EXPO - Earnings call transcript Q1 2018

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Operator

Good day, and welcome to the Exponent's First Quarter of Fiscal 2018 Financial Results Conference Call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Whitney Kukulka, Investor Relations. Please go ahead, ma’am.

Whitney Kukulka

Thank you, operator. gentlemen. and ladies afternoon, Good Thank you financial first XXXX on joining conference call. us results Exponent's quarter for Please this corporate Investor Relations note on section webcast that of call will the company's website www.exponent.com/investors. simultaneously at be the call other is or conference any written without reproduction is Exponent, expressly of This and property taping prior prohibited consent. the

President; Financial the Executive Vice Schlenker, call on Johnston, Officer. me Rich are Paul Chief and and Chief Executive Joining today Officer; Catherine Corrigan, President

contains forward-looking you future Before discussion differ we here. risks discussed that like to, may limited to remind I financial that from actual cause include and including, start, the statements, Exponent's would to that and opportunities not uncertainties those materially results but following market results

found are expectations new the developments in periodic including or to could under caption And Form factors this in filings, that as Chief over of the revise and Exponent's discussed actual forward-looking result based update those recent Paul? Johnston, most information Stock Affecting XX-K. Market differ in I Price Officer. will a cause The now, and be on statements Executive Operating from them, to Paul Exponent's today, Results call as Factors and to SEC Additional can results forward-looking statements or assumes obligation current call conference whether no Exponent turn of otherwise. risks

Paul Johnston

Thank you. Thank joining us you for today.

continued to outlook. momentum performance closing business XXXX your we XXXX, will and Exponent its a provide which, open and review Catherine company her Rich our first from positioning our last results, call first my We will discussion of financial quarter strong revenues grew to after the Following XX%, more period detailed compared will quarter questions. remarks, long-term of by the thoughts Then provide points delivered into XX% expanded strong the We success. of of net first as financial for same to margin revenues basis and the results, year. by XXX net while EBITDA quarter the XXXX.

benefited project, positive the several of industries, results factors and well in from quarter geographies, we XXXX. market the quarter across which discussing practices Our first shipment as as began large trends ongoing first

are battery technology We energy. consumer related good from and products, advice several including medical interdisciplinary automotive, device for seeing industries to demand

proactive for retained both being reactive and are services. We

clients addition We providing engaged technology recalls and litigation support consulting. have with and design to product been to in assessments

battery expertise Our products North their and sold invaluable are around as Asia located the manufactured and in has Europe America, globe. declines been

third We between first to These and Engineering representing quarter. also Phoenix the our continue test upon X% leveraging recall and support of industry a year. consumer in of seeing We're again most vehicles. automated in the called team a X% products project opportunities to to the issues. as rate in analyze in X% multidisciplinary net This high to at the human step quarter, during significant Center. the and The revenues is will industry and net and revenues clients engagements electric client be and factors to fourth of growth in and by between product compared automotive quarter the last down large for expected X% project X% second are their of our deployment quarter increase approximately continued development to the

value pleased in that delivering. client We are finding is that very are significant this we the data

net company's companies, and Exponent’s assessments scientific a of approximately opportunity developers are capabilities Additionally, engineering augmented first reality. automotive including manufacturers, for XX% medical game engaged firms in by companies, and factors of strength work human perform video revenues. grew appliance we've XX% other year-over-year electronics Exponent. segment and to and represented device been source quarter consumer the future These

its had engineering and electrical polymer science segment During notable quarter, performances factors, practices. engineering, this human in the vehicle

paid products consumer to Exponent’s see XX% product for expand cycle. throughout from year-over-year to advice around and automotive life continue in with as XX% confidence product demand regulation company's companies long support services build quarterly and continue ecosystems shareholder in chemical environmental first health. continue related segment $X.X concerned society its advice our approximately the the of dividend dividends quarter our Exponent’s health practice net services quarterly project. our the seek the value. including Proactive interdisciplinary food health assessments and and chemicals today expanded strong $X.XX large payment the industries. We also our and payment the recalls of share. a as human dividend and to announced from safety model proactive environmental issues term human represented affecting segment clients revenue. grew in to about that and Consultants world. regulatory regular human regular scientists per remains Exponent’s in and the this first demonstrates Exponent’s believe to factors services were and We engaged quarter We million assignments commitment

May we to Dr. promote Catherine and President XX Corrigan, role CEO on current our As of President. the we December will announced in

lead As am look Chairman right into forward is supporting Catherine person I the firm the I that our to she future. as to certain

I clients scientific is in the for opportunity has that I for your sound continued the say entire would Exponent’s loyalty thank an I company, their great serve deliver it trust to to you ability like the staffs advice. our this Before turn this our been Chief call and dedication shareholders over committed they to of to would to and for honor take to like which and our Executive support, as Rich, to privilege excellence. put

Rich Schlenker

Thanks, Paul.

specified. year-over-year basis Let me otherwise all comparisons saying start that on by be will a unless

awards. to XXXX, based shared total per classification million For share as $XX.X from new or standard up to share. I the XX% accounting revenues revenues Exponent to XXXX, $XX.X In here on were of income million, adopted of Net net XX% $X.XX $XX.X associated per or revenues will for million, diluted as $X.XX or adjustments increased refer before diluted to compared a tax $XX.X the with reimbursements first them to million. XX% were up quarter

tax compared or million from realized quarter gains awards $X.XX upon in in $X.XX per share-based issuance share $X.X the $X first or was million, to benefit The XXXX. XXXX per share, of as

As legislation, rate, also will $XX.X quarter income I tax later. to which reduced benefited for new from increased a discuss XX% reminder, tax which million. the the net EBITDA our our consolidated

the first XX.X% hours increased billable For quarter, to XXX,XXX.

down project For and the flat vocations the X.X% from in second quarter, quarter as compared approximately of in except of human X% discussions, factors the to The after and quarter X% and in the Based step this current period to quarter. down on as to project quarter to again the third be in in same to the and This approximately on year approximately adjusting the points of X project Based for percentage the revenues we in down this the large second first year. first quarter. first seasonal same quarter. compared net vacations revenues period utilization an will step utilization increase to last will X% fourth approximately in was was fourth XX.X% X level XX.X% increase we last for activity in then expect quarter, holidays. with the the

were Technical same up XXXX, X.X be full percentage full we to quarter last XXX, the the down year. XX.X%. from X.X% in X approximately the year year's last time points to from by equivalent period employees utilization expect For

For be X.X% approximately to rate realized the approximately increase in X%. sequential was first The remainder of XXXX, growth quarter. we the expect headcount quarterly

the XXXX, remainder we realized X%. the of to increase For rate approximately expect be

For was XXX increase an points. EBITDA of quarter, the first margin XX.X%, basis

the points. of improving result we our a profitability, by XX As quarter strong basis first are margin expectations

to now expected margin full is year EBITDA points XXXX, anticipated the basis utilization. XXX to to primarily in the related of the XXXX decline For XX down be from

adjusting deferred compensation is compensation For the compensation XX.X%. to of losses loss in gains quarter compensation for by and $XXX,XXX gain a expense $X.X as and increased in a Included after of million. total expense compared deferred

XXXX $X.X offset impact realized and expense to gains in compared As deferred approximately are rate on bottom effective in Stock in XXXX. bill the the are the will X, income million as no increases the rise compensation based quarter as a $X.X reminder, line. in the million losses increase. was be April miscellaneous and same salaries salary compensation have

We $X.X the approximately $X.X expenses is expenses Other $X.X quarters $X.X the compensation to in of operating in expense the first expect remaining quarter. operating Included to increased depreciation each be to million million million. other stock-based X.X% million of in year.

of of the remainder expenses million decreased expenses XXXX, to range For G&A million quarter. quarter. other the million $X.X $X.X operating per to the in be $X to are first X.X% in expected approximately

in XXXX, For higher the XXth anniversary due our first expenses meeting managers expenses. marketing of quarter to G&A were

our of remainder of $X.X million to XXXX, in expand expected million For will I our G&A expectations are QX the quarter. for to the taxes and XXXX. be remainder $X of per range on the expenses

quarter. the a $X.X tax million have share-based realized from benefit in awards We

are compared of years lower reminder, event be tax tax further new to compensation from by it the the and the was but tax Exponent’s Inclusive four the a expected consolidated legislation, federal Therefore, Prior the already of for later. March tax X.X% rate. quarter same our of benefit we the As program to first as to in last these compared for enactment awards annually XXXX, rate was year. is in reduced to quarter tax period benefit, benefit the shares had down share-based part Exponent. the released X.X% tax as primarily a granted

of would tax the XX.X% our have purposes, the rate the benefit in quarter to period exclusive of XXXX as awards, year. compared comparison last For share-based in XX.X% for same first been tax

would XX% be rate income. full the of tax of approximately been will We the lower rate to XX%, generate our additional during legislation. approximately be basis is XX% $X rate have our than net points new to year which to as expect year result million This $X million XX tax to to consolidated and XX% tax of tax lower an remainder a the

operating as million were result than to the bonuses, we we dividend annual construction distributed to quarter for and purchase second announced million a payments ended and the quarterly lower we is out new of cash cash a facility, Moving of bonuses. annual XXXX. expenditures quarter other land today investments. $X.X with of the the Capital flows, $X.X the million which in Boston of were of in for was quarters $X.X short-term paying have quarter, discussed. $X.XX We used which million dividend through area million previously $XXX of of and cash $X.X first flows After payment our shareholders which the for the for a dividends quarter

repurchases our current We available million repurchase have and program. $XX under authorized for

in the forward, expected outlook we in project momentum as our reflects the as As the assessment ongoing well XXXX. look of positive factors human business deceleration

XXXX. to our revenues to turn margin EBITDA to grow decline to will of XXXX. expect mid improving are points over expectations for I before the approximately digits full Dr. by XXX We as now in reimbursements Catherine basis Corrigan. and single to to basis points We call the compared now the year high XX

Catherine Corrigan

Thank you, Rich.

indicate As complex. services our multidisciplinary market safety, become challenging, for results reach Exponent Clients increased a capabilities their issues. for seeking as products offering. created solutions demand are more is most its Exponent’s have graphical environmental integrated reliability and differentiated and health, processes experiencing and

fifty has last plus of scientists. developed brightest the the Exponent Over years, and engineers and hired some

cutting continue Ph.D. industry, and allows the firms. are to as and new us students value. capabilities solutions as providing consulting as best from from the edge combination Ph.D.s critical and This high experience a broaden innovative also experts as attracting top hiring We of to deepen well recognized our by government and and mature teams provide of as recognized Interdisciplinary universities leverage technology. we are remain experts our

for As a am over more us year, and for working team our clients and which of teams, capitalize these I on industry provides more client with internal We with set see industry clients growth. I cross-selling. time opportunities with our opportunities. X,XXX with opportunities per work and to I tremendous spent broader

stakeholders. We empower success value for Exponent results delivering the technologically to engage for lead on a financial and brightest safe, creating are our healthy, positioning excited I am and sustainable company clients scientists as working to years with engineers we and focused strong long-term for and to the you want solutions for we years tremendous take come. over also forward the ready to moment him to last questions. Thank to I joining the for are in with today's look world. nine leadership Paul thank for a call. complex Operator, his

Operator

you. we'll our [Operator question And today Instructions] Sommer SunTrust. Tobey first take Thank with from

Tobey Sommer

business. addressable could international release, in the you was market think wondering if cite and total that you. opportunity sense in what the to I you of a I what big just expansion international trying for wondering Thank press get was comment over more on expansion that to the implies kind is longer-term your company's you

Paul Johnston

to regard and that. Yes, about me so, Europe let Asia talk with

designing Asia, products the we opportunity are are States The consumer products Asia but electronics much least in of huge is. United we we've are the do consumer use fairly in in the manufactured small, So American Asia. of primary we are been products and the there. And we've fairly what of that is the that that and expanding think still opportunity so at what companies, that we in is there primarily had selling rapidly. most companies It's –

percentage could the we're they still grow part we offices company. it's infancy we and over it's because company, the fast get additional offices, in in but very of a Our very can much there. what substantially of very small our do a Today, growing

at look a I when think I it's different. Europe, little

that's in focused Europe chemicals, food our Europe that be – primarily had on But for solid bit that the in services about that than to we've I gives our that I opportunity. located a a what think very, regulatory know you engineering And is around recently continues UK, and lot us. environment growing and half we double-digit of of talk part that Europe. and more in the chemicals a – practice that little grower the on the very business is a that we're been bringing of think more Continental doing to that

electronics, all into turns the in Europe these around opportunity get great as see Asia product being engineering we that but very as always consumer years, clients interested the think litigation products, was America, medical things stronger out we in States our so new as – are didn't development reality that Europe. help being in services of to as well didn't and as and devices, kinds expand great we the consumer many the it because For products reactive a thought we we that in of as is our into think so opportunity here about United

market Exponent we've in, So existed – university that in use we overall how little talked a professors services we're the really new always addressing business side, exist reactive on clients our of our about very different how or or to the been about because were used big were part Federal always there in bit didn't had a how I've before the Analysis formerly difficult has before time in past created. that way. is Associates like companies creating

of thing of have and forth of of the the we a some we're new to where we major areas. with involving provide consumer given can our range same think stuff I seeing things level companies a kind on assist the to data of quality industries, the quality kind of whole expertise expertise of so that electronics products have and

opportunity a and is So firm. of out a expanding getting more the for very globally we big, United that States very big the think

Tobey Sommer

it already what sales do as out out, has yet, for impact do have which the profitability. different industries effort? enterprise-wide how kind may kind of the to in you been describe the describe kinds you’ve don't your able to been be effects where has gestate I What take any way rolled long for specific the of growth us? sort you wondering on of you've examples the to coordinated for the And it of to have for think you Thanks. impact those if of for it on business rolled practices was new you

Catherine Corrigan

quantify it's because difficult time area sort a to along is are team using. is do with believe executing this infancy say that I our know much of at in this beginning increasing we're that I are But are along, our still that demands of the the would approach of lot this there capturing We electronics believe you regard how of I that although we're the because where as of offerings we in marketplace. that, job demand of an so standpoint that describe to doing better Yeah, know and kind process. we with probably effort. a industry from you of it very in far the Consumer would on furthest we

different, this, what things we a there each However fits as that one size where is industry are for we we're deploy and – all. is learning not

is on from the and let's the that. those us. development best continuing to those what what let's device in deal medical apply industries doing of and doing a actionable are think the as process for translating the I and electronics focused we into process take – process where that utility here let's side marketing into I feel side, So trends really we say though we in one of practices the say learning say and we're trends opportunities great are consumer are and learning a are we can the capabilities from identifying and identify the those

excited point. the very that am and believe quantify I tough an about impact be on do that having business. it Tough to will to, So this at

Tobey Sommer

you, Thank Catherine.

If could you this impact, at for the greater on the side the from between were point, to initiative? assess your proactive side you expectations or delineate, reactive impact this

Catherine Corrigan

initiative toward this say, is but oriented proactive I exclusively, not really so primarily Yes would services. our

mind that Now is, the we our leverage part proactive to of in process here course, bear reactive build that that work. experience of

identifying very way gone to this the the offerings to the different, be service relationship, the side business proactive very look proactive primarily involvement is So historically industry have believe, And side. of the need on really we we I is in trends where But side. we understanding of from the and is like. certainly business. tool and the terms of reactive a the a intentional those of It's market with what driving client there that see it an regards reactive side to

that drive to proactive try to focus a much very it's So

Tobey Sommer

me. Thank you. Last question from

to outlook emerge? describe the could projects, other that Given was you the I you and you're if as to much other large for similar able curious, And the take Thanks. capacity on project you delineate projects, what's have, so for large them? they

Paul Johnston

feel client to we are that so Yes, request. we don't limited respond to capacity a

hallmarks not say the But we more one responsive. company not might it's sometimes If a it's people, for XXX hours, I mean work a certainly respond. obviously, think XX that are while comes along I hours. do to we like And consultants, theoretically client very you the time typically Over I of but longer of XXX add is, clearly that. something, the it's that's company. with a week. be responsive to that, are very in we have hours for we

can a spike up. short time we period, So always in

with think know, had our are large that quarters but always have large project, years likelihood we to been regard here. of I or we've I not, at We things the the have there projects, that, play several more nine the company last over them. leading don't

there it large wrong products of – have projects than problems the in that the to their in some is think fact issues be media you are around The so are number The terms are faster large everything, bigger, huge. the the out that used things there quickly to make of much past. like amount product they bigger. likely, getting respond companies going have I because and social more of

are of and making their So products very we more more I Companies more example. to more responding the interdisciplinary that it. I think between products. sure when that, to that bigger carefully, evaluated finally, has ahead issues. their opportunities, means I their really The and have you're and the more think, become And tends for really I time. customers leads lot in broader and of Exponent factors a on we a we, fact spending design aspect that then tackle think, reputation can the reactive human things. capability, way, of some And of think, drive they are company, that And interaction

larger have At of So The for more is I you bode time, company all projects. to the that. balance getting bigger. think, same those

projects have at high-performing – very the a we very the feel the and to to us of So But continue base a abilities that involving special the certainly needs to on quite have we engage companies have sometimes to large the projects. have X% the get bit bigger be client firm. that

more long to we get X%, project be think now large may to of time will something important X%, projects we continue revenue X% is off just to us project. we right It's for X% the that come. revenue get on, more many of a So then

Tobey Sommer

Thank you very much.

Operator

Tim from hear we’ll Blair McHugh Company. William & with Next

Tim McHugh

to QX guess, that. comment any have follow from to at The at large the you Not QX. stepping magnitude on what sense I the Do up where you're or for about quarter? client but degrees just for thanks. and down in harp first stepping Hi, again up saying of the little second quarter this the on point back projects, relative and in a you're bit to,

Paul Johnston

an Well, and done, I we idea you think to give what kind on exactly of kind this. about where just we've of Tim, are

the We have of contracts through much quarter. second

pretty that good idea will so X% And that that we a X% have to it be have indicated. we in

back In they course, we can visibility have fourth sometimes a they good think quarter the quarter. lot quarter. not on is forward the or will why got again are we data this ramp people the to in have second things of quarter, looking in the have based delay getting, we quite Of but really might with pretty which it to fall stall on they third and that change, what contract in the is in we clients, discussions data, but quarter know it are get a the the up third third something or forever, going plans

the based they're outlook discussions and extensive, have the giving we've So fourth third which but we're not in had sort our of the client, is on understanding of with quarter been contracts.

Rich Schlenker

far don't would quarter. as point say the it expect that be probably to at scale, I this much quite as first time, as as in in and Yes,

what Something did. relative to we

beyond particular there that we this and year do be other the will last step – was we're area in there this about strong and that it broader And We that particular feeling it there. the – time. this in study and quarter that eventually our out will We're Paul eventually, on we talking is or X% somewhere step I down. X% X%, and between in are we somewhere going that, X% third But this not for that as be project opportunities The will really other think, working to or be point work, out or very look was it think or down off. client industry. many products this on, expect will tail a X% there – be X%? to certain Is that know consumer at X%

Tim McHugh

now And a size year. whether to on I project? feel elaborate Or there whether sense project the a year? sustainable you a bit differently you this next that guess, to like little start about a have I do runs to likely you know – is of that, it the probably more or can't not of this for guess it's But close does say

Paul Johnston

there a chance won't year. close in think the it I to is X% don't run think next a it that I will very be in But good area.

out may as I in called size projects side where X% below we that we've X%, but to a that typically think it may the that. be not large project, fall

Tim McHugh

vehicles, some business. driven autonomous accidents the a I positive thought would've we being accident on your for guess I personal impact historically, given of I guess, having Okay. about as that happen.

Given spending, think – when the opportunity we can doing these well those that that business? you what around challenge we I things, when as guess, nature or decline vehicles, of proactive see about a your is is talk you're

Catherine Corrigan

the high-profile these involving how regard public technologies, conversation community. to is incidents autonomous should What ability implications conversation on those policy So driver? And part an roadways? how out? implications test any been not It's finding vehicle are driver-assistance safety that driving with those the our around we rolled to are be it the across their to all within the what commenting it's in has ways – are a it's is opportunity. questions be – in And finding their in we conversation clients’ house on are safety to driving stakeholders. with real of with the and are all the client of What vehicles And involving regard is the are and And interdisciplinary but technologies. driving particular raising going that conversations. prove terms fall of lot questions mean, absolutely recently we manufacturer the well very I able of capabilities. community extremely our event, of regulators then out to our there which

We terms regulatory have of cetera. expertise, we we have expertise, have that the piece accident the of in the expertise, reconstruction-related et sensor-related

a general unfortunate, as helpful proposition, to while mean, I yes, of these events, drive our kinds do that incredibly activity so, And is business.

Tim McHugh

it. how more then And XXX guess be basis I than, view, I previously, the – up Got I seems did like revenue I that guess, this the to thought project lastly, it given, guess, number, – large year. be that would going just this how and add like, your your favorable much environment large I is changes, I if would've you of points is other market versus for I versus expectation? guess guess, is changed, guidance trying describing project, understand large this the different of guess, has improved. you're sort project excluding Or I'm with four some underlying the the review to business the than three or months broader that ago, I

Paul Johnston

has broader do I think lot with a it the market. to

the take what of the project growth rate away growth versus size And XXXX big comparison If first the was quarter Rich of – the first a was, quarter in a XX%. shy large in project. of project XXXX, I was if think, do the that the you was – of the X.X% of difference mentioned you that little

I we you have, I certainly, think, confidence the underlying And business. well. is, business really momentum around about a think underlying I that the good growing there. can we The think of So quite degree feel see we have

Tim McHugh

Okay. Thank you.

Rich Schlenker

talk is the story, really, the focus a the actually, this big sometimes know follow-up big too that It on the the quarter, but much part we just of it but Yes, is is to not the almost about project, not I story. story of project.

Operator

from Cantor Joseph Foresi Next, Fitzgerald. we'll from have

Joseph Foresi

Catherine it's with again. been Paul, you congratulations, Hi. great and working

Paul Johnston

Thanks Joe.

Joseph Foresi

you conclusion seem the Just the the to I What the mean, natural has be revenue? to may guidance strengthened on you're those upside was answer. be implying be it part of human think, kind that that the and the across-the-board previous demand drove factors but would things, of to in your I surprise side work, of alluding in quarter.

can about bit a was? maybe the exactly So you talk surprise what little

Paul Johnston

quarter Look, into first basis, you compare first a was, coming to that our if had. relative on were the quarters was of we the quarters weakest was that four first quarter the expectation all, of the last four the year,

coming was quarter. on our quarter had that with the XXXX, first back was, expectation So going that year-over-year we be momentum last enter year, half be to of was we comparison strongest our the as through, basis the a

coming that to high double human factors ended the up clearly be that had of up even for thought would bit but year, We We we – couple into expected a large quarter. we sort low larger percent in first the with stronger. knew project the to it than stepping being we be little the single knew down, going of digit was there, We to quarter expected be to be there. range was it going

and some had up of on carrying a project the business the the good we So ended through beat on out share get large underlying We of we of that fair built-in. expectations momentum there. did

the and had to relative projects we business. underlying shared between was it going large So on what

Joseph Foresi

Got it.

dictated just year? it, think margins where of guidance. are be And margins wanted performance brought our the to the so how fairly on to costs they see, think quality the end top is and this you've will and I margin about we up should obviously, solely if But year because size the any the for end there The of the about revenues at – line? from of based upside static other or margin and way

Paul Johnston

margin utilization. the of by is part the large a Yes driven

have and and get your not amount them utilized number, but of You revenue stuff staff, can go of a and bunch kill margins add there. your huge

be in we to what basis we that will going will margins we've play utilization points that that down to fact X% that driven to there. think that have is our indicated So are the decline would out be X.X% that believe of XX that XXX the we out

we little cost because So the that saw a did we year. – like last a with end quarter in first you here, up had managers’ meeting over what

of a quarter the not first second principals a this meeting will as year, much the between bit, which ago, will third had meeting managers fourth quarters end quarter. in as in rise We having those the we but year and and little a up

that are XX has down out those of call But utilization X.X playing really expectation it, into So of points will that swing to it few, driven basis percentage X points. be it a it.

Joseph Foresi

seem the then automatic have obviously, my are side, recent And it. up. and and those Got questions. with technology natural disasters last picked other came sweet to question spots in of some showing news and the on your and the The driving up be to seems accidents up cars, even red-hot

them larger in become I the question up largest rolling you off. about you because talked become if you driving about you projects? up be working we describe on can step the know may are see my Thanks. may you're other what are you how that get to on looking that there of So talked guess, and projects And way self you so, how think is, them demand? Are a involved I step looking is, cars. projects asking to better may that areas and larger

Paul Johnston

maybe and of in the But positives I that Catherine fuel X% on. or Paul add in the revenues other near any going in to organization. term. or I are today of that off start see just want don't projects briefly X% see that on I a don't to quarter changing. going then I’ll see lots

activity in had world of that think business. going react, are observant And on I the that in there in the we going basis, your the year-over-year seeing on our first reactive quarter here, we still are lot the side. what in on is a a

business the proactive with in Our line growing business. was reactive

happens. disasters and continue products fires. is pretty automobile And there and natural the processes accidents. collapses bridge out It's these challenges leading really get floods It The to the complex, that construction what many to are issues got see to and are more everything question and that more is and and reliability on world. drives that across-the-board diverse. of So buildings which We've activities. other are from quite we continuing that robustly. to It's things around

think just like continues get complex – when continue to happen. XX And and years plus we more there, remain more ago founded, this as firm complex questions So years technology time. out ago become those still those what will over was that

Joseph Foresi

Thank you.

Operator

Sidoti. Our Riddick final question come with from Marc will

Marc Riddick

evening. good Hi

Paul Johnston

evening. Good

Rich Schlenker

Marc. Hi

Marc Riddick

could was general to around wanted little a the a sort on or increase wondering of in time comments you given touch around that. magnitude of talking recall there's where I to just product a what recall that? sense spend in little being that? complexity activity. if I'm threat just drove an Are I one of the wondering product get I any instigating bit about more of I product wanted if proactive at people looking product seen and underlying recalls maybe and/or cautious suppose we

Catherine Corrigan

through once process part that these of of of issues with desire really as things technically. these So are And with their what for the earlier recalls. the these by cause damage of is an the that assist drives reputation consequence engage them best terms also bottom advising the a way. one out, the desire get I process, that to these I of driving these various the authorities. in think clients, advise we as to outstanding is have think we in root to we is root that able that manage this the reputation the arises possible process well of And clients I and really in events very engaging that the the our the have to with us regulatory be particular a the cause business regard to ferreted company them to both then able is of manage clients potential mean, for

Highway are positively Safety National root bring about know to are Administration, very analysis. entities relationships, skill So but by about Product Traffic we of the community the you of those Consumer those the known for and cause you kinds Commission, we the out sought technical we that talk client the within Safety talk because you also

clients’ social things those of that I an age can news cycles XX-four-hour best things, the and that and as their reputation So manage them think desire they in to two to the us. plus media, drive those are

Marc Riddick

that being of basically existing expand relationship years suite in work guess XX maybe does area does years that sea a ones? And maybe different by sense your initiated I in new mean now will? ago, five if you even or end that way ago clients deeper versus I that with Okay. up

Rich Schlenker

compressively the it's to those actually organization big be culture happened what a think through the also these have think but hit is well and things suite, sea I all addressed. of that pretty And is And down changing understood come up firms. events. these issues clearly very series the the need we've sea pretty suite I of

think Congress, on. described, the publicity can of way deal you media, so that a Catherine things country, got this You think about but in ignition recalls, GM huge I there's shift Samsung social about in been want just the think that in not from with there’s and X variety can Note which, companies switch, And us. in as some in to cultural

Marc Riddick

you you. mean to one. Okay, you kind was then opportunities this talking but wondering you might that if country and for a I – if our from from kind excellent. that’s and that? quite about some sort some could will. of question, thoughts I broad-based the could general that from infrastructure picture But was deteriorating of of share you And last of if I see big maybe me know shared the of thing one if could things is some of sort I a itself folks different in time, sort needs present Thank as wondering I infrastructure. wondering was you more the

Paul Johnston

and I large their mean amount projects them. get in that's of being involved infrastructure reality. because certainly to is very so ones leads know well work problems, it it. don't that is we much killing I very we have overruns say that deteriorating think when I people. them, failures kind all is the in think for delays, the actually about certainly sort built own said many The it's us – infrastructure that I new infrastructure, of fair reality have cost of is deteriorating while to a that. They for Yes, really and infrastructure design cruel But new invariably not And

limited having various to it's regard and load potholes So more a general roads with can much capability they just much carry.

we get when don't lot this replacement a while is project. a the infrastructure out of We So deterioration. work really there get is work deteriorating, of

Rich Schlenker

have to is on. one had burry some would seen are and that really I the do time. over And but thought the infrastructure activities and not all with those not that other that's construction could activity closer level work has infrastructure, area gas of in to aging But that on are those we around an related going increased area have we where necessarily much – say we are structures to an pipelines of distribution

Marc Riddick

Okay. Thank you much. very

Paul Johnston

Thanks.

Operator

conclude will participation. conference that you today's call. And your Thank for

You may now disconnect.

Exponent (EXPO) 19 Apr 182018 Q1 Earnings call transcript