Exponent (EXPO) 8-K Exponent Reports Second Quarter 2003 Results

EXHIBIT 99.1

Exponent Reports Second Quarter 2003 Results

MENLO PARK, Calif., July 21, 2003—Exponent, Inc. (Nasdaq: EXPO) today reported financial results for the second quarter ended July 4, 2003.

In the second quarter of 2003, net income increased by 26% to $2,674,000, or $0.34 per diluted share, compared to $2,123,000, or $0.28 per diluted share for the same period a year ago. Revenues were $34,922,000, an increase of 10%, versus $31,632,000 for the same period a year ago.

For the first half of 2003, net income increased by 27% to $5,143,000, or $0.65 per diluted share, compared to $4,042,000, or $0.54 per diluted share, for the same period in 2002. Revenues were $69,737,000, an increase of 12%, versus $62,244,000 for the same period a year ago.

“We are pleased to report record quarterly revenues and net income. We experienced strong growth in our Technology Development, Civil, Toxicology and Mechanics and Materials practices,” commented President and CEO, Michael R. Gaulke. “During the quarter Technology Development delivered additional integrated robots and controllers to assist the U.S. Army in exploring caves and searching buildings. Our engineering field support teams in Iraq and Afghanistan have been supporting the Rapid Equipping Force in developing and deploying technologies to soldiers in the field. Additionally, we worked on the fourth phase of the Advanced Combat Uniform project, which included the prototyping of our proposed design for the next generation of soldier ensemble.”

Mr. Gaulke continued, “We continued our strategic focus in pursuit of a leadership position in health science consulting. During the quarter we continued to be involved in the scientific aspects of litigation involving alleged health hazards of asbestos in products, such as floor tiles, roofing materials, glues and brake pads. Additionally, the integration of our new Food and Chemicals practice, formerly Novigen Sciences which was acquired in May of 2002, continued to contribute to the growth of this segment of our business.”

Exponent is an engineering and scientific consulting firm providing solutions to complex problems. Exponent’s multidisciplinary organization of scientists, physicians, engineers, and business consultants brings together more than 70 technical disciplines to address complicated issues facing industry and government today. The firm’s consultants analyze failures and accidents to determine their causes and provide answers to help prevent such problems. In addition, Exponent evaluates human health and environmental concerns to find cost-effective solutions.

Exponent may be reached at (888) 656-EXPO,mailto:info@exponent.com, orwww.exponent.com.

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This news release contains, and incorporates by reference, certain “forward-looking” statements (as such term is defined in the Private Securities Litigation Reform Act of 1995, and the rules promulgated pursuant to the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended thereto under) that are based on the beliefs of the Company’s management, as well as assumptions made by and information currently available to the Company’s management. Such forward-looking statements are subject to the safe harbor created by the Private Securities Litigation Reform Act of 1995. When used in this document and in the documents incorporated herein by reference, the words “anticipate,” “believe,” “estimate,” “expect” and similar expressions, as they relate to the Company or its management, identify such forward-looking statements. Such statements reflect the current views of the Company or its management with respect to future events and are subject to certain risks, uncertainties and assumptions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, the Company’s actual results, performance, or achievements could differ materially from those expressed in, or implied by, any such forward-looking statements. Factors that could cause or contribute to such material differences include those discussed in our Annual Report on Form 10-K under the heading “Factors That May Affect Future Operating Results and Market Price of Stock” and elsewhere in the report. The inclusion of such forward-looking information should not be regarded as a representation by the Company or any other person that the future events, plans, or expectations contemplated by the Company will be achieved. The Company undertakes no obligation to release publicly any updates or revisions to any such forward-looking statements.

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EXPONENT, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

For the Quarters and Six Months Ended July 4, 2003 and June 28, 2002

(in thousands, except per share data)

	Quarters Ended				Six Months Ended
	July 4, 2003		June 28, 2002		July 4, 2003		June 28, 2002
Revenues
Revenues before reimbursements	$	31,808	$	28,894	$	63,279	$	57,125
Reimbursements		3,114		2,738		6,458		5,119
Revenues		34,922		31,632		69,737		62,244
Operating expenses
Compensation and related expenses		20,713		18,923		41,315		37,401
Other operating expenses		4,522		4,321		9,181		8,354
Reimbursable expenses		3,114		2,738		6,458		5,119
General and administrative expenses		2,065		2,032		4,186		3,850
		30,414		28,014		61,140		54,724
Operating income		4,508		3,618		8,597		7,520
Other income
Interest income, net		13		40		24		60
Miscellaneous income, net		209		98		480		190
		222		138		504		250
Income before income taxes		4,730		3,756		9,101		7,770
Income taxes		2,056		1,633		3,958		3,728
Net income	$	2,674	$	2,123	$	5,143	$	4,042
Net income per share:
Basic	$	0.37	$	0.32	$	0.72	$	0.61
Diluted	$	0.34	$	0.28	$	0.65	$	0.54
Shares used in per share computations:
Basic		7,215		6,739		7,164		6,642
Diluted		7,932		7,480		7,862		7,420

EXPONENT, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

July 4, 2003 and January 3, 2003

(in thousands)

	July 4, 2003			January 3, 2003
Assets
Current assets:
Cash and cash equivalents	$	26,050		$	22,480
Accounts receivable, net		40,243			38,404
Prepaid expenses and other assets		1,741			3,450
Deferred income taxes		1,928			1,928
Total current assets		69,962			66,262
Property, equipment and leasehold improvements, net		31,331			31,712
Goodwill		8,573			8,567
Other assets		620			675
	$	110,486		$	107,216
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable and accrued liabilities	$	3,301		$	5,183
Current installments of long-term obligations		61			205
Accrued payroll and employee benefits		14,002			14,667
Deferred revenues		858			1,511
Total current liabilities		18,222			21,566
Long-term obligations, net of current installments		197			167
Deferred income taxes		860			860
Deferred rent		935			837
Total liabilities		20,214			23,430
Stockholders’ equity:
Common stock		8			8
Additional paid-in capital		34,228			33,898
Accumulated other comprehensive income (loss)		26			(39	)
Retained earnings		61,441			56,298
Treasury shares, at cost		(5,431	)		(6,379	)
Total stockholders’ equity		90,272			83,786
	$	110,486		$	107,216