Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2022 | Oct. 28, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2022 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q3 | |
Entity Registrant Name | EXPONENT, INC. | |
Entity Central Index Key | 0000851520 | |
Current Fiscal Year End Date | --12-30 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Trading Symbol | EXPO | |
Entity Common Stock, Shares Outstanding | 50,638,229 | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Entity Shell Company | false | |
Entity File Number | 0-18655 | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 77-0218904 | |
Entity Address, Address Line One | 149 COMMONWEALTH DRIVE | |
Entity Address, City or Town | MENLO PARK | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 94025 | |
City Area Code | 650 | |
Local Phone Number | 326-9400 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity Interactive Data Current | Yes | |
Title of each class | Common Stock, par value $0.001 per share | |
Name of each exchange on which registered | NASDAQ |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 148,443 | $ 297,687 |
Accounts receivable, net of allowance for contract losses and doubtful accounts of $6,157 and $4,423 at September 30, 2022 and December 31, 2021, respectively | 166,014 | 139,861 |
Prepaid expenses and other current assets | 18,055 | 15,214 |
Total current assets | 332,512 | 452,762 |
Property, equipment and leasehold improvements, net | 64,289 | 59,971 |
Operating lease right-of-use assets | 18,088 | 14,370 |
Goodwill | 8,607 | 8,607 |
Deferred income taxes | 50,501 | 46,546 |
Deferred compensation plan assets | 83,722 | 99,962 |
Other assets | 1,284 | 1,521 |
Total assets | 559,003 | 683,739 |
Current liabilities: | ||
Accounts payable and accrued liabilities | 31,825 | 24,504 |
Accrued payroll and employee benefits | 84,938 | 103,552 |
Deferred revenues | 15,791 | 19,762 |
Operating lease liabilities | 5,363 | 5,164 |
Total current liabilities | 137,917 | 152,982 |
Other liabilities | 2,639 | 2,886 |
Deferred compensation plan liabilities | 85,453 | 100,999 |
Operating lease liabilities | 13,194 | 9,807 |
Total liabilities | 239,203 | 266,674 |
Stockholders’ equity: | ||
Common stock, $0.001 par value; 120,000 shares authorized; 65,707 shares issued at September 30, 2022 and December 31, 2021 | 66 | 66 |
Additional paid-in capital | 298,589 | 281,419 |
Accumulated other comprehensive loss | ||
Foreign currency translation adjustments | (5,136) | (1,983) |
Retained earnings | 518,631 | 478,370 |
Treasury stock, at cost; 14,918 and 13,591 shares held at September 30, 2022 and December 31, 2021, respectively | (492,350) | (340,807) |
Total stockholders’ equity | 319,800 | 417,065 |
Total liabilities and stockholders’ equity | $ 559,003 | $ 683,739 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, net of allowance for contract losses and doubtful accounts | $ 6,157 | $ 4,423 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 120,000,000 | 120,000,000 |
Common stock, shares issued | 65,707,000 | 65,707,000 |
Treasury stock, shares | 14,918,000 | 13,591,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Oct. 01, 2021 | Sep. 30, 2022 | Oct. 01, 2021 | |
Revenues: | ||||
Revenues before reimbursements | $ 115,143 | $ 108,467 | $ 351,231 | $ 330,514 |
Reimbursements | 12,036 | 7,938 | 34,707 | 22,249 |
Revenues | 127,179 | 116,405 | 385,938 | 352,763 |
Operating expenses: | ||||
Compensation and related expenses | 62,779 | 64,138 | 189,982 | 210,491 |
Other operating expenses | 8,822 | 8,017 | 25,742 | 23,848 |
Reimbursable expenses | 12,036 | 7,938 | 34,707 | 22,249 |
General and administrative expenses | 6,729 | 4,193 | 16,700 | 10,626 |
Total operating expenses | 90,366 | 84,286 | 267,131 | 267,214 |
Operating income | 36,813 | 32,119 | 118,807 | 85,549 |
Other income, net: | ||||
Interest income, net | 638 | 13 | 834 | 54 |
Miscellaneous income (expense), net | (3,975) | 257 | (17,926) | 11,579 |
Total other income, net | (3,337) | 270 | (17,092) | 11,633 |
Income before income taxes | 33,476 | 32,389 | 101,715 | 97,182 |
Income taxes | 9,034 | 7,815 | 21,909 | 16,360 |
Net income | $ 24,442 | $ 24,574 | $ 79,806 | $ 80,822 |
Net income per share: | ||||
Basic (in dollars per share) | $ 0.47 | $ 0.47 | $ 1.54 | $ 1.54 |
Diluted (in dollars per share) | $ 0.47 | $ 0.46 | $ 1.52 | $ 1.52 |
Shares used in per share computations: | ||||
Basic (in shares) | 51,492 | 52,618 | 51,934 | 52,597 |
Diluted (in shares) | 52,008 | 53,312 | 52,489 | 53,316 |
Cash dividends declared per common share (in dollars per share) | $ 0.24 | $ 0.20 | $ 0.72 | $ 0.60 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Oct. 01, 2021 | Sep. 30, 2022 | Oct. 01, 2021 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 24,442 | $ 24,574 | $ 79,806 | $ 80,822 |
Other comprehensive income (loss): | ||||
Foreign currency translation adjustments, net of tax | (1,493) | (266) | (3,153) | (55) |
Unrealized losses on available-for-sale investment securities arising during the period, net of tax | 0 | (65) | ||
Comprehensive income | $ 22,949 | $ 24,308 | $ 76,653 | $ 80,702 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Stockholders' Equity - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Retained Earnings [Member] | Treasury Stock [Member] |
Balance at Jan. 01, 2021 | $ 361,498 | $ 66 | $ 265,328 | $ (1,932) | $ 421,809 | $ (323,773) |
Balances (in shares) at Jan. 01, 2021 | 65,707 | 13,903 | ||||
Employee stock purchase plan | 1,023 | 909 | $ 114 | |||
Employee stock purchase plan (in shares) | (12) | |||||
Amortization of unrecognized stock-based compensation | 5,676 | 5,676 | ||||
Purchase of treasury stock | (7,000) | $ (7,000) | ||||
Purchase of treasury stock (in shares) | 79 | |||||
Foreign currency translation adjustments | 211 | 211 | ||||
Grant of restricted stock units to settle accrued bonus | 7,637 | 7,637 | ||||
Settlement of restricted stock units | (15,666) | (3,269) | (1,679) | $ (10,718) | ||
Settlement of restricted stock units (in shares) | (322) | |||||
Unrealized gain on investments | (4) | (65) | 61 | |||
Dividends and dividend equivalent rights | (21,856) | (21,856) | ||||
Net income | 56,248 | 56,248 | ||||
Balance at Jul. 02, 2021 | 387,767 | $ 66 | 276,281 | (1,786) | 454,583 | $ (341,377) |
Balances (in shares) at Jul. 02, 2021 | 65,707 | 13,648 | ||||
Balance at Jan. 01, 2021 | 361,498 | $ 66 | 265,328 | (1,932) | 421,809 | $ (323,773) |
Balances (in shares) at Jan. 01, 2021 | 65,707 | 13,903 | ||||
Net income | 80,822 | |||||
Balance at Oct. 01, 2021 | 404,989 | $ 66 | 279,250 | (2,052) | 468,578 | $ (340,853) |
Balances (in shares) at Oct. 01, 2021 | 65,707 | 13,595 | ||||
Balance at Jul. 02, 2021 | 387,767 | $ 66 | 276,281 | (1,786) | 454,583 | $ (341,377) |
Balances (in shares) at Jul. 02, 2021 | 65,707 | 13,648 | ||||
Employee stock purchase plan | 518 | 471 | $ 47 | |||
Employee stock purchase plan (in shares) | (5) | |||||
Exercise of stock options | 1,135 | 658 | $ 477 | |||
Exercise of stock options (in shares) | (48) | |||||
Amortization of unrecognized stock-based compensation | 1,840 | 1,840 | ||||
Foreign currency translation adjustments | (266) | (266) | ||||
Dividends and dividend equivalent rights | (10,579) | (10,579) | ||||
Net income | 24,574 | 24,574 | ||||
Balance at Oct. 01, 2021 | 404,989 | $ 66 | 279,250 | (2,052) | 468,578 | $ (340,853) |
Balances (in shares) at Oct. 01, 2021 | 65,707 | 13,595 | ||||
Balance at Dec. 31, 2021 | 417,065 | $ 66 | 281,419 | (1,983) | 478,370 | $ (340,807) |
Balances (in shares) at Dec. 31, 2021 | 65,707 | 13,591 | ||||
Employee stock purchase plan | 1,070 | 961 | $ 109 | |||
Employee stock purchase plan (in shares) | (12) | |||||
Amortization of unrecognized stock-based compensation | 5,939 | 5,939 | ||||
Purchase of treasury stock | (111,843) | $ (111,843) | ||||
Purchase of treasury stock (in shares) | 1,273 | |||||
Foreign currency translation adjustments | (1,660) | (1,660) | ||||
Grant of restricted stock units to settle accrued bonus | 10,200 | 10,200 | ||||
Settlement of restricted stock units | (12,904) | (2,421) | (1,392) | $ (9,091) | ||
Settlement of restricted stock units (in shares) | (262) | |||||
Dividends and dividend equivalent rights | (25,737) | (25,737) | ||||
Net income | 55,364 | 55,364 | ||||
Balance at Jul. 01, 2022 | 337,494 | $ 66 | 296,098 | (3,643) | 506,605 | $ (461,632) |
Balances (in shares) at Jul. 01, 2022 | 65,707 | 14,590 | ||||
Balance at Dec. 31, 2021 | 417,065 | $ 66 | 281,419 | (1,983) | 478,370 | $ (340,807) |
Balances (in shares) at Dec. 31, 2021 | 65,707 | 13,591 | ||||
Net income | 79,806 | |||||
Balance at Sep. 30, 2022 | 319,800 | $ 66 | 298,589 | (5,136) | 518,631 | $ (492,350) |
Balances (in shares) at Sep. 30, 2022 | 65,707 | 14,918 | ||||
Balance at Jul. 01, 2022 | 337,494 | $ 66 | 296,098 | (3,643) | 506,605 | $ (461,632) |
Balances (in shares) at Jul. 01, 2022 | 65,707 | 14,590 | ||||
Employee stock purchase plan | 557 | 492 | $ 65 | |||
Employee stock purchase plan (in shares) | (7) | |||||
Amortization of unrecognized stock-based compensation | 1,999 | 1,999 | ||||
Purchase of treasury stock | (30,783) | $ (30,783) | ||||
Purchase of treasury stock (in shares) | 335 | |||||
Foreign currency translation adjustments | (1,493) | (1,493) | ||||
Dividends and dividend equivalent rights | (12,416) | (12,416) | ||||
Net income | 24,442 | 24,442 | ||||
Balance at Sep. 30, 2022 | $ 319,800 | $ 66 | $ 298,589 | $ (5,136) | $ 518,631 | $ (492,350) |
Balances (in shares) at Sep. 30, 2022 | 65,707 | 14,918 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Oct. 01, 2021 | |
Cash flows from operating activities: | ||
Net income | $ 79,806 | $ 80,822 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization of property, equipment and leasehold improvements | 5,224 | 4,943 |
Amortization of premiums and accretion of discounts on short-term investments | (11) | |
Provision for contract losses and doubtful accounts | 2,112 | 1,197 |
Stock-based compensation | 16,072 | 15,239 |
Deferred income tax provision | (3,955) | (2,020) |
Changes in operating assets and liabilities: | ||
Accounts receivable | (28,265) | (33,671) |
Prepaid expenses and other current assets | (7,583) | (4,878) |
Change in operating leases | (132) | (472) |
Accounts payable and accrued liabilities | 5,140 | 5,784 |
Accrued payroll and employee benefits | (11,211) | 3,053 |
Deferred revenues | (3,971) | 392 |
Net cash provided by operating activities | 53,237 | 70,378 |
Cash flows from investing activities: | ||
Capital expenditures | (9,108) | (5,437) |
Purchase of short-term investments | (34,994) | |
Maturity of short-term investments | 55,000 | |
Net cash provided by (used in) investing activities | (9,108) | 14,569 |
Cash flows from financing activities: | ||
Payroll taxes for restricted stock units | (12,904) | (15,666) |
Repurchase of common stock | (142,195) | (7,000) |
Exercise of stock-based payment awards | 1,627 | 2,675 |
Dividends and dividend equivalents rights | (37,084) | (32,775) |
Net cash used in financing activities | (190,556) | (52,766) |
Effect of foreign currency exchange rates on cash and cash equivalents | (2,817) | 79 |
Net decrease in cash and cash equivalents | (149,244) | 32,260 |
Cash and cash equivalents at beginning of period | 297,687 | 197,525 |
Cash and cash equivalents at end of period | $ 148,443 | $ 229,785 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Note 1: Basis of Presentation Exponent, Inc. (referred to as the “Company” or “Exponent”) is an engineering and scientific consulting firm that provides solutions to complex problems. The Company operates on a 52-53 week fiscal year ending on the Friday closest to the last day of December. The accompanying unaudited condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information, the instructions to Form 10-Q and Article 10 of Regulation S-X promulgated by the U.S. Securities and Exchange Commission. Accordingly, they do not contain all the information and notes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, all adjustments which are necessary for the fair presentation of the condensed consolidated financial statements have been included and all such adjustments are of a normal and recurring nature. The operating results for the three and nine months ended September 30, 2022 are not necessarily representative of the results of future quarterly or annual periods. The following information should be read in conjunction with the audited consolidated financial statements and accompanying notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021, which was filed with the U.S. Securities and Exchange Commission on February 25, 2022. The unaudited condensed consolidated financial statements include the accounts of Exponent, Inc. and its subsidiaries, which are all wholly owned. All intercompany accounts and transactions have been eliminated in consolidation. Use of Estimates. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Items subject to such estimates and assumptions include accounting for revenue recognition and estimating the allowance for contract losses and doubtful accounts. Actual results could differ from those estimates. |
Revenue Recognition
Revenue Recognition | 9 Months Ended |
Sep. 30, 2022 | |
Revenue Recognition [Abstract] | |
Revenue Recognition | Note 2: Revenue Recognition Substantially all of the Company’s engagements are performed under time and materials or fixed-price arrangements. For time and materials contracts, the Company utilizes the practical expedient under Accounting Standards Codification 606 – Revenue from Contracts with Customers , which states that if an entity has a right to consideration from a customer in an amount that corresponds directly with the value of the entity’s performance completed to date (for example, a service contract in which an entity bills a fixed amount for each hour of service provided) then the entity may recognize revenue in the amount to which the entity has a right to invoice. The following table discloses the percentage of the Company’s revenue generated from time and materials contracts: Three Months Ended Nine Months Ended September 30, October 1, September 30, October 1, Engineering & Other Scientific 64 % 62 % 63 % 62 % Environmental and Health 14 % 16 % 16 % 17 % Total time and materials revenues 78 % 78 % 79 % 79 % For fixed-price contracts, the Company recognizes revenue over time because of the continuous transfer of control to the customer. The customer typically controls the work in process as evidenced either by contractual termination clauses or by the Company’s rights to payment for work performed to date to deliver services that do not have an alternative use to the Company. Revenue for fixed-price contracts is recognized based on the relationship of incurred labor hours at standard rates to the Company’s estimate of the total labor hours at standard rates it expects to incur over the term of the contract. The Company believes this methodology achieves a reliable measure of the revenue from the consulting services it provides to its customers under fixed-price contracts given the nature of the consulting services the Company provides. The following table discloses the percentage of the Company’s revenue generated from fixed price contracts: Three Months Ended Nine Months Ended September 30, October 1, September 30, October 1, Engineering & Other Scientific 21 % 21 % 20 % 20 % Environmental and Health 1 % 1 % 1 % 1 % Total fixed price revenues 22 % 22 % 21 % 21 % Deferred revenues represent amounts billed to clients in advance of services provided. During the third quarter of 2022, $ 6,343,000 of revenues were recognized that were included in the deferred revenue balance at July 1, 2022. During the first nine months of 2022, $ 14,215,000 of revenues were recognized that were included in the deferred revenue balance at December 31, 2021. Reimbursements, including those related to travel and other out-of-pocket expenses, and other similar third- party costs such as the cost of materials and certain subcontracts, are included in revenues, and an equivalent amount of reimbursable expenses are included in operating expenses. Any mark-up on reimbursable expenses is included in revenues before reimbursements. The Company reports revenues net of subcontractor fees for certain subcontracts where the Company has determined that it is acting as an agent because its performance obligation is to arrange for the provision of goods or services by another party. The total amount of subcontractor fees not included in revenues because the Company was acting as an agent were $ 6,996,000 and $ 1,219,000 during the third quarter of 2022 and 2021, respectively, and $ 18,040,000 and $ 9,923,000 during the nine months of 2022 and 2021, respectively. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Note 3: Fair Value Measurements The Company measures certain financial assets and liabilities at fair value on a recurring basis, including money market securities, trading fixed income and equity securities held in its deferred compensation plan and the liability associated with its deferred compensation plan. There were no transfers between fair value measurement levels during the three and nine months ended September 30, 2022 and October 1, 2021. Any transfers between fair value measurement levels would be recorded on the actual date of the event or change in circumstances that caused the transfer. The fair value of these certain financial assets and liabilities was determined using the following inputs at September 30, 2022: Fair Value Measurements at Reporting Date Using (In thousands) Total Quoted Prices in Significant Other Significant Assets Money market securities (1) $ 51,794 $ 51,794 $ - $ - Fixed income trading securities held in deferred (2) 33,772 33,772 - - Equity trading securities held in deferred compensation (2) 60,807 60,807 - - Total $ 146,373 $ 146,373 $ - $ - Liabilities Deferred compensation plan (3) 94,502 94,502 - - Total $ 94,502 $ 94,502 $ - $ - (1) Included in cash and cash equivalents on the Company’s unaudited condensed consolidated balance sheet. (2) Included in prepaid expenses and other current assets and deferred compensation plan assets on the Company’s unaudited condensed consolidated balance sheet. (3) Included in accrued payroll and employee benefits and deferred compensation plan liabilities on the Company’s unaudited condensed consolidated balance sheet. The fair value of these certain financial assets and liabilities was determined using the following inputs at December 31, 2021: Fair Value Measurements at Reporting Date Using (In thousands) Total Quoted Prices in Significant Other Significant Assets Money market securities (1) $ 101,581 $ 101,581 $ - $ - Fixed income trading securities held in deferred (2) 25,275 25,275 - - Equity trading securities held in deferred compensation (2) 84,067 84,067 - - Total $ 210,923 $ 210,923 $ - $ - Liabilities Deferred compensation plan (3) 110,379 110,379 - - Total $ 110,379 $ 110,379 $ - $ - (1) Included in cash and cash equivalents on the Company’s unaudited condensed consolidated balance sheet. (2) Included in prepaid expenses and other current assets and deferred compensation plan assets on the Company’s unaudited condensed consolidated balance sheet. (3) Included in accrued payroll and employee benefits and deferred compensation plan liabilities on the Company’s unaudited condensed consolidated balance sheet. Money market securities as of September 30, 2022 and December 31, 2021 represent obligations of the United States Treasury. Fixed income and equity trading securities represent mutual funds held in the Company’s deferred compensation plan. See Note 6 for additional information about the Company’s deferred compensation plan. Cash and cash equivalents consisted of the following as of September 30, 2022: Gross Gross Amortized Unrealized Unrealized Estimated (In thousands) Cost Gains Losses Fair Value Classified as current assets: Cash $ 96,649 $ - $ - $ 96,649 Cash equivalents: Money market securities 51,794 - - 51,794 Total cash equivalents 51,794 - - 51,794 Total cash and cash equivalents 148,443 - - 148,443 Cash and cash equivalents consisted of the following as of December 31, 2021: Amortized Unrealized Unrealized Estimated (In thousands) Cost Gains Losses Fair Value Classified as current assets: Cash $ 196,106 $ - $ - $ 196,106 Cash equivalents: Money market securities 101,581 - - 101,581 Total cash equivalents 101,581 - - 101,581 Total cash and cash equivalents $ 297,687 $ - $ - $ 297,687 At September 30, 2022 and December 31, 2021, the Company did not have any assets or liabilities valued using significant unobservable inputs. The following financial instruments are not measured at fair value on the Company's unaudited condensed consolidated balance sheet at September 30, 2022 and December 31, 2021, but require disclosure of their fair values: accounts receivable, other assets and accounts payable. The estimated fair value of such instruments at September 30, 2022 and December 31, 2021 approximates their carrying value as reported on the Company’s unaudited condensed consolidated balance sheet. |
Net Income Per Share
Net Income Per Share | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Net Income Per Share | Note 4: Net Income Per Share Basic per share amounts are computed using the weighted-average number of common shares outstanding during the period. Diluted per share amounts are calculated using the weighted-average number of common shares outstanding during the period and, when dilutive, the weighted-average number of potential common shares from the issuance of common stock to satisfy outstanding restricted stock units and the exercise of outstanding options to purchase common stock using the treasury stock method. The following schedule reconciles the shares used to calculate basic and diluted net income per share: Three Months Ended Nine Months Ended (In thousands) September 30, October 1, September 30, October 1, Shares used in basic per share computation 51,492 52,618 51,934 52,597 Effect of dilutive common stock options 202 245 202 239 Effect of dilutive restricted stock units 314 449 353 480 Shares used in diluted per share 52,008 53,312 52,489 53,316 There were no equity awards excluded from the diluted per share calculation for the three and nine months ended September 30, 2022 and October 1, 2021. |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Note 5: Stock-Based Compensation Restricted Stock Units Restricted stock unit grants are designed to attract and retain employees, and to better align employee interests with those of the Company’s stockholders. For a select group of employees, up to 40 % of their annual bonus is settled with fully vested restricted stock unit awards. Under these fully vested restricted stock unit awards, the holder of each award has the right to receive one share of the Company’s common stock for each fully vested restricted stock unit four years from the date of grant. Each individual who receives a fully vested restricted stock unit award is also granted a matching number of unvested restricted stock unit awards. Unvested restricted stock unit awards are also granted for select new hires and promotions. These unvested restricted stock unit awards generally cliff vest four years from the date of grant, at which time the holder of each award will have the right to receive one share of the Company’s common stock for each restricted stock unit award provided the holder of each award has met certain employment conditions. In the case of retirement at 59½ years or older, all unvested restricted stock unit awards will continue to vest, provided that the holder of each award does all consulting work through the Company and does not become an employee for a past or present client, beneficial party or competitor of the Company. The value of these restricted stock unit awards is determined based on the market price of the Company’s common stock on the date of grant. The value of fully vested restricted stock unit awards issued is recorded as a reduction to accrued bonuses. The portion of bonus expense that the Company expects to settle with fully vested restricted stock unit awards is recorded as stock-based compensation during the period the bonus is earned. The Company recorded stock-based compensation expense associated with accrued bonus awards of $ 2,606,000 and $ 2,525,000 during the three months ended September 30, 2022 and October 1, 2021, respectively. For the nine months ended September 30, 2022 and October 1, 2021, the Company recorded stock-based compensation expense associated with accrued bonus awards of $ 8,133,000 and $ 7,723,000 , respectively. The value of the unvested restricted stock unit awards granted is recognized on a straight-line basis over the shorter of the four-year vesting period or the period between the grant date and the date the award recipient turns 59½. If the award recipient is 59½ years or older on the date of grant, the value of the entire award is expensed upon grant. The Company recorded stock-based compensation expense associated with the unvested restricted stock unit awards of $ 1,787,000 and $ 1,654,000 during the three months ended September 30, 2022 and October 1, 2021, respectively. The Company recorded stock-based compensation expense associated with the unvested restricted stock unit awards of $ 7,315,000 and $ 6,967,000 durin g the nine months ended September 30, 2022 and October 1, 2021, respectively. Stock Options Stock options are granted for terms of ten years and generally vest 25 % per year over a four-year period from the grant date. Unvested stock option awards will continue to vest in the case of retirement at 59½ years or older, provided that the holder of each award does all consulting work through the Company and does not become an employee for a past or present client, beneficial party or competitor of the Company. The value of the unvested stock option awards granted is recognized on a straight-line basis over the shorter of the four-year vesting period or the period between the grant date and the date the award recipient turns 59½ . If the award recipient is 59½ years or older on the date of grant, the value of the entire award is expensed upon grant. The Company recorded stock-based compensation expense associated with stock option grants of $ 212,000 and $ 186,000 during the three months ended September 30, 2022 and October 1, 2021, respectively. The Company recorded stock-based compensation expense associated with stock option grants of $ 623,000 and $ 549,000 during the nine months ended September 30, 2022 and October 1, 2021, respectively. The Company uses the Black-Scholes option-pricing model to determine the fair value of options granted. The determination of the fair value of stock option awards on the date of grant using an option-pricing model is affected by the Company’s stock price as well as assumptions regarding a number of complex and subjective variables. These variables include expected stock price volatility over the term of the award, actual and projected employee stock option exercise behaviors, the risk-free interest rate and expected dividends. The Company used historical exercise, forfeiture, and post-vesting expiration data to estimate the expected term of options granted. The historical volatility of the Company’s common stock over a period of time equal to the expected term of the options granted was used to estimate expected volatility. The risk-free interest rate used in the option-pricing model was based on United States Treasury zero-coupon issues with remaining terms similar to the expected term of the options. The dividend yield assumption considers the expectation of continued declaration of dividends, offset by option holders’ dividend equivalent rights. The Company accounts for forfeitures of stock-based awards when they occur. All stock-based payment awards are recognized on a straight-line basis over the requisite service periods of the awards. |
Deferred Compensation Plans
Deferred Compensation Plans | 9 Months Ended |
Sep. 30, 2022 | |
Deferred Compensation Arrangements [Abstract] | |
Deferred Compensation Plans | Note 6: Deferred Compensation Plans The Company maintains nonqualified deferred compensation plans for the benefit of a select group of highly compensated employees. Under these plans, participants may elect to defer up to 100 % of their compensation. Company assets that are earmarked to pay benefits under the plans are held in a rabbi trust and are subject to the claims of the Company’s creditors. As of September 30, 2022 and December 31, 2021 the invested amounts under the plans totaled $ 94,579,000 and $ 109,342,000 , respectively, and are recorded in prepaid expenses and other current assets and deferred compensation plan assets on the Company’s unaudited condensed consolidated balance sheets. These assets are classified as trading securities and are recorded at fair value with changes recorded as adjustments to miscellaneous income (expense), net. As of September 30, 2022 and December 31, 2021 vested amounts due under the plans totaled $ 94,502,000 and $ 110,379,000 , respectively, and are recorded within accrued payroll and employee benefits and deferred compensation plan liabilities on the Company’s unaudited condensed consolidated balance sheets. Changes in the liability are recorded as adjustments to compensation expense. During the three months ended September 30, 2022, the Company recognized a reduction to compensation expense of $ 4,925,000 as a result of changes in the market value of the trust assets with the same amount being recorded as a loss in miscellaneous income (expense), net. During the three months ended October 1, 2021, the Company recognized a reduction to compensation expense of $ 258,000 as a result of changes in the market value of the trust assets with the same amount being recorded as a loss in miscellaneous income (expense), net. During the nine months ended September 30, 2022, the Company recognized a reduction in compensation expense of $ 20,884,000 as a result of changes in the market value of the trust assets with the same amount being recorded as a loss in miscellaneous income (expense), net. During the nine months ended October 1, 2021, the Company recognized additional compensation expense of $ 9,997,000 as a result of changes in the market value of the trust assets with the same amount being recorded as income in miscellaneous income (expense), net. |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information | 9 Months Ended |
Sep. 30, 2022 | |
Supplemental Cash Flow Information [Abstract] | |
Supplemental Cash Flow Information | Note 7: Supplemental Cash Flow Information The following is supplemental disclosure of cash flow information: Nine Months Ended (In thousands) September 30, October 1, Cash paid during period: Income taxes $ 24,349 $ 16,481 Non-cash investing and financing activities: Unrealized loss on short-term investments $ - $ ( 65 ) Vested stock unit awards issued to settle accrued bonuses $ 10,200 $ 7,637 Accrual for capital expenditures as of period end $ 846 $ 368 Right-of-use asset obtained in exchange for operating lease obligations $ 8,090 $ 792 |
Accounts Receivable, Net
Accounts Receivable, Net | 9 Months Ended |
Sep. 30, 2022 | |
Receivables [Abstract] | |
Accounts Receivable, Net | Note 8: Accounts Receivable, Net At September 30, 2022 and December 31, 2021, accounts receivable, net, was comprised of the following: September 30, December 31, (In thousands) 2022 2021 Billed accounts receivable $ 110,428 $ 102,028 Unbilled accounts receivable 61,743 42,256 Allowance for contract losses and doubtful accounts ( 6,157 ) ( 4,423 ) Total accounts receivable, net $ 166,014 $ 139,861 The Company maintains allowances for estimated losses over the remaining contractual life of its receivables resulting from the inability of customers to meet their financial obligations or for disputes that affect the Company’s ability to fully collect amounts due. In circumstances where the Company is aware of a specific customer’s inability to meet its financial obligations or aware of a dispute with a specific customer, a specific allowance is recorded to reduce the net recognized receivable to the amount the Company reasonably believes will be collected. For all other customers the Company recognizes allowances for doubtful accounts based upon historical write-offs, customer concentration, customer creditworthiness, current economic conditions, aging of amounts due and future expectations. A reconciliation of the beginning and ending amount of the allowance for contract losses and doubtful accounts is as follows (in thousands): Balance at December 31, 2021 $ 4,423 Provision for contract losses and doubtful accounts 2,112 Write-offs ( 378 ) Balance at September 30, 2022 $ 6,157 |
Segment Reporting
Segment Reporting | 9 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
Segment Reporting | Note 9: Segment Reporting The Company has two reportable operating segments based on two primary areas of service. The Engineering and Other Scientific segment is a broad service group providing technical consulting in different practices primarily in engineering. The Environmental and Health segment provides services in the areas of environmental, epidemiology and health risk analysis. This segment provides a wide range of consulting services relating to environmental hazards and risks and the impact on both human health and the environment. Our Chief Executive Officer, the chief operating decision maker, reviews revenues and operating income for each of our reportable segments, but does not review total assets in evaluating segment performance and capital allocation. Segment information for the three and nine months ended September 30, 2022 and October 1, 2021 follows: Revenues Three Months Ended Nine Months Ended (In thousands) September 30, October 1, September 30, October 1, Engineering and Other Scientific $ 107,403 $ 97,100 $ 321,168 $ 288,848 Environmental and Health 19,776 19,305 64,770 63,915 Total revenues $ 127,179 $ 116,405 $ 385,938 $ 352,763 Operating Income Three Months Ended Nine Months Ended (In thousands) September 30, October 1, September 30, October 1, Engineering and Other Scientific $ 39,385 $ 36,676 $ 117,907 $ 108,646 Environmental and Health 6,378 5,851 21,059 21,265 Total segment operating income 45,763 42,527 138,966 129,911 Corporate operating expense ( 8,950 ) ( 10,408 ) ( 20,159 ) ( 44,362 ) Total operating income $ 36,813 $ 32,119 $ 118,807 $ 85,549 Certain operating expenses are excluded from the Company’s measure of segment operating income. These expenses include costs associated with its human resources, finance, information technology, and business development groups; the deferred compensation expense/benefit due to the change in value of assets associated with its deferred compensation plan; stock-based compensation associated with restricted stock unit and stock option awards; and the change in its allowance for contract losses and doubtful accounts. Capital Expenditures Three Months Ended Nine Months Ended (In thousands) September 30, October 1, September 30, October 1, Engineering and Other Scientific $ 870 $ 563 $ 3,050 $ 1,981 Environmental and Health 48 57 104 136 Total segment capital expenditures 918 620 3,154 2,117 Corporate capital expenditures 1,172 778 6,387 3,086 Total capital expenditures $ 2,090 $ 1,398 $ 9,541 $ 5,203 Certain capital expenditures associated with the Company’s corporate cost centers and the related depreciation are excluded from the Company’s segment information. Depreciation and Amortization Three Months Ended Nine Months Ended (In thousands) September 30, October 1, September 30, October 1, Engineering and Other Scientific $ 1,108 $ 1,089 $ 3,301 $ 3,074 Environmental and Health 41 49 124 141 Total segment depreciation and 1,149 1,138 3,425 3,215 Corporate depreciation and amortization 574 507 1,799 1,728 Total depreciation and amortization $ 1,723 $ 1,645 $ 5,224 $ 4,943 One client comprised 16 % and 15 % of the Company’s revenues during the three months ended September 30, 2022 and October 1, 2021, respectively. The same client comprised 15 % and 13 % of the Company's revenues during the nine months ended September 30, 2022 and October 1, 2021, respectively. |
Leases
Leases | 9 Months Ended |
Sep. 30, 2022 | |
Leases [Abstract] | |
Leases | Note 10: Leases The Company determines if an arrangement is a lease at the inception of the arrangement. Operating leases are included in operating lease right-of-use (“ROU”) assets, current operating lease liabilities, and long-term operating lease liabilities in the Company’s condensed consolidated balance sheet. The Company does not have any finance leases as of September 30, 2022. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate, based on the information available at commencement date, in determining the present value of lease payments. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. The amortization of operating lease ROU assets and the change in operating lease liabilities is disclosed as a single line item in the condensed consolidated statements of cash flows. The Company leases 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. Leases for these office, laboratory, and storage facilities have terms generally ranging between one and ten years . Some of these leases include options to extend or terminate the lease, none of which are currently included in the lease term as the Company has determined that exercise of these options is not reasonably certain. The Company has a Test and Engineering Center on 147 acres of land in Phoenix, Arizona. The Company leases this land from the state of Arizona under a 30-year lease agreement that expires in January of 2028 and has options to renew for two fifteen-year periods. As of September 30, 2022, the Company has determined that exercise of the renewal options is not reasonably certain and thus the extension is not included in the lease term. The Company’s equipment leases are included in the ROU asset and liability balances, but are not material. The Company leases excess space in its Silicon Valley and Natick facilities. Rental income of $ 739,000 and $ 624,000 was included in other income for the three months ended September 30, 2022 and October 1, 2021, respectively. Rental income of $ 2,157,000 and $ 2,030,000 was included in other income for the nine months ended September 30, 2022 and October 1, 2021, respectively. The components of lease expense included in other operating expenses on the condensed consolidated statements of income were as follows: Three Months Ended Nine Months Ended (In thousands) September 30, October 1, September 30, October 1, Operating lease cost $ 1,681 $ 1,635 $ 5,247 $ 4,896 Variable lease cost 274 246 913 793 Short-term lease cost 194 68 425 319 Supplemental cash flow information related to operating leases was as follows: Three Months Ended Nine Months Ended (In thousands) September 30, 2022 October 1, 2021 September 30, 2022 October 1, 2021 Cash paid for amounts included in the $ 1,518 $ 1,566 $ 5,083 $ 5,381 Supplemental balance sheet information related to operating leases was as follows: September 30, December 31, Weighted Average Remaining Lease Term 4.3 years 4.1 years Weighted Average Discount Rate 4.0 % 4.2 % Maturities of operating lease liabilities as of September 30, 2022: Operating (In thousands) Leases 2022 (excluding the nine months ended September 30, 2022) 1,413 2023 5,885 2024 4,178 2025 3,296 2026 3,084 2027 2,589 2028 162 Total lease payments $ 20,607 Less imputed interest ( 2,050 ) Total lease liability $ 18,557 |
Contingencies
Contingencies | 9 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | Note 11: Contingencies The Company is a party to various legal actions from time to time and may be contingently liable in connection with claims and contracts arising in the normal course of business, the outcome of which the Company believes, after consultation with legal counsel, will not have a material adverse effect on its financial condition, results of operations or liquidity. However, due to the risks and uncertainties inherent in legal proceedings, actual results could differ from current expected results. All legal costs associated with litigation are expensed as incurred. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 12: Subsequent Events On October 27, 2022 , the Company’s Board of Directors announced a cash dividend of $ 0.24 per share of the Company’s common stock, payable December 23, 2022 , to stockholders of record as of December 9, 2022 . |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Note 1: Basis of Presentation Exponent, Inc. (referred to as the “Company” or “Exponent”) is an engineering and scientific consulting firm that provides solutions to complex problems. The Company operates on a 52-53 week fiscal year ending on the Friday closest to the last day of December. The accompanying unaudited condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information, the instructions to Form 10-Q and Article 10 of Regulation S-X promulgated by the U.S. Securities and Exchange Commission. Accordingly, they do not contain all the information and notes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, all adjustments which are necessary for the fair presentation of the condensed consolidated financial statements have been included and all such adjustments are of a normal and recurring nature. The operating results for the three and nine months ended September 30, 2022 are not necessarily representative of the results of future quarterly or annual periods. The following information should be read in conjunction with the audited consolidated financial statements and accompanying notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021, which was filed with the U.S. Securities and Exchange Commission on February 25, 2022. The unaudited condensed consolidated financial statements include the accounts of Exponent, Inc. and its subsidiaries, which are all wholly owned. All intercompany accounts and transactions have been eliminated in consolidation. |
Use of Estimates | Use of Estimates. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Items subject to such estimates and assumptions include accounting for revenue recognition and estimating the allowance for contract losses and doubtful accounts. Actual results could differ from those estimates. |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Revenue Recognition [Abstract] | |
Summary of Percent of Revenues | The following table discloses the percentage of the Company’s revenue generated from time and materials contracts: Three Months Ended Nine Months Ended September 30, October 1, September 30, October 1, Engineering & Other Scientific 64 % 62 % 63 % 62 % Environmental and Health 14 % 16 % 16 % 17 % Total time and materials revenues 78 % 78 % 79 % 79 % The following table discloses the percentage of the Company’s revenue generated from fixed price contracts: Three Months Ended Nine Months Ended September 30, October 1, September 30, October 1, Engineering & Other Scientific 21 % 21 % 20 % 20 % Environmental and Health 1 % 1 % 1 % 1 % Total fixed price revenues 22 % 22 % 21 % 21 % |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Assets and Liabilities Measured at Fair Value on Recurring Basis | The fair value of these certain financial assets and liabilities was determined using the following inputs at September 30, 2022: Fair Value Measurements at Reporting Date Using (In thousands) Total Quoted Prices in Significant Other Significant Assets Money market securities (1) $ 51,794 $ 51,794 $ - $ - Fixed income trading securities held in deferred (2) 33,772 33,772 - - Equity trading securities held in deferred compensation (2) 60,807 60,807 - - Total $ 146,373 $ 146,373 $ - $ - Liabilities Deferred compensation plan (3) 94,502 94,502 - - Total $ 94,502 $ 94,502 $ - $ - (1) Included in cash and cash equivalents on the Company’s unaudited condensed consolidated balance sheet. (2) Included in prepaid expenses and other current assets and deferred compensation plan assets on the Company’s unaudited condensed consolidated balance sheet. (3) Included in accrued payroll and employee benefits and deferred compensation plan liabilities on the Company’s unaudited condensed consolidated balance sheet. The fair value of these certain financial assets and liabilities was determined using the following inputs at December 31, 2021: Fair Value Measurements at Reporting Date Using (In thousands) Total Quoted Prices in Significant Other Significant Assets Money market securities (1) $ 101,581 $ 101,581 $ - $ - Fixed income trading securities held in deferred (2) 25,275 25,275 - - Equity trading securities held in deferred compensation (2) 84,067 84,067 - - Total $ 210,923 $ 210,923 $ - $ - Liabilities Deferred compensation plan (3) 110,379 110,379 - - Total $ 110,379 $ 110,379 $ - $ - (1) Included in cash and cash equivalents on the Company’s unaudited condensed consolidated balance sheet. (2) Included in prepaid expenses and other current assets and deferred compensation plan assets on the Company’s unaudited condensed consolidated balance sheet. Included in accrued payroll and employee benefits and deferred compensation plan liabilities on the Company’s unaudited condensed consolidated balance sheet. |
Cash and Cash Equivalents | Cash and cash equivalents consisted of the following as of September 30, 2022: Gross Gross Amortized Unrealized Unrealized Estimated (In thousands) Cost Gains Losses Fair Value Classified as current assets: Cash $ 96,649 $ - $ - $ 96,649 Cash equivalents: Money market securities 51,794 - - 51,794 Total cash equivalents 51,794 - - 51,794 Total cash and cash equivalents 148,443 - - 148,443 Cash and cash equivalents consisted of the following as of December 31, 2021: Amortized Unrealized Unrealized Estimated (In thousands) Cost Gains Losses Fair Value Classified as current assets: Cash $ 196,106 $ - $ - $ 196,106 Cash equivalents: Money market securities 101,581 - - 101,581 Total cash equivalents 101,581 - - 101,581 Total cash and cash equivalents $ 297,687 $ - $ - $ 297,687 |
Net Income Per Share (Tables)
Net Income Per Share (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Reconciles Shares to Calculate Basic and Diluted Net Income Per Share | The following schedule reconciles the shares used to calculate basic and diluted net income per share: Three Months Ended Nine Months Ended (In thousands) September 30, October 1, September 30, October 1, Shares used in basic per share computation 51,492 52,618 51,934 52,597 Effect of dilutive common stock options 202 245 202 239 Effect of dilutive restricted stock units 314 449 353 480 Shares used in diluted per share 52,008 53,312 52,489 53,316 |
Supplemental Cash Flow Inform_2
Supplemental Cash Flow Information (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Supplemental Cash Flow Information [Abstract] | |
Supplemental Disclosure of Cash Flow Information | The following is supplemental disclosure of cash flow information: Nine Months Ended (In thousands) September 30, October 1, Cash paid during period: Income taxes $ 24,349 $ 16,481 Non-cash investing and financing activities: Unrealized loss on short-term investments $ - $ ( 65 ) Vested stock unit awards issued to settle accrued bonuses $ 10,200 $ 7,637 Accrual for capital expenditures as of period end $ 846 $ 368 Right-of-use asset obtained in exchange for operating lease obligations $ 8,090 $ 792 |
Accounts Receivable, Net (Table
Accounts Receivable, Net (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Receivables [Abstract] | |
Accounts Receivable, Net | At September 30, 2022 and December 31, 2021, accounts receivable, net, was comprised of the following: September 30, December 31, (In thousands) 2022 2021 Billed accounts receivable $ 110,428 $ 102,028 Unbilled accounts receivable 61,743 42,256 Allowance for contract losses and doubtful accounts ( 6,157 ) ( 4,423 ) Total accounts receivable, net $ 166,014 $ 139,861 |
Reconciliation of Beginning and Ending Amount of Allowance for Contract Losses and Doubtful Accounts | A reconciliation of the beginning and ending amount of the allowance for contract losses and doubtful accounts is as follows (in thousands): Balance at December 31, 2021 $ 4,423 Provision for contract losses and doubtful accounts 2,112 Write-offs ( 378 ) Balance at September 30, 2022 $ 6,157 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
Segment Reporting Information, by Segment | Segment information for the three and nine months ended September 30, 2022 and October 1, 2021 follows: Revenues Three Months Ended Nine Months Ended (In thousands) September 30, October 1, September 30, October 1, Engineering and Other Scientific $ 107,403 $ 97,100 $ 321,168 $ 288,848 Environmental and Health 19,776 19,305 64,770 63,915 Total revenues $ 127,179 $ 116,405 $ 385,938 $ 352,763 Operating Income Three Months Ended Nine Months Ended (In thousands) September 30, October 1, September 30, October 1, Engineering and Other Scientific $ 39,385 $ 36,676 $ 117,907 $ 108,646 Environmental and Health 6,378 5,851 21,059 21,265 Total segment operating income 45,763 42,527 138,966 129,911 Corporate operating expense ( 8,950 ) ( 10,408 ) ( 20,159 ) ( 44,362 ) Total operating income $ 36,813 $ 32,119 $ 118,807 $ 85,549 Certain operating expenses are excluded from the Company’s measure of segment operating income. These expenses include costs associated with its human resources, finance, information technology, and business development groups; the deferred compensation expense/benefit due to the change in value of assets associated with its deferred compensation plan; stock-based compensation associated with restricted stock unit and stock option awards; and the change in its allowance for contract losses and doubtful accounts. Capital Expenditures Three Months Ended Nine Months Ended (In thousands) September 30, October 1, September 30, October 1, Engineering and Other Scientific $ 870 $ 563 $ 3,050 $ 1,981 Environmental and Health 48 57 104 136 Total segment capital expenditures 918 620 3,154 2,117 Corporate capital expenditures 1,172 778 6,387 3,086 Total capital expenditures $ 2,090 $ 1,398 $ 9,541 $ 5,203 Certain capital expenditures associated with the Company’s corporate cost centers and the related depreciation are excluded from the Company’s segment information. Depreciation and Amortization Three Months Ended Nine Months Ended (In thousands) September 30, October 1, September 30, October 1, Engineering and Other Scientific $ 1,108 $ 1,089 $ 3,301 $ 3,074 Environmental and Health 41 49 124 141 Total segment depreciation and 1,149 1,138 3,425 3,215 Corporate depreciation and amortization 574 507 1,799 1,728 Total depreciation and amortization $ 1,723 $ 1,645 $ 5,224 $ 4,943 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Leases [Abstract] | |
Lease, Cost | The components of lease expense included in other operating expenses on the condensed consolidated statements of income were as follows: Three Months Ended Nine Months Ended (In thousands) September 30, October 1, September 30, October 1, Operating lease cost $ 1,681 $ 1,635 $ 5,247 $ 4,896 Variable lease cost 274 246 913 793 Short-term lease cost 194 68 425 319 |
Supplemental Cash Flow Information Related to Operating Lease | Supplemental cash flow information related to operating leases was as follows: Three Months Ended Nine Months Ended (In thousands) September 30, 2022 October 1, 2021 September 30, 2022 October 1, 2021 Cash paid for amounts included in the $ 1,518 $ 1,566 $ 5,083 $ 5,381 |
Supplemental Balance Sheet Information Related to Operating Lease | Supplemental balance sheet information related to operating leases was as follows: September 30, December 31, Weighted Average Remaining Lease Term 4.3 years 4.1 years Weighted Average Discount Rate 4.0 % 4.2 % |
Maturities of Lease Liabilities | Maturities of operating lease liabilities as of September 30, 2022: Operating (In thousands) Leases 2022 (excluding the nine months ended September 30, 2022) 1,413 2023 5,885 2024 4,178 2025 3,296 2026 3,084 2027 2,589 2028 162 Total lease payments $ 20,607 Less imputed interest ( 2,050 ) Total lease liability $ 18,557 |
Revenue Recognition - Summary o
Revenue Recognition - Summary of Revenues (Detail) - Sales Revenue, Net [Member] - Revenue from Rights Concentration Risk [Member] | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Oct. 01, 2021 | Sep. 30, 2022 | Oct. 01, 2021 | |
Time And Materials Contracts [Member] | ||||
Disaggregation Of Revenue [Line Items] | ||||
Concentration Risk, Percentage | 78% | 78% | 79% | 79% |
Time And Materials Contracts [Member] | Engineering and Other Scientific [Member] | ||||
Disaggregation Of Revenue [Line Items] | ||||
Concentration Risk, Percentage | 64% | 62% | 63% | 62% |
Time And Materials Contracts [Member] | Environmental and Health [Member] | ||||
Disaggregation Of Revenue [Line Items] | ||||
Concentration Risk, Percentage | 14% | 16% | 16% | 17% |
Fixed Price Contracts [Member] | ||||
Disaggregation Of Revenue [Line Items] | ||||
Concentration Risk, Percentage | 22% | 22% | 21% | 21% |
Fixed Price Contracts [Member] | Engineering and Other Scientific [Member] | ||||
Disaggregation Of Revenue [Line Items] | ||||
Concentration Risk, Percentage | 21% | 21% | 20% | 20% |
Fixed Price Contracts [Member] | Environmental and Health [Member] | ||||
Disaggregation Of Revenue [Line Items] | ||||
Concentration Risk, Percentage | 1% | 1% | 1% | 1% |
Revenue Recognition - Additiona
Revenue Recognition - Additional Information (Detail) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Oct. 01, 2021 | Sep. 30, 2022 | Oct. 01, 2021 | |
Revenue Recognition [Abstract] | ||||
Deferred Revenue, Revenue Recognized | $ 6,343,000 | $ 14,215,000 | ||
Subcontractor Fees Not Included In Revenues | $ 6,996,000 | $ 1,219,000 | $ 18,040,000 | $ 9,923,000 |
Assets and Liabilities Measured
Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 | |
Assets | |||
Trading securities held in deferred compensation plan | $ 94,579,000 | $ 109,342,000 | |
Total | 146,373,000 | 210,923,000 | |
Liabilities | |||
Deferred compensation plan | [1] | 94,502,000 | 110,379,000 |
Total | 94,502,000 | 110,379,000 | |
Money market securities | |||
Assets | |||
Money market securities | [2] | 51,794,000 | 101,581,000 |
Fixed Income Securities | |||
Assets | |||
Trading securities held in deferred compensation plan | [3] | 33,772,000 | 25,275,000 |
Equity securities | |||
Assets | |||
Trading securities held in deferred compensation plan | [3] | 60,807,000 | 84,067,000 |
Fair Value, Inputs, Level 1 | |||
Assets | |||
Total | 146,373,000 | 210,923,000 | |
Liabilities | |||
Deferred compensation plan | [1] | 94,502,000 | 110,379,000 |
Total | 94,502,000 | 110,379,000 | |
Fair Value, Inputs, Level 1 | Money market securities | |||
Assets | |||
Money market securities | [2] | 51,794,000 | 101,581,000 |
Fair Value, Inputs, Level 1 | Fixed Income Securities | |||
Assets | |||
Trading securities held in deferred compensation plan | [3] | 33,772,000 | 25,275,000 |
Fair Value, Inputs, Level 1 | Equity securities | |||
Assets | |||
Trading securities held in deferred compensation plan | [3] | 60,807,000 | 84,067,000 |
Fair Value, Inputs, Level 2 | |||
Assets | |||
Total | 0 | 0 | |
Liabilities | |||
Deferred compensation plan | [1] | 0 | 0 |
Total | 0 | 0 | |
Fair Value, Inputs, Level 2 | Money market securities | |||
Assets | |||
Money market securities | [2] | 0 | 0 |
Fair Value, Inputs, Level 2 | Fixed Income Securities | |||
Assets | |||
Trading securities held in deferred compensation plan | [3] | 0 | 0 |
Fair Value, Inputs, Level 2 | Equity securities | |||
Assets | |||
Trading securities held in deferred compensation plan | [3] | 0 | 0 |
Fair Value, Inputs, Level 3 | |||
Assets | |||
Total | 0 | 0 | |
Liabilities | |||
Deferred compensation plan | [1] | 0 | 0 |
Total | 0 | 0 | |
Fair Value, Inputs, Level 3 | Money market securities | |||
Assets | |||
Money market securities | [2] | 0 | 0 |
Fair Value, Inputs, Level 3 | Fixed Income Securities | |||
Assets | |||
Trading securities held in deferred compensation plan | [3] | 0 | 0 |
Fair Value, Inputs, Level 3 | Equity securities | |||
Assets | |||
Trading securities held in deferred compensation plan | [3] | $ 0 | $ 0 |
[1] Included in accrued payroll and employee benefits and deferred compensation plan liabilities on the Company’s unaudited condensed consolidated balance sheet. Included in cash and cash equivalents on the Company’s unaudited condensed consolidated balance sheet. Included in prepaid expenses and other current assets and deferred compensation plan assets on the Company’s unaudited condensed consolidated balance sheet. |
Cash and Cash Equivalents (Deta
Cash and Cash Equivalents (Detail) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Cash | ||
Fair Value Measurements [Line Items] | ||
Amortized Cost | $ 96,649 | $ 196,106 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Estimated Fair Value | 96,649 | 196,106 |
Money market securities | ||
Fair Value Measurements [Line Items] | ||
Amortized Cost | 51,794 | 101,581 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Estimated Fair Value | 51,794 | 101,581 |
Total cash equivalents | ||
Fair Value Measurements [Line Items] | ||
Amortized Cost | 51,794 | 101,581 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Estimated Fair Value | 51,794 | 101,581 |
Total cash and cash equivalents | ||
Fair Value Measurements [Line Items] | ||
Amortized Cost | 148,443 | 297,687 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Estimated Fair Value | $ 148,443 | $ 297,687 |
Reconciles the Denominators of
Reconciles the Denominators of the Company's Calculation for Basic and Diluted Net Income per Share (Detail) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Oct. 01, 2021 | Sep. 30, 2022 | Oct. 01, 2021 | |
Schedule Of Earnings Per Share Basic and Diluted [Line Items] | ||||
Shares used in basic per share computation | 51,492 | 52,618 | 51,934 | 52,597 |
Shares used in diluted per share computation | 52,008 | 53,312 | 52,489 | 53,316 |
Employee Stock Option | ||||
Schedule Of Earnings Per Share Basic and Diluted [Line Items] | ||||
Effect of dilutive stock outstanding | 202 | 245 | 202 | 239 |
Restricted Stock Units (RSUs) | ||||
Schedule Of Earnings Per Share Basic and Diluted [Line Items] | ||||
Effect of dilutive stock outstanding | 314 | 449 | 353 | 480 |
Net Income Per Share - Addition
Net Income Per Share - Additional Information (Detail) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Oct. 01, 2021 | Sep. 30, 2022 | Oct. 01, 2021 | |
Earnings Per Share [Abstract] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 0 | 0 | 0 | 0 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Detail) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Oct. 01, 2021 | Sep. 30, 2022 | Oct. 01, 2021 | |
Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Percentage of annual bonus settled with fully vested restricted stock unit awards | 40% | |||
Vested Restricted Stock Awards | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock based compensation, holding period | 4 years | |||
Stock based compensation expense | $ 2,606,000 | $ 2,525,000 | $ 8,133,000 | $ 7,723,000 |
Unvested Restricted Stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock based compensation, vesting period | 4 years | |||
Unvested Restricted Stock Awards | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock based compensation expense | 1,787,000 | 1,654,000 | $ 7,315,000 | 6,967,000 |
Unvested Restricted Stock Awards | Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Recipient age to expense award on grant date | 59 years 6 months | |||
Employee Stock Option | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock based compensation, vesting period | 4 years | |||
Stock based compensation expense | $ 212,000 | $ 186,000 | $ 623,000 | $ 549,000 |
Share Based Compensation Arrangement By Share Based Payment Award Options Expiration Term | 10 years | |||
Vesting percentage of stock options granted per year | 25% | |||
Unvested Stock Options | Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Recipient age to expense award on grant date | 59 years 6 months |
Deferred Compensation Plans - A
Deferred Compensation Plans - Additional Information (Detail) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2022 | Oct. 01, 2021 | Sep. 30, 2022 | Oct. 01, 2021 | Dec. 31, 2021 | ||
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | ||||||
Trading securities held in deferred compensation plan | $ 94,579,000 | $ 94,579,000 | $ 109,342,000 | |||
Deferred compensation plan | [1] | 94,502,000 | 94,502,000 | $ 110,379,000 | ||
Change in market value of trust assets | $ (4,925,000) | $ (258,000) | $ (20,884,000) | $ 9,997,000 | ||
Maximum | ||||||
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | ||||||
Percentage of compensation deferred | 100% | |||||
[1] Included in accrued payroll and employee benefits and deferred compensation plan liabilities on the Company’s unaudited condensed consolidated balance sheet. |
Supplemental Disclosure of Cash
Supplemental Disclosure of Cash Flow Information (Detail) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Oct. 01, 2021 | |
Cash paid during period: | ||
Income taxes | $ 24,349 | $ 16,481 |
Non-cash investing and financing activities: | ||
Unrealized loss on short-term investments | 0 | (65) |
Vested stock unit awards issued to settle accrued bonuses | 10,200 | 7,637 |
Accrual for capital expenditures as of period end | 846 | 368 |
Right-of-use asset obtained in exchange for operating lease obligations | $ 8,090 | $ 792 |
Accounts Receivable, Net (Detai
Accounts Receivable, Net (Detail) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Accounts Notes And Loans Receivable [Line Items] | ||
Allowance for contract losses and doubtful accounts | $ (6,157) | $ (4,423) |
Total accounts receivable, net | 166,014 | 139,861 |
Billed accounts receivable | ||
Accounts Notes And Loans Receivable [Line Items] | ||
Accounts Receivable | 110,428 | 102,028 |
Unbilled accounts receivable | ||
Accounts Notes And Loans Receivable [Line Items] | ||
Accounts Receivable | $ 61,743 | $ 42,256 |
Accounts Receivable, Net - Reco
Accounts Receivable, Net - Reconciliation of Beginning and Ending Amount of Allowance for Contract Losses and Doubtful Accounts (Detail) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Oct. 01, 2021 | |
Receivables [Abstract] | ||
Balance at December 31, 2021 | $ 4,423 | |
Provision for contract losses and doubtful accounts | 2,112 | $ 1,197 |
Write-offs | (378) | |
Balance at September 30, 2022 | $ 6,157 |
Segment Information (Detail)
Segment Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Oct. 01, 2021 | Sep. 30, 2022 | Oct. 01, 2021 | |
Segment Reporting Information [Line Items] | ||||
Revenues | $ 127,179 | $ 116,405 | $ 385,938 | $ 352,763 |
Operating Income | 36,813 | 32,119 | 118,807 | 85,549 |
Capital Expenditures | 2,090 | 1,398 | 9,541 | 5,203 |
Depreciation and Amortization | 1,723 | 1,645 | 5,224 | 4,943 |
Operating segments | ||||
Segment Reporting Information [Line Items] | ||||
Operating Income | 45,763 | 42,527 | 138,966 | 129,911 |
Capital Expenditures | 918 | 620 | 3,154 | 2,117 |
Depreciation and Amortization | 1,149 | 1,138 | 3,425 | 3,215 |
Corporate | ||||
Segment Reporting Information [Line Items] | ||||
Operating Income | (8,950) | (10,408) | (20,159) | (44,362) |
Capital Expenditures | 1,172 | 778 | 6,387 | 3,086 |
Depreciation and Amortization | 574 | 507 | 1,799 | 1,728 |
Engineering and Other Scientific | Operating segments | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 107,403 | 97,100 | 321,168 | 288,848 |
Operating Income | 39,385 | 36,676 | 117,907 | 108,646 |
Capital Expenditures | 870 | 563 | 3,050 | 1,981 |
Depreciation and Amortization | 1,108 | 1,089 | 3,301 | 3,074 |
Environmental and Health | Operating segments | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 19,776 | 19,305 | 64,770 | 63,915 |
Operating Income | 6,378 | 5,851 | 21,059 | 21,265 |
Capital Expenditures | 48 | 57 | 104 | 136 |
Depreciation and Amortization | $ 41 | $ 49 | $ 124 | $ 141 |
Segment Reporting - Additional
Segment Reporting - Additional Information (Detail) - Sales Revenue, Net [Member] - Customer Concentration Risk [Member] - Client One [Member] - Client | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Oct. 01, 2021 | Sep. 30, 2022 | Oct. 01, 2021 | |
Segment Reporting Information [Line Items] | ||||
Number of clients comprised more than 10% of revenues | 1 | 1 | 1 | 1 |
Concentration Risk, Percentage | 16% | 15% | 15% | 13% |
Leases - Additional Information
Leases - Additional Information (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 USD ($) a Option State | Oct. 01, 2021 USD ($) | Sep. 30, 2022 USD ($) a Option State | Oct. 01, 2021 USD ($) | |
Other Income [Member] | ||||
Lessee Lease Description [Line Items] | ||||
Rental Income | $ | $ 739,000 | $ 624,000 | $ 2,157,000 | $ 2,030,000 |
Office, Laboratory, and Storage Space [Member] | ||||
Lessee Lease Description [Line Items] | ||||
Number of States in which Entity Has Lease Arrangements | State | 13 | 13 | ||
Office, Laboratory, and Storage Space [Member] | Minimum | ||||
Lessee Lease Description [Line Items] | ||||
Lessee, Operating Lease, Term of Contract | 1 year | 1 year | ||
Office, Laboratory, and Storage Space [Member] | Maximum | ||||
Lessee Lease Description [Line Items] | ||||
Lessee, Operating Lease, Term of Contract | 10 years | 10 years | ||
Phoenix Arizona | ||||
Lessee Lease Description [Line Items] | ||||
Lessee, Operating Lease, Term of Contract | 30 years | 30 years | ||
Area of Land | a | 147 | 147 | ||
Number of Options to Renew Lease | Option | 2 | 2 | ||
Lessee, Operating Lease, Renewal Term | 15 years | 15 years |
Components of Lease Expense (De
Components of Lease Expense (Details) - Other Operating Income (Expense) [Member] - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Oct. 01, 2021 | Sep. 30, 2022 | Oct. 01, 2021 | |
Operating lease cost | $ 1,681 | $ 1,635 | $ 5,247 | $ 4,896 |
Variable lease cost | 274 | 246 | 913 | 793 |
Short-term lease cost | $ 194 | $ 68 | $ 425 | $ 319 |
Supplemental Cash Flow Inform_3
Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Oct. 01, 2021 | Sep. 30, 2022 | Oct. 01, 2021 | |
Cash paid for amounts included in the measurement of operating lease liabilities: | ||||
Operating cash flows from operating leases | $ 1,518 | $ 1,566 | $ 5,083 | $ 5,381 |
Supplemental Balance Sheet Info
Supplemental Balance Sheet Information (Details) | Sep. 30, 2022 | Dec. 31, 2021 |
Leases [Abstract] | ||
Weighted Average Remaining Lease Term | 4 years 3 months 18 days | 4 years 1 month 6 days |
Weighted Average Discount Rate | 4% | 4.20% |
Maturities of Lease Liabilities
Maturities of Lease Liabilities (Details) $ in Thousands | Sep. 30, 2022 USD ($) |
Leases [Abstract] | |
2022 (excluding the nine months ended September 30, 2022) | $ 1,413 |
2023 | 5,885 |
2024 | 4,178 |
2025 | 3,296 |
2026 | 3,084 |
2027 | 2,589 |
2028 | 162 |
Total lease payments | 20,607 |
Less imputed interest | (2,050) |
Total lease liability | $ 18,557 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Detail) - $ / shares | 3 Months Ended | 9 Months Ended | |||
Oct. 27, 2022 | Sep. 30, 2022 | Oct. 01, 2021 | Sep. 30, 2022 | Oct. 01, 2021 | |
Subsequent Event [Line Items] | |||||
Cash dividends declared per common share (in dollars per share) | $ 0.24 | $ 0.20 | $ 0.72 | $ 0.60 | |
Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Cash dividends declared per common share (in dollars per share) | $ 0.24 | ||||
Dividends Payable, Date Declared | Oct. 27, 2022 | ||||
Dividends Payable, Date to be Paid | Dec. 23, 2022 | ||||
Dividends Payable, Date of Record | Dec. 09, 2022 |