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Exponent Reports Second Quarter 2009 Results
Date:7/22/2009

MENLO PARK, Calif., July 22 /PRNewswire-FirstCall/ -- Exponent, Inc. (Nasdaq: EXPO) today reported financial results for the second quarter ended July 3, 2009.

For the second quarter of 2009, total revenues increased 11% to $60,862,000, as compared to $54,956,000 in the second quarter of last year. Revenues before reimbursements increased 3% to $52,429,000 as compared to $50,801,000 in the second quarter of 2008. Net income was $6,025,000, or $0.40 per diluted share, as compared to $5,793,000, or $0.36 per diluted share, in the prior year period. EBITDA(1) increased to $10,938,000, as compared to $10,148,000, in the second quarter of 2008.

For the first half of 2009, total revenues increased 8% to $120,658,000, as compared to $111,216,000, in the same period of last year. Revenues before reimbursements increased 4% to $107,360,000, as compared to $102,823,000, in the same period of 2008. Net income was $11,783,000 or $0.79 per diluted share, as compared to $12,140,000, or $0.76 per diluted share, in the prior year period. EBITDA(1) in the first half of 2009 improved to $21,350,000, as compared to $21,119,000, in the first half of 2008.

"We are pleased with our overall performance in the second quarter, especially considering the general macroeconomic climate," commented Paul R. Johnston, President and CEO. "We continued to increase revenues and effectively manage our cost structure. We had good performances in our defense technology development and electrical practices, as well as our health and environmental science groups.

"For the second half of 2009, we believe the demand for our services will remain relatively resilient in spite of the economic downturn. However, due to the tight corporate spending environment we are cautious about seeing an increase in short-term demand. Additionally, we have been directly impacted by the bankruptcies in the automotive industry. As a result of these factors, we expect revenues before reimbursements for the full year, 2009, to be approximately flat with last year. As a reminder, in 2008 we had high product sales in technology development, a favorable foreign currency exchange rate environment, and an extra week in the fourth quarter.

"We remain optimistic about our future. Over the long term our consulting services will continue to be driven by products and processes becoming more technologically complex and society's demand for them to be safer, healthier and more environmentally sensitive. We believe that Exponent's differentiated market position as a multidisciplinary engineering and scientific consulting firm with unparalleled technical expertise and experience will allow us to translate these opportunities and market drivers into long-term shareholder value," concluded Dr. Johnston.

Today's Conference Call Information

Exponent will discuss its financial results in more detail on a conference call today, July 22, 2009, starting at 4:30 p.m. Eastern Time/1:30 p.m. Pacific Time. The audio on the conference call is available by dialing 877-941-2068. 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 800-406-7325 and entering reservation 4117488#.

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 90 technical disciplines to address complicated issues facing industry and government today. The firm has been best known for analyzing accidents and failures to determine their causes, but in recent years it has become more active in assisting clients with human health, environmental and engineering issues associated with new products to help prevent problems in the future.

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 the possibility that the demand for our services may decline as a result of changes in general and industry specific economic conditions, the timing of engagements for our services, the effects of competitive services and pricing, the absence of backlog related to our business, our ability to attract and retain key employees, the effect of tort reform and government regulation on our business, and liabilities resulting from claims made against us. Additional risks and uncertainties are discussed in our Annual Report on Form 10-K under the heading "Risk Factors" 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.

(1) EBITDA is a non-GAAP financial measure defined by the Company as net income before income taxes, interest income, depreciation and amortization. EBITDAS is a non-GAAP financial measure defined by the Company as EBITDA before stock-based compensation. The Company regards EBITDA and EBITDAS as useful measures of operating performance and cash flow to complement operating income, net income and other GAAP financial performance measures. Additionally, management believes that EBITDA and EBITDAS provide meaningful comparisons of past, present and future operating results. Generally, a non-GAAP financial measure is a numerical measure of a company's performance, financial position or cash flow that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with GAAP. These measures, however, should be considered in addition to, and not as a substitute or superior to, operating income, cash flows, or other measures of financial performance prepared in accordance with GAAP. A reconciliation of the measures to GAAP is set forth below.

                                 EXPONENT, INC.
                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
              For the Quarters Ended July 3, 2009 and June 27, 2008
                                   (unaudited)
                      (in thousands, except per share data)

                                         Quarter Ended      Six Months Ended
                                        ---------------    ------------------
                                        July 3,   June 27,   July 3,  June 27,
                                         2009       2008      2009       2008
                                         ----       ----      ----       ----

    Revenues
    --------
      Revenues before
       reimbursements                 $52,429    $50,801  $107,360   $102,823
      Reimbursements                    8,433      4,155    13,298      8,393
                                        -----      -----    ------      -----

        Revenues                       60,862     54,956   120,658    111,216
                                       ------     ------   -------    -------

    Operating expenses
    ------------------
      Compensation and related
       expenses                        34,954     33,197    72,800     66,707
      Other operating expenses          5,309      5,588    10,586     11,016
      Reimbursable expenses             8,433      4,155    13,298      8,393
      General and administrative
       expenses                         3,227      3,207     5,859      6,196

                                       ------     ------   -------     ------
                                       51,923     46,147   102,543     92,312
                                       ------     ------   -------     ------

        Operating income                8,939      8,809    18,115     18,904

    Other income
    -------------
      Interest income, net                200        463       434        965
      Miscellaneous income, net           898        355     1,056        290
                                          ---        ---     -----        ---
                                        1,098        818     1,490      1,255
                                        -----        ---     -----      -----

        Income before income taxes     10,037      9,627    19,605     20,159

    Income taxes                        4,012      3,834     7,822      8,019
                                        -----      -----     -----      -----


        Net income                     $6,025     $5,793   $11,783    $12,140
                                       ======     ======   =======    =======


    Net income per share:
    ---------------------
      Basic                             $0.43      $0.38     $0.83      $0.81
      Diluted                           $0.40      $0.36     $0.79      $0.76

    Shares used in per share
     computations:
    -------------------------
      Basic                            14,167     15,086    14,129     14,966
      Diluted                          15,013     16,100    14,998     16,050



                     EXPONENT, INC.
         CONDENSED CONSOLIDATED BALANCE SHEETS
            July 3, 2009 and January 2, 2009
                      (unaudited)
                     (in thousands)
                     ==============

                               July 3,      January 2,
                                2009          2009
                                ----          ----
          Assets
    Current assets:
      Cash and cash
       equivalents           $39,109       $32,598
      Short-term
       investments            12,953        24,772
      Accounts
       receivable, net        73,405        62,208
      Prepaid expenses
       and other assets        8,529         6,275
      Deferred income
       taxes                   4,845         4,455
                               -----         -----
        Total current
         assets              138,841       130,308
    Property, equipment
     and leasehold
     improvements, net        30,350        31,371
    Goodwill                   8,607         8,607
    Other assets              15,917        12,804
                              ------        ------
                            $193,715      $183,090
                            ========      ========

          Liabilities and
           Stockholders'
           Equity
    Current liabilities:
      Accounts payable
       and accrued
       liabilities            $5,369        $6,536
      Accrued payroll and
       employee benefits      30,000        35,528
      Deferred revenues        7,213         6,171
                               -----         -----
        Total current
         liabilities          42,582        48,235
    Other liabilities          7,734         4,968
    Deferred rent              1,515         1,793
                               -----         -----
        Total liabilities     51,831        54,996
                              ------        ------

    Stockholders' equity:
      Common stock                16            16
      Additional paid-in
       capital                80,876        72,734
      Accumulated other
       comprehensive loss       (387)         (345)
      Retained earnings      132,788       127,127
      Treasury stock, at
       cost                  (71,409)      (71,438)
                             -------       -------
          Total
           stockholders'
           equity            141,884       128,094
                             -------       -------
                            $193,715      $183,090
                            ========      ========



                            EXPONENT, INC.
                        EBITDA and EBITDAS (1)
         For the Quarters Ended July 3, 2009 and June 27, 2008
                              (unaudited)
                            (in thousands)

                            Quarter Ended        Six Months Ended
                           ---------------      ------------------
                         July 3,     June 27,   July 3,    June 27,
                          2009        2008       2009        2008
                          ----        ----       ----        ----

    Net Income          $6,025      $5,793    $11,783     $12,140

    Add back (subtract):

      Income taxes       4,012       3,834      7,822       8,019
      Interest
       income, net        (200)       (463)      (434)       (965)
      Depreciation
       and
       amortization      1,101         984      2,179       1,925
                         -----         ---      -----       -----

        EBITDA (1)      10,938      10,148     21,350      21,119
                        ------      ------     ------      ------

      Stock-based
       compensation      1,649       1,759      4,744       4,626
                         -----       -----      -----       -----

        EBITDAS (1)    $12,587     $11,907    $26,094     $25,745
                       =======     =======    =======     =======



(1) EBITDA is a non-GAAP financial measure defined by the Company as net income before income taxes, interest income, depreciation and amortization. EBITDAS is a non-GAAP financial measure defined by the Company as EBITDA before stock-based compensation. The Company regards EBITDA and EBITDAS as useful measures of operating performance and cash flow to compliment operating income, net income and other GAAP financial performance measures. Additionally, management believes that EBITDA and EBITDAS provide meaningful comparisons of past, present and future operating results. Generally, a non-GAAP financial measure is a numerical measure of a company's performance, financial position or cash flow that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with GAAP. These measures, however, should be considered in addition to, and not as a substitute or superior to, operating income, cash flows, or other measures of financial performance prepared in accordance with GAAP.


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SOURCE Exponent, Inc.
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