EXPO - Earnings call transcript Q1 2019

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Operator

Good day, and welcome to the Exponent First Quarter 2019 Earnings Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Whitney Kukulka. Please go ahead.

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

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

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

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

Catherine Corrigan

net X% per I of start and In will today and today's off delivered results and will XXXX, everyone. the we XXXX, Paul to by first question-and-answer afternoon, the our of good $XX us more $X.XX of revenues joining million grew quarter a open first provide questions. for share. Rich then call for and Exponent detailed the quarter for diluted our call. will Whitney, performance. be earnings you, review portion Thank expectations will financial discussing of

from positive of The our first on built XXXX. quarter momentum XXXX

large we prior line geographies. last the We quarter across growth concluded achieved comparison growth despite industries, are user and the our strategies our on revenue with practices, low the in year-over-year expectations, study, executing In single-digit to which year. challenging to drive third due

data foundation of Exponent. formed For what over has we at XX years, do the analysis

of builds and course, more and continuum expertise. analysis leverage we deep Of that data history Decades a and exponentially. pioneer the are Exponent can the increased a driven both has are volume dramatically are we that trends we have was The upon seeing complex by data assessments. subject solutions matter our accident and systems ago, in of today now data risk initiatives underway

market We leader continue in be a areas. these to

expand on interactivity of As we reach, capitalizing increasingly we our are a complex and the humans technologies. set opportunities broad between involving

to success led expanding the and systems. our the look artificial move. by cases exceptional for our inform large human on in rely through technology as factors unlock the data use our leveraging of humans are seek on Clients the clients to reach as experiences home, and of our power data while practice, user these new they workplace, intelligence to across We study create at

first XXXX. of supplements period quarter the first to net the engineering unparalleled provide products transportation Exponent’s to be batteries growing Exponent drones, continues source leveraged robots, industry, Exponent. compared need and its the Our who in industry clients. Company's including Net grew revenues segment solutions as represents that being expertise expertise This cars, a as old transportation to is in knowledge approximately a consumer battery planes. they in and industry in for mobile XX% bikes, the trucks quarter new team in consumer strength same in in advice other of technologies for clients products scooters, scientific integrate platforms, have deep battery for X% for into revenues. interdisciplinary this and with and segment the

Phoenix team user noteworthy engineers During consulting factors, as advising practice infrastructure science, in practices. leveraging this in Company’s human collect materials The thermal and the well as engineering, scientists the laboratory the factors human construction interdisciplinary of is clients. segment global performances regarding structural science, quarter, are had research structural material and thermal utility scientists, clients for footprint integrity diverse to datasets management. Exponent’s its

in and revenues. consulting in with XX% Environmental cutting practice successfully related year of segment our commitments and Our mature experience and of large PhDs our new construction at This segments declined us grew highly healthy to period fewer supporting was chemicals this factors priority offset approximately human a new and continued segment environment. Growth engaging practices quarter scientists and X% from food engineers PhDs compared and brightest of the scientists several technology. both by is issues XXXX. health on of high with of regulation first as growth projects. segment, our of to of international in engineering is combination first Company’s the chemical the practice. of in our to the differentiator. same best first as studies disciplines support backlog as leverage there quarter. assessed practices Exponent’s human Health headcounts wide on and the Exponent’s remain led at We were hire to edge Exponent represented a is arbitrations a billable a credentialed hours Net grow the range teaming net quarter revenues practice user to safety during experts in the the Within impact and this the key capital the the for Recruitment allows entered

stronger will increasingly time, teams health from lifecycle. across and safety higher across relationships its value. interdisciplinary address teams the this Exponent interdisciplinary strategy create with from client industry entire from associated design to multiple deliver R&D client domains integrated centric. Our quality deploys environmental are us problems becoming assurance, and Over even client teams product manufacturing This to complex more the to approach legal. to to allows technologies go-to-market

address shape technical complex will market of review issues. and performance Exponent’s detailed leading our working model position. business their We clients most to adaptable Rich a forward and more now business capabilities Rich? unique financial outlook. look Our to our provide with

Richard Schlenker

Catherine. Thanks,

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

revenues $XX revenues, Total For the as net first to from of up X%. million, refer were them revenues XXXX, total and net I will before million. and revenues were were reimbursements quarter hereon, or revenues $XX.X

per our of project, As quarter in X.X% large impacted revenues factors was expected, our the $XX.X the This year. same was year-over-year XXXX, share, $X.XX compared growth in human or the share period the was per which challenging first first or of as project third XXXX. diluted $XX.X million diluted comparison. in Net last by created quarter of for completed a was quarter in the $X.XX the net which million first income to quarter

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

granted zero nine quarter quarterly creates these of reminder, The months the the the X% were for to revenues in X.X% and primarily in EBITDA significant part a of in accounted our This X% in project for event XXXX. hurdle second, this fourth for later. the from in third, project released are shares net full-year first, net tax and benefit As XXXX. factors quarter. the the annually The revenues in as is program million. large first a in $XX.X the compensation quarter X% years of X% for us. human first March The four increased

compared year. the XX.X% of was result the For utilization as a billable quarter quarter, with prior expectations, first XXX,XXX the our partially to a were with conclusion for flat as our XX.X% project. first hours the This In previous in year-ago. of large change the line utilization is

Additionally, week more or extended time we as employees further two year the January. first than slower the experienced to as normal school a clients during into and took vacation start holidays

project the by For the to in the we which revenues This X% the X.XX% fourth net be points. will XXXX, the Year’s and the week, will and for approximately additional additional quarter holiday XX%, include will for the fourth on will vacations, week includes utilization which XX which be reduce the and an basis to XXXX fourth points XXX a by basis week year. extra quarter and expect New full-year XX XX% This the quarter. increase by for impact full-year associated week large utilization

expect our offices in utilization in this services. down we our be to mass the up year, proactive practices employees Technical grow will utilization long-term increase critical to and our XXX, quarter continue X.X%. Although, and build more we equivalent were full-time as

were the remainder the This and from was hours We per for a of mix the the the rate for be approximately expect year majority annual change bill quarter approximately quarter. result last increase realized the X% of study hours year. as The was our rate increases of staff. billable more growth sequential junior headcount in to X%

increase to For the realized X%. the full-year expect X% year-over-year XXXX, rate be we to

the margin first revenue. basis decreased XX EBITDA net For quarter, of to points XX.X%

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

the as in first X%, and compensation of in XXXX. grew $XXX,XXX included a in adjusting in expenses, compensation compensation For deferred total quarter, loss million, after a for deferred $X.X of the expense quarter losses gains gain compensation compared of to

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

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

to of quarter. of operating the increased $X.X quarter. XX.X% per be $X.X million in XXXX, we other $X.X million to in to the the remainder expenses range first expenses million expect G&A For

the second of G&A end expected G&A be $X.X a the range the as range to XXXX, at year higher year. have the to meeting as $X.X the quarter. Exponent's period in tax of our for tax of the for will we For last million the to year. half awards, are of of X.X% rate in same expenses the million be this consolidated compared benefit was first for quarter share-based biennial managers XXXX, Inclusive X.X%

XX.X% XXXX, and our be full-year We to rate remainder approximately of the rate be tax our XX%. approximately expect for tax to consolidated

the our for negative which were expenditures paying million area $X.X million construction out Operating of for quarter Moving towards a bonuses cash taxes. quarter, as building. $X.X cash the was to flow Capital the Boston and of flows. million went new result a $XX of our

building. We expect million return the million complete XXXX new CapEx to be should CapEx to XXXX. in approximately as approximately in $XX $X we

reiterated quarter, equivalents and our cash intent $X.XX quarter the to Today, dividends and for million paid dividends. During announced quarterly the in in with and continue short-term first and cash quarterly a to million ended dividend Exponent investments. pay $X.X a $XXX.X payment we

Pacific it the XXXX. of at have increased time, critical first a to provide PG&E's that – operations. work year-over-year. services. be end and we PG&E receivables quarter, is XX management Chapter PG&E will with previously But power As safety of Gas In filed construction provides January reliable Exponent has of the same discussed, believes integrity We mission at the and announced to primarily community. bankruptcy the and accounts Exponent that of are paid. time believe at Electric the safe million for client PG&E XX, the $X assessment, for financing Exponent secured all to our bankruptcy our management, for services continued substantially the on firm.

offset business, the conclusion by to across momentum will large year. which positive partially project a challenging last the reflects due the year-over-year be outlook of comparison Our

XXX full-year, by For as single-digits to reimbursements compared the points to before grow now back Catherine to to basis approximately I XX mid-to-high the remarks. margin continue decline revenues we will basis to and for EBITDA closing to points expect turn call the XXXX. in

Catherine Corrigan

of and continue leadership. and ahead, a thought engineers top be environmental and reliability engage teams will through extensive development of array market issues. disciplines intelligence, range from As we with Exponent capability strengthen look to our confronted an clients scientists health, and broad will safety, industry

We model and have changing needs. anticipating client history business long an a of adaptable

as qualities firm. clients deliver create for these valuable our and solutions will to new opportunities we We leverage continue to to

sustainable year-over-year challenging face and we generate XXXX to completion the growth due confident large long-term our user study, While we of comparisons in to profitability. are the in ability

to We open the will Operator? now call questions.

Operator

Thank McHugh Instructions] go Tim Blair. you. William first to [Operator with We'll

Timothy McHugh

Hi.

the follow-up talking to you’re facility and success guess, for the a about on study to last I of kind on the trying Just engagement created user year. you the, capitalize bit want of –

as be studies elaborate level, So bit seem a how as user lot a of walk trying were there is that have a can specialized – you tell competitors would us versus go differentiated wouldn't client, do to when high in Exponent a how thought more, that kind you do how business? At maybe you that I – the what things of into do? you But does. and to be differentiate can you

Catherine Corrigan

address Yes. try me let that. Tim, so to

I think I the our practice. are that that These cite within would credentialed well factors exceptionally with is experience. human are the first the regard thing to capabilities folks user specifically underlies who science

cognitive not machine basically doing the is understanding the of is this what to a how but having they're is this psychology, understanding So the the neuroscience. is technology. responding reacting how only to person, deep person is And

work. of user in industry while the also we so – areas where there in are a about plenty of who are And deep specifically We area doing because talk there individuals that generally truly entities differentiated there are focused there knowledge. credentials will of are offering And exceptionally we out have that the are studies, speaking.

example, an deep for have domains. been is This our electronics. we where we across expertise where area work, multiple So growing have

able And factors bring we're there compliment to to multidisciplinary so expertise, to and deliver a the therefore, our client offering. experience the electronics in human

issues only user well. example, batteries the surrounding and safety and behavior – reality it’s the affects is use the of the health themselves, batteries as around virtual for those products, in user not and about health that the experience electronics the of So the the safety of the it but

see studies. as to a a we So really companies do it's differentiated we're not user achieve do about for bring having able example, space. it We highly where just into laboratory, can –

interdisciplinary only also expertise then that that bring Another right. we're to expertise safety not be exceptional understand We're deliver transportation human our say, example and factors able to let's automated our vehicles, of to leverage with the able interface, expertise our driver, would sort industry human-machine to but offering. safety

Timothy McHugh

good, was the mentioned significant slow the imply, a because Or doesn't was it was versus there Just overall That's I that you I week guess started? difference it change. trying the the just if then understand in a just timing helpful. to so started can quarter result ended And the Okay. there of meaningful ask slowly of two Rich, a way was but starts? vacations, of way it it or

Richard Schlenker

Yes.

So pick we're were even the much third not it we're did first of January. I weeks, would what couple say in the And that two we a fourth were of the – not and from than seeing first up still week still January strong weeks of but better at level.

quarter. So we activities in challenging think it still a built move quarter. up as we year move user I I through we And up to overcome think large as the of the definitely But comparison where study. the that last that other through because hurdle have to the we were picked

Timothy McHugh

margins, only X% X% guess, data maybe I down there, help little margins, me headcount data about the guess in And a and I Okay. the can you my down, with two Those just flattish X%, points, then being mind. wouldn't points usually compensation X% connected I up be or think guess, such up only bit. or being utilization and expense up, fairly

holding what much so so – up And why they are better?

Richard Schlenker

Yes.

the think a having first I little last flowing quarter, the look, quarter compensation few benefit ended number first some we So from through. and maybe being year's higher, a things up

that for have and the that timings – because in The of that. our with some to stock-based before in ended things up at time also talked being year-over-year some reason of type being amortized our first the being grant quarter. clause related the when of stock-based some just age we about compensation down of of of compensation We is we've

then difference that or in through X% is our out let's what – profitable to first quarter if vary of all were are second third the bit and compensation X% we X% growth how on in going as the side than headcount There that lower in the you'll grow you're that ended we're X%, the you'll say, to find type. the more probably to and call depending can the up from are that to than we're have that I growth a grow together, would going find X% other on mix relative or quarter that things and making, by that headcount That we X% of so getting wages. growth. X% in look things that definitely going it'll that the goes quarter Meaning maybe we benefit few is in combined. favor, would expect to realize that, a But $X.X bonus million is X% forward. would little So let's expect compensation

Timothy McHugh

Thank helpful. you. That’s Okay.

Richard Schlenker

saying junior side are increase flowing salaries more at as on on same is blended bill side. the that we through time, rate But on rate as hiring see sometimes we that the the we're staff also compensation

Timothy McHugh

Okay. Thank you.

Operator

Tobey next to Sommer with go we’ll SunTrust. And

Tobey Sommer

Thanks.

last As the your wanted business you're that and profitability? rollout client the on you industry are I've together about I of done teams of that periodically? for quarters, from what couple that? the impact And are to ask aspirations Where you're in impact Thanks. growth getting an your your seeing for on

Catherine Corrigan

Hi, Tobey. Yes.

reactive industries just focused laying side have client in finding directly of where to And even efforts legal our utilities. maybe client supporting, approach chemicals, at seeing What groundwork believe, approach clients business is areas. management in that, much through client we're look proactive growth the is at that side. that. our the to we industries know sort and at that I relationship on industry offering supporting but less services. the And work. what really to little of selling so electronics, are so the look proactively contrast look into is proactive is contrast we known those expand for that industry we're some our a in where where domains really this these So This we're better are we the well I'm work, seeing to us on in the side, for This proactive the within management toward very oriented is those entities of

in example, are on reputation different more could side. an process. let's a development, very areas areas. a We're this to and broaden phase relationship reputation reputation little That's those for transportation trying these say That's of stage a the historically a be proactive development gas, proactive strong or So been reactively. on the our oil of where have focused very

think to So folks using our battery that an expertise doing traction. we're Committees to pleased on we're client in I various that the for And so bring about client across technologies, seeing entities. these think we're with pleased Standards leadership, is us and about the to team see our I'm to I'm take think really out helping micro what transportation. example those trust give into develop mobility. approach to

So we're managing actively clients.

We are relationships. and some seeing some opportunities those more in growth

that Some relationship to getting of the that's more into in see we're as land about turning and engagements. feel I the these development of I that it. phase of basically are good closer the and actually lay that,

Tobey Sommer

Thank you.

additional it of about release. talk is different press You it your Thanks. sort and Is big how Could you it in I more guess, as early stretches applications stages you what batteries be? developed? fully to or remarks that did the it, closer across, in maybe could reference amount prepared think a is business

Richard Schlenker

Yes.

good integrates that on some with double-digit finding probably to is a plays of Maybe clients chunk a our is established batteries other number can that that. it account in work But would work different the more high low activities touching the number because that industries. talk just that's or about that's an do. I area in sort work think of we're of that a into we've Catherine a high bit growth platform of But single touches in look typically single been accountability how feel side we're new single-digit that where that batteries, that pin the larger why project we of on have where areas we've batteries is down. percentage doing it how of general probably for it in it generally of with is or a we're – even So the and But it's don't for little – we I in a we in. a an something then

Catherine Corrigan

Yes, right, exactly Rich.

what because entry the seeing new we're So of depth expertise, is an the technology, battery of point as that the into areas.

little in as know expertise that bit didn't where a micro of talked think companies is some space. us our that I batteries having about that with potentially perhaps great a able other engagement example in to bring Who that's a and we're mean I areas, regard mobility entities. with I So of first are of battery those challenge the to

the opener. focused ahead of sort that so able much ourselves sort technology, entities, in And And of electronics a it's technology. as Because reputation on keeping they these more we're battery many very curve of But able door do the to the doing to is truly in ahead of grow I in on what a the the been in area. what think of have transportation We're ourselves of teams. right? we've we're that keeping and curve

we are to that the the needs again be. multidisciplinary our to offer approach. ability anticipate will it's able So And changing to related what

vis-à-vis are grow initial are to issues So the it's that – the with the and the implications What batteries points. we’re entry issues being offering implications that of vis-à-vis safety then the what only but not of with issues. battery sort their the the electronics, regulatory is able that

Tobey Sommer

on in of expectation longer long-term XXXX we're tax years then if you back describe you. a could us lower for kind and far And Thank could project More where over period as range. the a maybe you this as we seen relative well? queue. the a Catherine, how to the you've Rich, in for at to questions middle as get exposure business rates large you sit Thanks. the end of or come juncture to for of

Catherine Corrigan

Yes, sure Tobey.

very of of I anticipate something recently have something project So It about is sort I another But as certainly view sorts could that of a I large large. still project is ended necessarily not projects. would as your relatively I the was these our to That we with question size conceivable large that regards it's and get view that mean, exceptionally to something see or that those. rare. into. exposure

that's I mean, are I anytime scale looking open mean think various drives obviously we're We philosophy can more gets to we regard say a have we certainly of about intends or with amount large when into envision kind that at. systems where expanding driving reach that potentially still where opportunities any engagements can various would that call could X% of you our I the areas data be larger, given drive technology, because that's home technology that automated whether would to out, look data to driving vehicles. we data important. relative something going but frequency and to data, automation the work, to the or X% around we that home reality that But do of that an drive are have that's environment data those. not necessarily increased clearly we thinking to in virtual that safety going I'm the going think that's scenario quarter,

Tobey Sommer

Okay.

Richard Schlenker

question the XX.X% anticipate tax those approximately quarters. a your to tax the of we tax again rate rate XX%. bring be to rate for the us full-year three three for Related will on quarters That remaining to for XXXX,

Tobey Sommer

you. Thank

Operator

Joseph to next go Foresi with we'll Fitzgerald. Cantor And

Joseph Foresi

we just not on Maybe doing doing still just going sounds trying the you to I'm you because us account? still first – about forward and does My on you're Is How you out in process getting is accounts going like PG&E. more get know some understand receivables paid paid I context. should payment however could accumulating It How I'm that accounts XQ. understood currently, question work lawyers work. doing this. you have I I receivables, work that? on to the work currently think if $X you're get – that we a by million Are Hi. and are just – or, color in should sure give in

Richard Schlenker

Yes.

There of bankruptcy. at the of is of your bucket that So were – those are there the receivables two buckets are that receivables. date outstanding

critical of $X have dollars in to allocated some get There going that been anything XX. out that receivables of are PG&E has don't paying some January is the as hope would million to paid. amount two critical announce for One that, of we would receivables PG&E XX. ways is are that in vendors are was had outstanding they So and on bankruptcy. January those that part that a – that today. on We but of handled that Those through vendors paying can’t participate process ongoing. and We process – are the

collect over the financial receivables is what hand, that being those PG&E and of all On as going in that expect time. substantially of remainder wouldn't $X by our would some is receive in the we financial, of to paid normal process in be the then of the why out would that process. to it other value believe there million the million all reflected been markets I bankruptcy $X The we has based still out that what said we receivables are that on

And But and than be get as little take normal longer the is that get will through it bit of So paid paid we some later we vendor. bankruptcy eventually process. a it hopeful out some of a likely. think to sooner We're that expect paid. critical

Joseph Foresi

Go Rich. ahead

Richard Schlenker

Yes.

January a forward, has course a XX For receivables. those in on are around course But with overall, sort are There's we're on of PG&E payable dealing things is to delay of forward, of number that in been the vendors. starting and few business that weeks of see same accounts from normal just work come a of lot department everything receivables their business. our sort as a in going being to fact a start plate. the They paid regular the of around.

because outstanding paid about by that elevated business we move now now. course then have rest are of us the forward. the receivables as are we normal of our So that right would been the million our receivables have And we have in for $X

So that's view to way the it. best

Joseph Foresi

But will obviously be it, not – hit the it. you a or Got $X recorded. could million, revenue would once that one then that's and be included receive quarter it in

Richard Schlenker

into revenue. that We substantially all of have recorded

back of those. against in those of reserve as some outstanding we bankruptcy essentially generated recognized work been We've that revenue those it those from for small even process, the receivables recognized has the were taken small of through a some at accounts So but of probability were done that XXXX revenue. – had majority not least being the the for receivables We and in a collected are amount through January.

Joseph Foresi

Is it. clear, just work Got but that accelerating you're being of which normal in is to business. And doing that course is paid be the right? now,

Richard Schlenker

That is correct.

Joseph Foresi

I pickup get make Okay. And then the work I would sure Is why fully before a that year? require two, understand it – anything deal the as is my anyways? accelerating? other I a at issues else? trying and work just I'm just the this. to in question a of sense Is there to reason the to off process this legal want of a business one get part just end just Or is normal tail course other there with to then maybe other

Richard Schlenker

Yes.

on and focus some management has been construction provided the side electric integrity Pacific long So their time done Exponent, management that into Bruno, services their on gas and XXXX, around integrity that work we've the over Electric well that side. incident business, to in the safety system around been management majority and of period improve PG&E on up such, The issues significant some integrity reason the had a PG&E management, the side. system that has is of San sort worked of as has to on of back was that been with And in services gas had gas been there's last believe Gas had of as lines and over over our been as The drawn although services. focus time. a lot integrity their system safety electric the the California a the over year. decade gas we've work of The that of and Exponent work the I the

on wildfires, concern expertise XX electric the gotten electric of and has that utility the – area side the fall from years We've been done of construction that practices Exponent in of In the back has a a side done we've and fact, electric and that, management and side well. years. management a years of of on focus entity of as we've wildfire really the more integrity something in safety our we've the what over around that lot industry to Clearly working related that and wildfire of work in work with system some a integrity on that is bit last over in. over the occurred electric events the of the little risk major it on lot worked lot

a of that feel industry to we around support services. position these good the PG&E types and particularly utility we're So in

Joseph Foresi

Got it.

Okay. just Then the This get here. from two of ones, comps other one. quick the toughest kind was better

zero. X% of X.X% to the through expect looking from with a said of you to in to lift X% gradually kind to back think Is that half of I way Should it? year numbers accordance the we fair those the at comps?

Richard Schlenker

it. Yes, way so look would be fair to that a at

Joseph Foresi

margins. a the think you've most So nine of Is this difficult that you driving we seems how have the months would I guidance, about is through back and question way out. touched business last XQ, there know I from the you through quarter, to just years outside tend more wondering be there's the and haven't only and of conservative then the it we left think seasonality but comp anything kind long of gone how have, I'm should about like because utilization you add to and the around think a and year, year, perspective? that to And start margin go utilization in you I Okay. half

Richard Schlenker

at into what with seasonality year through. our the to need Look, we've that that to in take and We laid out still XX% goes first account we when look there. improve the achieve the vacation the had and we utilization the through as I'll quarter to for that XX% we move that adjusted utilization Yes. call holidays

is come As We We've to you're had to or expectation second second aware along typically the the but tends work here there's quarter. we're that batter, improving the that's first times that's a bit. our made quarter first the be been quarter little utilized third best where is similar think quarter.

we comparisons we vacations But improved we've study. headwinds in think further view holidays that period. little should the quarter. got step first things normally fourth then in work coming bit quarter But as also that add into that from January the the little the year-over-year as we we As Again, move and summer the down slow. the and started in a months that that into the we quarter through we still to large the mentioned, a over on get off

us. quarter’s of We good. were things So are that the still think first those margins yes, ahead

a number step first some in things before, compensation a As from compensation noise benefited we bit. will think through they coming mentioned in little the a up stock-based there's I in lot numbers was of quarter those that that the – of

is guidance So given in guidance we utilization well. with we've that the given as line we've that the think that

Joseph Foresi

you. Thank Okay.

Operator

with And we’ll go Berenberg. to Sam next England

Samuel England

guys. Hi,

amongst of a hires been far the at which firstly, in the hiring this suppose, of had the give that so us an Just couple you of into could me, mix new QX, bits year? you you've idea specialisms I business

Catherine Corrigan

really been – So battery yet lot you recruiting human focused, factors, we've is a where about that for right? another from if seeing areas particularly very us a that Yes, standpoint. area talked an demand, The area we're think I've one. is is increased about important but in

mechanical, sciences seeing offering think marketplace multiple infrastructure and where my we're group, be wise, going my the practice disciplines, around combines mentioned there. you where be Now examples another I So particularly a demand. Those our think our across going that be my one about would goes really are consulting. construction area finding prepared some in in to unique strength when remarks folks. to going also sciences this consulting that's I right? That's the folks. across see thermal arbitrations my folks. electrical international We're That's to in around is that's I lot that in point expertise. of we I polymer of construction

that associated electrical, a mechanical, expertise doing around combining engineering projects, across with large right a is now. that hiring a of lot whole deep So practice that's with the as delay infrastructure et cetera. is That

of some done seeing as are those areas, just the most Not I broadly the where QX, we've we're those demand in but think in So areas. hiring.

Samuel England

suppose big the these for now quarters are you got of people that a Okay. in? projects, bringing getting couple I you hiring, on how Thanks. guys you're quickly out

Catherine Corrigan

couple and when folks day. years Well, be in first starting these I first Yes. was on projects days. of can a ago it back first the XX literally project I on their mean plus I remember came

utilization it up sort their exposure steady we not expertise But is issues ramped have Now PhDs, through projects. we're to subject very – to they their they matter state of great of – on much with obviously, don't deal immediately. in working them come but from a deep gain

And to by so get multiple and projects, to quickly types with early. them better, perhaps in look relatively work in in engaged in them them them even to projects projects, multidisciplinary the we an giving different principles we bring putting across them putting so firm develop them of opportunity

Samuel England

year. that thinking last for just growth in Okay. business about developing Thanks. international the XXXX wondered this And then in you're just business one I is how how and me.

Catherine Corrigan

Yes.

work. is area our food that chemical for I one So you would safety and cite there regulation

all relates a So that around issues to regulatory of industrial lot proactive chemicals. pesticides, that is the of is that around work –

based whether direction is and more stringent more more it’s that so not in mix is Asia, so the But environment, we that and regulations that such global, but regulatory definitely with stringent on these side over And that expansion that in be getting some and that, client seeing Europe We're as seeing the stringent. not the framework on it, described disputes going I the for have when expertise around demand the U.S. and demand large is cite thing the arbitrations. we're it's projects the of much the in that we international those is various of reputation less capital Europe or that for becoming the other top in chemicals, people driving is in more business. work The that the of may disputes, is particular on deliver. And they're of they're able global Asia, engineering really those because that value we're to in before, getting even though brought scale. the our would then regulatory whether exposure they're being a I again, of well. consultants you, and the as Europe see

So for internationally. area strength to continue I and an think us an will of that's been be strength, area of

Samuel England

Great. much. That’s from Thanks all me. very

Catherine Corrigan

You're welcome.

Operator

question. for time have We one more

Sommer Tobey with we'll So take SunTrust. our question last from

Tobey Sommer

Thanks.

stated Rich. out the we if project the follow-up growth a the numerical I it. underlying apologize strip you a large quarter year-ago? if for Just in What’s at topline

Richard Schlenker

No.

the X.X% the business first to large in So quarter of yes, our would so underlying year-ago, project level. that the revenues growth our a was bring XX%

Operator

your today's Thank concludes That you call. for participation.

Exponent (EXPO) 18 Apr 192019 Q1 Earnings call transcript