Exponent (EXPO) 8-K Exponent Reports Fourth Quarter and Fiscal Year 2003 Results

Exhibit 99.1

Exponent Reports Fourth Quarter and Fiscal Year 2003 Results

MENLO PARK, Calif., January 29, 2004 - Exponent, Inc. (Nasdaq: EXPO) today reported financial results for the fourth quarter and fiscal year ended January 2, 2004.

For the fourth quarter of 2003, which included 13 weeks of activity, revenues were $34,282,000, an increase of 4% over $32,849,000 reported in the same period of 2002, which included fourteen weeks of activity. Net income increased by 23% to $2,175,000, or $0.27 per diluted share, as compared to $1,767,000, or $0.23 per diluted share, for the same period of 2002.

For fiscal year 2003, which included fifty-two weeks of activity, revenues were $139,676,000, an increase of 11% over $126,055,000 reported in fiscal year 2002, which included fifty-three weeks of activity. Net income increased by 28% to $10,166,000, or $1.27 per diluted share, as compared to $7,924,000, or $1.05 per diluted share, for the fiscal year 2002.

In 2003, Exponent generated $21,570,000 in cash from operating activities and closed the year with $41,758,000 in cash, cash equivalents and short-term investments.

“We are pleased with our fourth quarter financial results, which brings a year of solid revenue and earnings growth to a close,” commented President and CEO, Michael R. Gaulke. “During the year, we were successful at identifying and further developing strategic practice areas, and through the sound management of costs, we improved operating and net income performance.”

“In the fourth quarter, we continued to expand our capabilities in key practice areas, including defense technology development, vehicle analysis, and health sciences. We completed a substantial portion of our contracted work for the U.S. Army’s Rapid Equipping Force. Our vehicle analysis practice performed accident reconstructions for litigation and worked on automotive recall issues. We also continued to make progress in the area of construction disputes, and have hired key personnel to help capitalize on this opportunity. In addition, our health sciences practices continue to work on new projects related to human health.”

“We are pleased with both our strategic and financial accomplishments in 2003 and are optimistic about our future. We believe that we are well positioned to continue to leverage our expertise and expect additional growth in the year ahead,” concluded Mr. Gaulke.

Earnings Call Information

Exponent will host a conference call discussing the Company’s fourth quarter and fiscal year 2003 results today, Thursday, January 29, 2004 starting at 4:30 p.m. Eastern Time/1:30 p.m. Pacific Time. A live webcast of the call will be available on the Investor Relations section of the Company’s web site at www.exponent.com/investors. For those unable to listen to the live webcast, a replay of the call will also be available on the Exponent web site, or by dialing 800-633-8284 and entering reservation #21182809.

About Exponent

Exponent is an engineering and scientific consulting firm providing solutions to complex problems. Exponent’s multidisciplinary organization of scientists, physicians, engineers, and business consultants brings together more than 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,info@exponent.com, orwww.exponent.com.

This news release contains, and incorporates by reference, certain “forward-looking” statements (as such term is defined in the Private Securities Litigation Reform Act of 1995, and the rules promulgated pursuant to the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended thereto under) that are based on the beliefs of the Company’s management, as well as assumptions made by and information currently available to the Company’s management. Such forward-looking statements are subject to the safe harbor created by the Private Securities Litigation Reform Act of 1995. When used in this document and in the documents incorporated herein by reference, the words “anticipate,” “believe,” “estimate,” “expect” and similar expressions, as they relate to the Company or its management, identify such forward-looking statements. Such statements reflect the current views of the Company or its management with respect to future events and are subject to certain risks, uncertainties and assumptions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, the Company’s actual results, performance, or achievements could differ materially from those expressed in, or implied by, any such forward-looking statements. Factors that could cause or contribute to such material differences include 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.

EXPONENT, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

For the Quarter and Year Ended January 2, 2004 and January 3, 2003

(in thousands, except per share data)

	Quarters Ended				Year Ended
	January 2, 2004 (13 Weeks)		January 3, 2003 (14 Weeks)		January 2, 2004 (52 Weeks)		January 3, 2003 (53 Weeks)
Revenues
Revenues before reimbursements	$	30,714	$	29,706	$	125,943	$	115,298
Reimbursements		3,568		3,143		13,733		10,757
Revenues		34,282		32,849		139,676		126,055
Operating expenses
Compensation and related expenses		20,409		19,932		82,297		75,699
Other operating expenses		4,463		4,646		17,897		17,501
Reimbursable expenses		3,568		3,143		13,733		10,757
General and administrative expenses		2,378		2,359		8,847		8,062
		30,818		30,080		122,774		112,019
Operating income		3,464		2,769		16,902		14,036
Other income
Interest income, net		75		25		134		118
Miscellaneous income, net		182		335		660		486
		257		360		794		604
Income before income taxes		3,721		3,129		17,696		14,640
Income taxes		1,546		1,362		7,530		6,716
Net income	$	2,175	$	1,767	$	10,166	$	7,924
Net income per share:
Basic	$	0.30	$	0.25	$	1.41	$	1.16
Diluted	$	0.27	$	0.23	$	1.27	$	1.05
Shares used in per share computations:
Basic		7,246		7,037		7,196		6,802
Diluted		8,173		7,715		7,996		7,538

EXPONENT, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

January 2, 2004 and January 3, 2003

(in thousands)

	January 2, 2004			January 3, 2003
Assets
Current assets:
Cash and cash equivalents	$	19,490		$	22,480
Short-term investments		22,268			—
Accounts receivable, net		35,844			38,404
Prepaid expenses and other assets		2,095			3,450
Deferred income taxes		2,052			1,928
Total current assets		81,749			66,262
Property, equipment and leasehold improvements, net		30,793			31,712
Goodwill		8,607			8,567
Other assets		693			675
	$	121,842		$	107,216
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable and accrued liabilities	$	4,783		$	5,325
Current installments of long-term obligations		55			63
Accrued payroll and employee benefits		16,528			14,667
Deferred revenues		2,864			1,511
Total current liabilities		24,230			21,566
Long-term obligations, net of current installments		169			167
Deferred income taxes		1,211			860
Deferred rent		1,031			837
Total liabilities		26,641			23,430
Stockholders’ equity:
Common stock		8			8
Additional paid-in capital		34,084			33,898
Accumulated other comprehensive income (loss)		94			(39	)
Retained earnings		66,464			56,298
Treasury shares, at cost		(5,449	)		(6,379	)
Total stockholders’ equity		95,201			83,786
	$	121,842		$	107,216