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Q1 2013 Earnings Call
April 17, 2013 4:30 pm ET
Erica Abrams - Co-Founder and Managing Director
Paul R. Johnston - Chief Executive Officer, President and Director
Richard L. Schlenker - Chief Financial Officer, Principal Accounting Officer, Executive Vice President and Secretary
Timothy McHugh - William Blair & Company L.L.C., Research Division
Joseph D. Foresi - Janney Montgomery Scott LLC, Research Division
Tobey Sommer - SunTrust Robinson Humphrey, Inc., Research Division
David Gold - Sidoti & Company, LLC
Previous Statements by EXPO
» Exponent Inc. Q4 2008 Earnings Call Transcript
» Exponent, Inc. Q3 2008 Earnings Call Transcript
» Exponent Inc. Q2 2008 Earnings Call Transcript
Thank you. Good afternoon, ladies and gentlemen, and thank you for joining us on today's conference call to discuss Exponent's first quarter 2013 results. Please note that this call is being simultaneously webcast on the Investor Relations section of the company's corporate website at www.exponent.com/investors. This conference call is the property of Exponent, and any taping or other reproduction is expressly prohibited without Exponent's prior written consent.
Joining me on the call are Paul Johnston, President and Chief Executive Officer; and Rich Schlenker, Executive Vice President and Chief Financial Officer of Exponent.
Before we start, I would like to remind you that the following discussion contains forward-looking statements, including statements about Exponent's market opportunities and future financial results that involve risks and uncertainties, and that Exponent's actual results may vary materially from those discussed here. Additional information concerning factors that could cause actual results to differ from forward-looking statements can be found in Exponent's periodic filings with the SEC, including those factors discussed under the captions Factors Affecting Operating Results and Market Price of Stock in Exponent's Form 10-Q for the quarter ended March 29, 2013.
The forward-looking statements and risks stated in this conference call are based on current expectations as of today, and Exponent assumes no obligation to update or revise them, whether as a result of new developments or otherwise.
And now, I would like to turn the call over to Paul Johnston, President and Chief Executive Officer of Exponent. Paul, please go ahead.
Paul R. Johnston
Thank you for joining us today for our discussion of Exponent's first quarter of fiscal year 2013 results. As you know, from our first quarter press release, we posted better-than-expected performance overall. Net revenues increased 4% to $69 million. Total revenues were $72.6 million as compared to $72 million in the same period 1 year ago. Net income in the first quarter was $8 million or $0.56 per share. Our EBITDA was $14.8 million.
As we discussed with you last quarter, we started the year unusually slow, but our pace picked up significantly as the quarter proceeded. We received some additional follow-on activities related to major assignments and continued to see a steady flow of new work. This resulted in revenue growth, solid utilization and better-than-expected EBITDA margin.
In Defense Technology Development, product sales were down year-over-year, while the remainder of the business was relatively flat. For fiscal year 2013, we still expect the impact from the sequestration and the planned reduction of forces in Afghanistan to have an impact on our Technology Development business overall. Exponent had notable performances in our electrical, thermal sciences, biomedical engineering, human factors and engineering management and construction consulting practices.
We are pleased with the demand for both reactive and proactive services across many industries. In the utility industry, we are investigating pipeline failures and helping improve the integrity management process. In the consumer electronics industry, we are testifying in intellectual property cases and evaluating new designs. In the medical device industry, we're evaluating claims of product defect and testing new product reliability. And in the oil and gas industry, we are assessing environmental and health exposures and analyzing new drilling technologies.
As we look to the remainder of 2013, we remain optimistic about our business and believe we can continue to expand our unique market position in assessing the reliability, safety, human health and environmental issues of increasingly complex technologies, products and processes.
I will now turn the call over to Rich for a detailed description of our first quarter financial performance.
Richard L. Schlenker
Thanks, Paul. We are pleased to have delivered better-than-expected results for the first quarter of 2013. Revenues before reimbursements, or net revenues as I will refer to them from here on, were $69 million, up 4% from $66.5 million 1 year ago. Total revenues for the quarter were $72.7 million as compared to $71.9 million in the same period in 2012.
Net income for the first quarter was $8 million or $0.56 per share as compared to $8.2 million or $0.57 per share reported 1 year ago. Our diluted share count decreased to 14.1 million from 14.4 million in the same period last year as a result of our active share repurchase program.
EBITDA for the first quarter was $14.6 million as compared to $14.8 million in the same period of 2012. EBITDA margin, on a percentage of net revenue basis, was 21.2% as compared to 22.3% in the first quarter of 2012.
In our Defense Technology Development business, net revenues were $3.9 million. We had $200,000 in net revenues from product sales in the quarter as compared to $900,000 in the first quarter of 2012. As Paul discussed, our consulting services in defense remained pretty flat, but we continued to be appropriately cautious about the pipeline of activity given the defense budget cuts and the plan to reduce troops in Afghanistan. At this time, we are not aware of any additional product sales orders.