Exponent, Inc. (NASDAQ: EXPO) reported Q1 EPS of $0.42, $0.06 better than the analyst estimate of $0.36. Revenue for the quarter came in at $99.03 million versus the consensus estimate of $98.48 million.

• Total revenues and revenues before reimbursements grew 3% in the first quarter of 2019.
• Total revenues were $99.0 million, as compared to $96.5 million in the same quarter of 2018. Revenues before reimbursements were $93.4 million as compared to $90.7 million in the same period one year ago.
• Net income was $22.7 million, or $0.42 per diluted share, in the first quarter of 2019, as compared to $20.3 million, or $0.38 per diluted share, in the same period of 2018.
• The tax benefit for the classification of tax adjustments associated with share-based awards realized in the first quarter of 2019 was $5.7 million, as compared to $3.9 million in first quarter of 2018.
• Inclusive of the tax benefit, Exponent’s consolidated tax rate was 2.7% in the quarter, as compared to 9.4% for the same period last year.
• EBITDA1 increased 2% to $23.9 million, as compared to $23.5 million in the first quarter of 2018.
• In the first quarter, Exponent paid $8.2 million in dividends and closed the period with $171.8 million in cash, cash equivalents and short-term investments.
• Exponent announced a $0.16 quarterly dividend payment and reiterated its intent to continue to pay quarterly dividends.

“Exponent’s first quarter of 2019 built on its positive momentum from 2018. In line with our prior expectations, we achieved low-single digit revenue growth despite the challenging year-over-year comparison. We are executing on our strategies to drive growth across the business, leveraging the success of our large user study led by our human factors practice, and expanding our reach across new use cases as our clients look to unlock the power of data to inform artificial intelligence systems. Our expertise in battery technologies continues to be a source of strength for Exponent, as we are seeing expansion into mobility devices. We are also experiencing increased demand for integrity management consulting related to electrical infrastructure, and engineering and construction management expertise on large international capital projects. We expect continued strength in these areas as we move through 2019,” commented Dr. Catherine Corrigan, President and Chief Executive Officer.

“Exponent increasingly deploys its interdisciplinary teams across multiple industry domains, allowing us to address the complex problems associated with integrated technologies. Our unique capabilities and adaptable business model shape Exponent’s leading market position. We look forward to working with our clients to address their most complex technical issues,” continued Dr. Corrigan.

Business Outlook

“Our outlook reflects positive momentum across the business, which will be partially offset by a challenging year-over-year comparison due to the conclusion of the large project last year. For the full year, we continue to expect revenues before reimbursements to grow in the mid- to high-single digits and EBITDA2 margin to decline by approximately 75 to 125 basis points as compared to 2018,” commented Richard Schlenker, Executive Vice President and Chief Financial Officer.

“As we look ahead, clients will continue to be confronted with a broad range of safety, health, environmental and reliability issues. Exponent engages top scientists and engineers from an extensive array of disciplines, building our industry teams through market intelligence, capability development and thought leadership. We have an adaptable business model and a long history of anticipating changing client needs. We will continue to leverage these qualities as we deliver valuable solutions to clients,” concluded Dr. Corrigan.

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