Exponent, Inc.

Good day and welcome to the exponent fourth quarter and fiscal year 2020 earnings call. Today's conference is being recorded. At this time, I would like to turn the conference over to Whitney. Please go ahead, ma'am.

Thank you, operator. Good afternoon, ladies and gentlemen. Thank you for joining us on exponent fourth quarter and fiscal year 2020 financial results conference call. Please note that this call will be simultaneously webcast on the investor relations section of the company's corporate website at www.exponent.com slash investors. This conference call is the property of Exponent and any taping or other reproduction is expressly prohibited without prior written consent. Joining me on the call today are Dr. Catherine Corrigan, President and Chief Executive Officer, and Richard Schlenker, Executive Vice President and Chief Financial Officer. Before we start, I would like to remind you that the following discussion contains forward-looking statements including but not limited to exponents market opportunities and future financial results that involve risks and uncertainties that may cause actual results to differ materially from those discussed here. Additional information that could cause actual results to differ from forward-looking statements can be found in exponent periodic SEC filings including those factors discussed under the caption risk factor in Excellence's most recent form 10Q. The forward-looking statements and risks in this conference call are based on current expectations as of today and Excellence assumes no obligation to update or revise them whether as a result of new developments or otherwise. And now I will turn the call over to Dr. Catherine Corrigan, Chief Executive Officer. Catherine?

Thank you, Whitney, and thank you, everyone, for joining us today. I will start off by reviewing our 2020 business performance. Rich will then provide a more detailed review of our financial results and our outlook for 2021. We will then open the call for questions. In a year of worldwide challenge, we demonstrated the durability of Exponent's business model and the strength of our market opportunities. Our fourth quarter results exceeded our prior expectations and illustrate continued improvement across the business. For the quarter, we expanded EBITDA margin 200 basis points as compared to the same period last year. Net revenues in the quarter reflected a return to underlying growth, declining only 5% in the face of the 8% headwind from an extra week in the fourth quarter of 2019. Our successful execution demonstrates the resiliency of our business model, the dedication of our world class team, and the strength of our reputation. While we are encouraged by our results, COVID-19 continues to impact litigation and human participant studies. Society is raising the bar for safety, health, sustainability, and reliability. and clients are increasingly seeking Exponent's interdisciplinary proactive solutions. Exponent grew its annual revenues from proactive services in both business segments despite pandemic-related restrictions, one less week than the prior year, and the divestiture of the German entity. Industry and government alike are advancing their missions in multifaceted ways, Thank you for joining us today. In the fourth quarter, we deployed the wearable technology platforms for COVID-19 risk monitoring and mitigation for the U.S. Army and Navy that we talked about on our last conference call. Beyond COVID-19 use cases, wearable technologies can be used to monitor worker health, safety, and performance, and to evaluate the safety and efficacy of healthcare products and treatments. Exponent is uniquely positioned with its diverse and integrated expertise to advise clients as they leverage technology to improve human health and enhance performance. Technologies such as virtual reality, robotic surgery, and advanced vehicles are becoming ubiquitous, and understanding the cognitive aspects of users is critical to optimizing their experience and performance. While our human participant studies have slowed due to coronavirus restrictions, The interoperability of humans and increasingly sophisticated technologies is a secular trend that will be a future growth driver for Exponent. The increased focus on sustainability is driving a shift in the transportation industry. Automotive manufacturers are expanding their electric vehicle fleets and scaling manufacturing in a meaningful way. Our world-class multidisciplinary battery team is leveraging its experience in consumer electronics and our strong reputation for failure analysis in the transportation industry to improve the safety and reliability of energy storage for electric vehicles. During the fourth quarter, we had increased activity in domestic litigation support, which exceeded our expectations, but progress in this area is occurring in fits and starts. In the fourth quarter, many assignments that had been paused were given the go-ahead with near-term deadlines. But in December and January, clients were somewhat more measured as trial dates remain uncertain. We saw increases in international arbitration hearings as they proceeded virtually, since these do not require the involvement of the general public. We are seeing a steady flow of new litigation projects, but some clients are slower than usual in authorizing work. We are confident that litigation support will remain a long-term growth driver for our business. Exponents engineering and other scientific segments represented approximately 80% of the company's net revenues in the fourth quarter and fiscal year 2020. Net revenues in this segment decreased 5% in the fourth quarter and 4% in fiscal year 2020 as compared to 2019. Clients continued to seek Exponents expertise for proactive and reactive engagements across a broad range of industries and use cases. Our integrity management advisory services for the utilities industry remain strong as clients and regulators focus on power reliability and safety. Our biomedical team advised clients as they navigate evolving regulatory frameworks around the world, including the impending medical device regulatory deadlines in Europe. Exponents environmental and health segment represented approximately 20% of the company's net revenues in the fourth quarter and fiscal year 2020. Net revenues in this segment decreased 5% in the fourth quarter and increased 1% in fiscal year 2020 as compared to 2019. Within this segment, the chemical regulation and food safety practice continued to grow as exponent scientists evaluated the effects of chemicals and new products on human health and the environment, including registrations for disinfectants to prevent the spread of the coronavirus. For clients who must meet health and safety regulations as they distribute products globally, our scientific and regulatory expertise in the Americas, Europe, and Asia is invaluable. For more than 50 years, Exponent has been called upon to advise clients on the causes of failures as well as how to produce safer, healthier, more sustainable, and more reliable products and processes. As the technological complexity of these products and processes increases, so does the demand for Exponent's engineering and scientific expertise. Our market drivers are strong, and demand for our services has continued. Despite ongoing uncertainties and economic turbulence, we are optimistic about our ability to grow in 2021. I'll now turn the call over to Rich to provide some more detail on our fourth quarter and 2020 results, as well as discuss our outlook for the first quarter and for 2021.