERS OF THE REGISTRANT The executive officers of Exponent and their ages as of February 23, 2024 are as follows: Name Age Position Catherine Ford Corrigan, Ph.D. 55 President and Chief Executive Officer Eric Guyer, Ph.D. 47 Group Vice President Brad A. James, Ph.D. 58 Group Vice President John D.
Removed
Kytomaa was Assistant Professor and Associate Professor of Mechanical Engineering at the Massachusetts Institute of Technology, where he was head of the Fluid Mechanics Laboratory. Steven J. Murray, Ph.D., joined the Company in 2001. He was promoted to Principal Engineer in 2008. Dr. Murray was promoted to Corporate Vice President in May 2014 and Group Vice President in January 2015.
Added
Corrigan was elected to the National Academy of Engineering. Eric Guyer, Ph.D., joined the Company in 2005. He was promoted to Principal Engineer in 2011 and was appointed Corporate Vice President in 2019. Dr. Guyer was appointed Group Vice President on April 1, 2023. Dr. Guyer received his Ph.D. (2005) in Materials Science and Engineering and M.S.
Removed
Dr. Murray received his Ph.D. (2000) in Materials Science and Engineering (Electronic Materials Panel) from the Massachusetts Institute of Technology, B.S. (1996) in Materials Science and Mineral Engineering and B.S. (1996) in Mechanical Engineering from the University of California, Berkeley.
Added
(2003) in Materials Science and Engineering from Stanford University, and B.S. (2000) in Chemical Engineering from Iowa State University. Prior to joining Exponent, Dr. Guyer was employed as a Senior Materials Engineer at Lockheed Martin’s Advanced Technology Center. Brad A. James, Ph.D., joined the Company in 1994.
Added
He was promoted to Principal Engineer in 2012 and was appointed Corporate Vice President in 2021. Dr. Rakow was appointed Group Vice President on April 1, 2023. Dr. Rakow received his Ph.D. (2005) in Aerospace Engineering and M.S. (2000) in Aerospace Engineering from the University of Michigan, and B.S. (1999) in Physics from the University of California, Davis.
Added
He is a licensed professional engineer in the state of California and a Fellow of the American Society of Mechanical Engineers. Prior to joining Exponent, Dr. Rakow held teaching and research positions at the University of Michigan and Sandia National Laboratories. As a volunteer, Dr.
Added
Rakow serves on multiple academic advisory boards at the university level, and is a Structures Specialist with FEMA Urban Search & Rescue. Richard Reiss, Sc.D., joined the Company in 2006 as a Principal Scientist. He was promoted to Group Vice President in January 2015. Dr. Reiss earned his Sc.D.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

28 edited+11 added−6 removed64 unchanged
Biggest changeThere 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.
Biggest changeIn addition, an increasing number of U.S. states have enacted U.S. state privacy laws that set forth comprehensive privacy and security obligations regarding the collection and processing of personal data, including such as 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.
Because a high percentage of our expenses, particularly personnel and facilities related expenses, are relatively fixed in advance of any particular quarter, a variation in the timing of the initiation or the completion of our client assignments can cause significant variations in operating results from quarter to quarter. The market price of our common stock may be volatile.
Because a high percentage of our expenses, 20 particularly personnel and facilities related expenses, are relatively fixed in advance of any particular quarter, a variation in the timing of the initiation or the completion of our client assignments can cause significant variations in operating results from quarter to quarter. The market price of our common stock may be volatile.
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 .
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. 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. 16 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. Tort reform can reduce demand for our services. Several of our practices have a significant concentration in litigation support consulting services.
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.
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 executive officers, group vice presidents, and practice/office directors to manage our operations.
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.
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. 18 Failure to comply with domestic and international export laws could adversely affect our business.
We cannot provide any assurance that we can continue to attract sufficient numbers of highly qualified technical and managerial personnel and retain existing employees. We have experienced and expect to continue to experience employee turnover.
We cannot provide 16 any assurance that we can continue to attract sufficient numbers of highly qualified technical and managerial personnel and retain existing employees. We have experienced and expect to continue to experience employee turnover.
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.
In addition, many states, U.S. federal governmental authorities and non-U.S. jurisdictions have adopted, proposed, or are considering adopting 17 or proposing, additional data security and/or data privacy statutes or regulations.
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.
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. Recent global economic volatility and increased cost of capital could impact the ability of our customers to pay for our services.
Negative publicity related to our government contracts, regardless of whether it is accurate, may further damage our business by affecting our ability to compete for new contracts. Governments may terminate, cancel, modify or curtail our contracts at any time prior to their completion.
Negative publicity related to our government contracts, regardless of whether it is accurate, may further damage our business by affecting our ability to compete for new contracts. Clients may terminate, cancel, modify or curtail our contracts at any time prior to their completion.
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.
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, trade sanctions, and increased regulatory scrutiny on operations; armed conflicts and wars, including the Russia-Ukraine war and the conflicts in the Middle East; 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 and China’s data protection and national security laws; 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.
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.
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.
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.
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.
Such breaches could lead to disruptions of our operations and potential unauthorized disclosure of confidential and/or personal information, which could result in legal claims or proceedings. Our systems and data are protected by a comprehensive Information Security program detailed in our Information Security Management System.
Any such breaches could lead to disruptions of our operations and potential unauthorized disclosure of confidential and/or personal information, which could result in legal claims or proceedings, have impacts to our operations, and/or cause harm to our reputation. Our systems and data are protected by a comprehensive Information Security program detailed in our Information Security Management System.
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.
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 geopolitical developments, economic sanctions, natural disasters, pandemics, epidemics, political instability, armed conflicts and wars, including the Russia-Ukraine war and the conflict in the Middle East.
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.
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.
We follow an established investment policy to monitor, manage and limit our exposure to interest rate and credit risk. The policy sets forth credit quality standards and limits our exposure to any one issuer, as well as our maximum exposure to various asset classes. Investments in some financial instruments may pose risks arising from liquidity and credit concerns.
The policy sets forth credit quality standards and limits our exposure to any one issuer, as well as our maximum exposure to various asset classes. Investments in some financial instruments may pose risks arising from liquidity and credit concerns.
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.
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.
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. 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.
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. Proven or unproven allegations against us may damage our professional reputation.
Under our government contracts, the client generally has the right not to exercise options to extend or expand our contracts and may otherwise terminate, cancel, modify or curtail our contracts at its convenience.
Under many of our contracts, including our government contracts, the client generally has the right not to exercise options to extend or expand our contracts and may otherwise terminate, cancel, modify or curtail our contracts at its convenience. Our engagements can therefore terminate suddenly and without advance notice to us.
Government entities reserve the right to audit our contracts and conduct inquiries and investigations of our business practices with respect to government contracts. Findings from an audit may result in fees being refunded to the government or prospective adjustment to previously agreed upon rates that will affect future margins.
Findings from an audit may result in fees being refunded to the government or prospective adjustment to previously agreed upon rates that will affect future margins.
On our balance sheet as of December 30, 2022, we have $8,607,000 of goodwill subject to periodic evaluation for impairment.
Impairment of goodwill may require us to record a significant charge to earnings. On our balance sheet as of December 29, 2023, we have $8,607,000 of goodwill subject to periodic evaluation for impairment.
Although we believe our current investment portfolio has a low risk of impairment, we cannot predict future market conditions or market liquidity and can provide no assurance that our investment portfolio will remain unimpaired. 20 Impairment of goodwill may require us to record a significant charge to earnings.
As of December 29, 2023, we had no impairment charge associated with our investment portfolio relating to such adverse financial 19 market conditions. Although we believe our current investment portfolio has a low risk of impairment, we cannot predict future market conditions or market liquidity and can provide no assurance that our investment portfolio will remain unimpaired.
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.
Competitive pressure could reduce the market acceptance of our services and result in limitations in our ability to implement billing rate increases or maintain billing rates 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.
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.
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. Our business involves the delivery of professional services and is labor-intensive.
Dedicated security, privacy, information governance, and compliance professionals maintain the program with oversight provided by the Board of Directors in conjunction with senior leadership. Our Information Security team conducts risk assessments, performs regular risk reviews, and tracks risks using a documented risk-register process.
Dedicated security, privacy, information governance, and compliance professionals maintain the program with oversight provided by the Board of Directors in conjunction with senior leadership. See Item 1C. for more information about our Cybersecurity Risk Management and Strategy.
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.
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.
We manage, utilize, and store sensitive or confidential client and employee data, including personal data and protected health information.
Laws regarding data protection continue to rapidly evolve, and failure to protect client and employee data may have an adverse effect on our business. We manage, utilize, and store sensitive or confidential client and employee data, including personal data and protected health information.
Removed
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.
Added
Any factors that damage our professional reputation could have a material adverse effect on our business. 15 Our business can be adversely impacted by deregulation or reduced regulatory enforcement.
Removed
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.
Added
Government contracts entail, among other things, the obligation to comply with numerous regulations and requirements that may not otherwise apply to us. Government entities reserve the right to audit our contracts and conduct inquiries and investigations of our business practices with respect to government contracts.
Removed
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.
Added
Furthermore, we are subject to risks to information security posed by external or insider threats, including unauthorized access, manipulation, misuse, or improper disclosure of proprietary, sensitive, or confidential information by employees, contractors, or other insiders.
Removed
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.
Added
These laws and regulations are increasing in complexity and number. As a result of these legal and regulatory requirements we incur and expect to continue to incur significant ongoing costs as part of our efforts to comply with applicable law.
Removed
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.
Added
Our cash equivalent portfolio as of December 29, 2023 consisted primarily of obligations of the U.S. Treasury. We follow an established investment policy to monitor, manage and limit our exposure to interest rate and credit risk.
Removed
As of December 30, 2022, we had no impairment charge associated with our investment portfolio relating to such adverse financial market conditions.
Added
Political changes and trends such as populism, protectionism, economic nationalism and sentiment toward multinational companies, as well as tariffs, export controls, restrictions on outbound investment or other trade barriers, sanctions, currency controls, or changes to tax or other laws or policies, have been and may continue to be disruptive to our business.
Added
These can interfere with our global operating model, client relationships, and competitive position. Further escalation of any specific trade tensions between the U.S. and China, or in global trade conflict more broadly could be harmful to global economic growth or to our business in or with China or other countries. Our quarterly results may vary.
Added
Climate-related events, including the increasing frequency of extreme weather events and their impact on critical infrastructure, have the potential to disrupt our business. 21 Changes in interpretation and application of tax laws could harm our business, revenue, cash flows and financial results. Tax reform remains a legislative priority for the U.S. government and certain legislations have already been enacted.
Added
While there is current uncertainty regarding what changes will eventually be enacted, such new laws may affect our operating results and financial conditions.
Added
On August 16, 2022, the U.S. government enacted the Inflation Reduction Act of 2022 that includes, among other provisions, changes to the U.S. corporate income tax system, including a fifteen percent minimum tax based on “adjusted financial statement income,” and a one percent excise tax on net repurchases of stock after December 31, 2022.
Added
Changes, if any, to the U.S. or non-U.S. taxation of our operations may increase our worldwide effective tax rate, result in additional taxes, or other costs or have other material consequences, which could harm our business, revenue, cash flows and financial results. 22

Item 2. Properties

Properties — owned and leased real estate

1 edited+0 added−0 removed5 unchanged
Biggest changeLegal Proceedings Exponent is not engaged in any material legal proceedings. Item 4. Mine Saf ety Disclosures Not applicable. 23 PART II
Biggest changeLegal Proceedings Exponent is not engaged in any material legal proceedings. Item 4. Mine Saf ety Disclosures Not applicable. 25 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

5 edited+1 added−0 removed1 unchanged
Biggest changeThe 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.
Biggest changeThe following table provides information on the Company’s share repurchases (of Company common stock) for the quarter ended December 29, 2023 (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 September 30 to October 27 44 $ 73.51 44 $ 42,411 October 28 to November 24 54 73.73 54 $ 38,390 November 25 to December 29 - - - $ 38,390 Total 98 73.63 98 $ 38,390 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 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.
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 16, 2024, there were 166 holders of record of our common stock.
The graph assumes that $100 was invested on the last day of 2016. Note that the historic price performance is not necessarily indicative of future price performance. Item 6. (Reserved ) 24
The graph assumes that $100 26 was invested on the last day of 2018. Note that the historic price performance is not necessarily indicative of future price performance. Item 6. (Reserved ) 27
On 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.
On February 22, 2022 the Company’s Board of Directors announced approval of $150,000,000 for the repurchase of the Company’s common stock. On February 1, 2024 the Company's Board of Directors authorized an additional $61,600,000 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 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.
COMPANY STOCK PRICE PERFORMANCE GRAPH This graph compares the Company’s cumulative total stockholder return calculated on a dividend-reinvested basis from 2019 through 2023 with those of the Standard & Poor’s (“S&P”) 500 Index, the S&P MidCap 400 Index, and the S&P SmallCap 600 Index.
Added
The Company does not have a comparable peer group and thus has selected the S&P MidCap 400 Index. In prior years the company used the S&P SmallCap 600 Index. During 2023, the company was added to the S&P MidCap 400 Index. As such the company selected this index for 2023.

Item 7. Management's Discussion & Analysis

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

50 edited+13 added−12 removed21 unchanged
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.
Biggest changeThe decrease in net cash used in financing activities during 2023 as compared to 2022 was primarily due to a decrease in repurchases of our common stock and a reduction in payroll taxes for restricted stock units, partially offset by an increase in our quarterly dividend payment.
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 revenues was due to an increase in billable hours and an increase in billing rates. Our multidisciplinary team of 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 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.
The increase in other income was primarily due to the change in value of assets associated with our deferred compensation plan and a change in the realized gain and loss on foreign exchange partially offset by an increase in interest income and an increase in rental income.
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.
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 2023 and 2022 items and year-to-year comparisons between 2023 and 2022.
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.
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. 29 OVERVIEW OF THE YEAR ENDED December 29, 2023 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.
We believe that the assumptions, judgments and estimates involved in accounting for revenue recognition and estimating the allowance for contract losses and doubtful accounts have a potential impact on our consolidated financial statements, so we consider these to be our critical accounting policies. We discuss below the assumptions, judgments and estimates associated with these policies.
We believe that the assumptions, judgments and estimates involved in accounting for revenue recognition and estimating the allowance for contract losses and doubtful accounts impact on our consolidated financial statements, so we consider these to be our critical accounting policies. We discuss below the assumptions, judgments and estimates associated with these policies.
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.
Discussions of 2022 and year-to-year comparisons between 2022 and 2021 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 30, 2022.
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.
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 in 2023 as compared to restricted stock units released in 2022.
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.
We operate on a 52-53 week fiscal year with each year ending on the Friday closest to December 31 st . Fiscal period 2023 included 52 weeks of activity and ended on December 29, 2023. Fiscal period 2022 included 52 weeks of activity and ended on December 30, 2022.
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.
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. 28 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 2023 2022 2023 v 2022 Revenues 100.0 % 100.0 % 4.6 % Operating expenses: Compensation and related expenses 59.6 51.5 21.1 Other operating expenses 7.7 6.8 18.4 Reimbursable expenses 7.4 9.6 (20.0 ) General and administrative expenses 4.6 4.6 3.3 79.3 72.6 14.2 Operating income 20.7 27.4 (21.0 ) Other income, net 4.6 (1.7 ) 385.5 Income before income taxes 25.3 25.8 2.8 Provision for income taxes 6.6 5.8 18.9 Net income 18.7 % 19.9 % (1.9 )% EXECUTIVE SUMMARY Revenues for 2023 increased 5% and revenues before reimbursements increased 7% as compared to the prior year.
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.
The excess tax benefit associated with stock-based awards decreased to $3,620,000 during 2023 as compared to $5,829,000 during 2022. 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 2023 as compared to 2022.
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.
As of December 29, 2023, invested amounts under the plans of $14,018,000 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.
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 plan assets of $14,315,000 during 2023 as compared to a decrease in the value of plan assets of $14,187,000 during 2022.
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.
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 29, 2023, invested amounts under the plans of $101,169,000 were recorded as a non-current asset on our consolidated balance sheet.
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.
Other Operating Expenses (In thousands except percentages) Fiscal Years Percent 2023 2022 Change Other operating expenses $ 41,541 $ 35,083 18.4 % Percentage of total revenues 7.7 % 6.8 % Other operating expenses include facilities-related costs, technical materials, computer-related expenses and depreciation and amortization of property, equipment and leasehold improvements.
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.
Excluding the impact of the excess tax benefit, the effective tax rate would have been 28.8% and 27.0% for 2023 and 2022, respectively.
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.
During 2023, deferred compensation expense increased $28,502,000 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.
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.
Other Income (In thousands except percentages) Fiscal Years Percent 2023 2022 Change Other income $ 24,574 $ (8,608 ) (385.5 )% Percentage of total revenues 4.6 % (1.7 )% 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 and Natick facilities.
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.
During 2023, other income increased $28,502,000 with a corresponding increase to deferred compensation expense as compared to 2022 due to the change in value of assets associated with our deferred compensation plan.
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.
See Note 12 of our Notes to Consolidated Financial Statements for additional 33 information regarding our lease obligations. The value of our non-cancellable unconditional purchase obligations was not material at December 29, 2023. We expect to continue our investing activities, including capital expenditures.
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.
Reimbursable Expenses (In thousands except percentages) Fiscal Years Percent 2023 2022 Change Reimbursable expenses $ 39,577 $ 49,473 (20.0 )% Percentage of total revenues 7.4 % 9.6 % The amount of reimbursable expenses will vary from year to year depending on the nature of our projects.
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 decrease in utilization was due to the 5% increase in technical full-time equivalent employees. 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.
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.
Income Taxes (In thousands except percentages) Fiscal Years Percent 2023 2022 Change Income taxes $ 35,557 $ 29,904 18.9 % Percentage of total revenues 6.6 % 5.8 % Effective tax rate 26.2 % 22.6 % The increase in our effective tax rate was due to a decrease in the excess tax benefit associated with stock-based awards.
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.
This increase consisted of an increase in the value of the plan assets of $14,315,000 during 2023 as compared to a decrease in the value of the plan assets of $14,187,000 during 2022. Wages increased $21,084,000 and fringe benefits increased $4,888,000 during 2023 due to the impact of our annual salary increase and increase in number of employees.
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.
The following table shows EBITDA as a percentage of revenues before reimbursements for 2023 and 2022: (In thousands, except percentages) Fiscal Years 2023 2022 Revenues before reimbursements $ 497,189 $ 463,820 EBITDA $ 137,662 $ 137,217 EBITDA as a % of revenues before reimbursements 27.7 % 29.6 % The decrease in EBITDA as a percentage of revenues before reimbursements during 2023 as compared to 2022 was primarily due to the decrease in utilization and an increase in other operating expenses.
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.
Fiscal period 2021 included 52 weeks of activity and ended on December 31, 2021. Fiscal period 2024 is 53 weeks and will end on January 3, 2025. During 2023, billable hours increased 2% to 1,495,000 as compared to 1,465,000 during 2022. Our utilization decreased to 69% for 2023 as compared to 74% for 2022.
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.
Compensation and Related Expenses (In thousands except percentages) Fiscal Years Percent 2023 2022 Change Compensation and related expenses $ 319,886 $ 264,235 21.1 % Percentage of total revenues 59.6 % 51.5 % 30 The increase in compensation and related expenses during 2023 was due to a change in the value of assets associated with our deferred compensation plan and an increase in wages and fringe benefits.
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.
Net income was $100,339,000 during 2023 as compared to $102,330,000 during 2022. Diluted earnings per share decreased to $1.94 for 2023 as compared to $1.96 for 2022. Net income and diluted earnings per share for 2023 and 2022 benefited from the excess tax benefit associated with stock-based awards.
We expect other operating expenses to grow as we selectively add new talent and continue to make investments in our corporate infrastructure.
The increases in depreciation and information technology related expenses were due to continued investment in our corporate infrastructure. We expect other operating expenses to grow as we selectively add new talent and continue to make investments in our corporate infrastructure.
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.
FISCAL YEARS ENDED December 29, 2023 AND December 30, 2022 Revenues (In thousands except percentages) Fiscal Years Percent 2023 2022 Change Engineering and Other Scientific $ 446,888 $ 427,796 4.5 % Percentage of total revenues 83.3 % 83.3 % Environmental and Health 89,878 85,497 5.1 % Percentage of total revenues 16.7 % 16.7 % Total revenues $ 536,766 $ 513,293 4.6 % 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.
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.
Vested amounts due under the plans of $103,398,000 were recorded as a long-term liability on our consolidated balance sheet at December 29, 2023. Vested amounts due under the plans of $13,166,000 were recorded as a current liability on our consolidated balance sheet at December 29, 2023.
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.
LIQUIDITY AND CAPITAL RESOURCES Fiscal Years (In thousands) 2023 2022 Net cash provided by (used in): Operating activities $ 127,352 $ 93,807 Investing activities $ (16,356 ) $ (12,043 ) Financing activities $ (86,009 ) $ (215,977 ) We financed our business in 2023 through available cash and cash flows from operating activities.
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 following table is a reconciliation of EBITDA and EBITDAS to the most comparable GAAP measure, net income, for 2023 and 2022: (In thousands) Fiscal Years 2023 2022 Net income $ 100,339 $ 102,330 Add back (subtract): Income taxes 35,557 29,904 Interest income (7,150 ) (2,096 ) Depreciation and amortization 8,916 7,079 EBITDA 137,662 137,217 Stock-based compensation 20,357 20,364 EBITDAS $ 158,019 $ 157,581
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.
Operating Income (In thousands except percentages) Fiscal Years Percent 2023 2022 Change Engineering and Other Scientific $ 153,918 $ 152,679 0.8 % Environmental and Health 28,432 27,340 4.0 % Total segment operating income 182,350 180,019 1.3 % Corporate operating expense (71,028 ) (39,177 ) 81.3 % Total operating income $ 111,322 $ 140,842 (21.0 )% The increase in operating income for our Engineering and Other Scientific segment during 2023 as compared to 2022 was due to an increase in revenues, partially offset by an increase in expenses.
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.
During 2023, deferred compensation expense increased $28,502,000, 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.
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.
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. Our primary uses of cash from operating activities are for employee-related expenditures, leased facilities, taxes, and general operating expenses.
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.
As our suite of offerings and key markets expands, so does the demand for our multidisciplinary services. 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.
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.
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. Generally, our net cash provided by operating activities is used to fund our day-to-day operating activities.
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.
The increase in other operating expenses was primarily due to an increase in occupancy expense of $2,037,000, an increase in depreciation expense of $1,837,000 and an increase in information technology related expenses of $1,715,000. The increase in occupancy expenses was due to growth in technical full-time equivalent employees and the transition back to our offices from a remote work environment.
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.
The decrease in utilization during 2023 was due to an increase in technical full-time equivalent employees. Technical full-time equivalent employees increased 10% to 1,047 for 2023 as compared to 955 for 2022. We continue to selectively hire key talent to expand our capabilities.
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.
General and Administrative Expenses (In thousands except percentages) Fiscal Years Percent 2023 2022 Change General and administrative expenses $ 24,440 $ 23,660 3.3 % Percentage of total revenues 4.6 % 4.6 % 31 The increase in general and administrative expenses during 2023 was primarily due to an increase in travel and meals of $953,000, an increase in bad debt expense of $402,000 and an increase in marketing and business development expenses of $313,000, partially offset by a decrease in outside consulting expenses and other professional services of $736,000.
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.
This increase 32 consisted of an increase in the value of the plan assets of $14,315,000 during 2023 as compared to a decrease in the value of the plan assets of $14,187,000 during 2022. During 2023, other income decreased $781,000 as compared to 2022 due to realized gain and loss on foreign exchange.
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 in this segment during 2023 was primary driven by demand for our services across the transportation and energy sectors. During 2023, billable hours for this segment increased by 3% to 1,188,000 as compared to 1,153,000 during 2022.
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.
This decrease consisted of a realized loss on foreign exchange of $259,000 during 2023 as compared to a realized gain on foreign exchange of $522,000 during 2022. During 2023, interest income increased by $5,054,0000 due to higher interest rates.
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.
The increase in corporate operating expenses during 2023 as compared to 2022 was primarily due to an increase in deferred compensation expense and an increase in the costs associated with our human resources, finance, information technology and business development groups.
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.
The increase in travel and meals was due to the continued easing of COVID-19 pandemic-related business and travel restrictions. The increase in bad debt expense was due to an increase in write-offs. The increase in marketing and business development expenses was due to an increase in our business development activities.
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.
Certain operating expenses are excluded from our measure of segment operating income.
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.
The increase in revenues from our Environmental and Health segment was due to an increase in billing rates offset by a decrease in billable hours. Growth in this segment during 2023 was primarily driven by safety-related work evaluating the impacts of chemicals on human health and the environment.
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 increase in net cash used in investing activities during 2023 as compared to 2022 was due to an increase in capital expenditures primarily due to leasehold improvements associated with our new operating lease for office and lab space in Philadelphia.
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 was due to an increase in billable hours and an increase in billing rates. Growth was driven by demand for our services across the transportation and energy sectors. The increase in expenses was due to an 11% increase in technical full-time equivalent employees and investments in our corporate infrastructure.
Removed
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.
Added
Growth during 2023 was driven by our reactive business, which experienced strong demand for failure investigations and dispute-related work. Demand for our services across the transportation and energy sectors was strong during 2023. Proactive revenues for the consumer electronics sector declined during 2023 due to ongoing industry headwinds and product lifecycle timing.
Removed
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.
Added
The remainder of our proactive portfolio grew during 2023 primarily driven by 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.
Removed
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.
Added
Utilization for this segment decreased to 70% for 2023 as compared to 75% for 2022 due to an increase in technical full-time equivalent employees. Technical full-time equivalent employees in this segment increased 11% to 818 during 2023 as compared to 736 for 2022.
Removed
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.
Added
During 2023, billable hours for this segment decreased by 2% to 307,000 as compared to 312,000 during 2022. Utilization for this segment decreased to 64% for 2023 as compared to 69% for 2022. Technical full-time equivalents increased 5% to 229 during 2023 as compared to 219 for 2022.
Removed
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.
Added
The decrease in reimbursable expenses as compared to 2022 was due to a decrease in proactive projects for the consumer electronics sector.
Removed
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.
Added
The decrease in outside consulting expenses and other professional services was due a reduction in activity associated with developing content for our external website.
Removed
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.
Added
The increase in operating income for our Environmental and Health segment was due to an increase in revenues. The increase in revenues was due to an increase in billing rates, partially offset by a reduction in billable hours. Growth was driven by evolving regulatory requirements which drove safety-related engagements evaluating the impacts of chemicals on human health and the environment.
Removed
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.
Added
During 2023, rental income increased $433,000 as compared to 2022 due to the addition of an additional tenant in our Natick facility and an increase in rent.
Removed
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.
Added
The excess tax benefit associated with stock-based awards decreased to $3,620,000 during 2023 as compared to $5,829,000 during 2022.
Removed
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.
Added
The increase in our effective tax rate, excluding the impact of the excess tax benefit, was primarily due to the re-measurement of our deferred tax assets in connection with relocating one of our offices to a location designated as tax exempt for all state and local taxes and a decrease in our foreign rate benefit.
Removed
Our primary uses of cash from operating activities are for employee-related expenditures, leased facilities, taxes, and general operating expenses.
Added
We invest our excess cash in cash equivalents. As of December 29, 2023, our cash and cash equivalents were $187,150,000 as compared to $161,458,000 at December 30, 2022.
Removed
Our utilization decreased to 74% during 2022 as compared to 75% during the same period last year.
Added
We lease office, laboratory, and storage space in 13 states and the District of Columbia, as well as in China, Germany, Hong Kong, Ireland, Singapore, Switzerland, and the United Kingdom under non-cancellable operating lease arrangements that expire at various dates through 2033. As of December 29, 2023, the value of our obligations under operating leases was $28,261,000.
Added
Our utilization decreased to 69% during 2023 as compared to 74% during 2022. The decrease in utilization was due to a 10% increase in technical full-time equivalent employees and historically strong utilization during 2022. Other operating expenses increased 34 during 2023 due to an increase in technical full-time equivalent employees and investments in our corporate infrastructure.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

3 edited+0 added−0 removed7 unchanged
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.
Biggest changeAt December 29, 2023, we had net assets of approximately $17.2 million with a functional currency of the British Pound, net assets of approximately $2.7 million with a functional currency of the Hong Kong Dollar, net assets of approximately $2.4 million with a functional currency of the Chinese Yuan, and net assets of approximately $2.3 million with a functional currency of the Singapore Dollar associated with our operations in the United Kingdom, Hong Kong, China, and Singapore respectively.
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.
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. 35 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 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.
At December 29, 2023, we had net assets denominated in the non-functional currency of approximately $8.7 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.

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