Exponent, Inc.

Good day and welcome to Exponent's fourth quarter and fiscal year 2022 financial results conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note, this event is being recorded. I would now like to turn the conference over to Joni Constantelos. Please go ahead.

Thank you, operator. Good afternoon, ladies and gentlemen. Thank you for joining us on Exponent's fourth quarter and fiscal year 2022 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 backslash 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. Katherine Corrigan, President and Chief Executive Officer, and Rich 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, Exponent's 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's periodic SEC filings, including those factors discussed under the caption Risk Factor in Exponent's most recent form 10-K or 10-Q. The forward-looking statements and risks in this conference call are based on current expectations as of today. An exponent 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. Katherine Corrigan, Chief Executive Officer. Katherine?

Thank you, Joni, and thank you everyone for joining us today. I will start off by reviewing our fourth quarter and fiscal year 2022 business performance. Rich will then provide a more detailed review of our financial results and outlook for 2023. and we will then open the call for questions. We delivered solid results in fiscal year 2022, growing net revenues by 7% year over year and expanding earnings per diluted share. In a year marked with evolving macroeconomic challenges and uncertainty, we continued to showcase the strength and resiliency of our business model. We saw strong demand across the business for Exponent's diversified portfolio of services through 2022. On the proactive side, our work in the consumer products, electronics, automotive and life sciences sectors were key contributors for the year. On the reactive side, we saw robust litigation-related activity and a diversified portfolio of product safety and recall-related work spanning multiple industries. As innovation and technology become increasingly complex, The critical nature of our insights uniquely positions Exponent to address our clients' needs throughout the product lifecycle. Turning to our engagements in more detail, within our proactive services, we saw strong demand for our work in user experience research and machine learning data studies across multiple industries. Clients look to Exponent for our expertise in understanding the human-machine interface, from the cognitive impacts of virtual and augmented reality to the interactions between vehicle operators and advanced driver assistance systems. They come to us when they need to acquire the most sophisticated, high-quality, and curated training data sets to drive machine learning algorithms, because getting it right matters when it comes to product performance and safety. We saw increased activity in the life sciences sector related to regulatory issues, as well as the safety and efficacy of healthcare products and treatments. Within the automotive sector, our work with electric vehicles around batteries was a key contributor to our growth year over year. Looking at our reactive business, we continue to experience robust demand for our domestic litigation and international arbitrations-related work, particularly in the toxic tort and environmental litigation arena, as well as advanced driver assistance system litigation. We saw strong growth in engagements around product safety and recall, particularly in the transportation, life sciences, and consumer products industries. Clients are turning to us earlier in their investigation processes in order to benefit from our insights as they make critical product recall decisions. We saw our accelerated recruitment efforts materialize with 6% headcount growth year over year. While the landscape for top tier talent remains highly competitive, We successfully increased headcount in key areas of the business where we have identified the greatest need and opportunity. We are encouraged by our momentum and are focused on strategically building our world-class team to position Exponent at the forefront of innovation and to meet the dynamic needs of the market. Turning to our segments, Exponent's engineering and other scientific segments represented 83% of our net revenues in the fourth quarter and for the full year. Net revenues in this segment increased 10% in the fourth quarter and 8% during fiscal year 2022 as compared to the prior year period. Growth during the quarter and full year was broad-based with continued strong demand for exponents services across the consumer products, electronics, life sciences, and automotive sectors. Exponents environmental and health segment represented 17% of the company's net revenues in both the fourth quarter and fiscal year. Net revenues in this segment decreased 2% for the fourth quarter of 2022 and were flat during the full year 2022 compared to the same period in the prior year. Excluding the impact of foreign exchange, Net revenue for the environmental and health segments increased 2% in the fourth quarter of 2022 and increased 4% during fiscal year 2022 as compared to the prior year period. Growth in this segment was primarily driven by Exponent's safety-related work, evaluating the impacts of chemicals on human health and the environment. Since our humble beginnings in 1967, Exponent has harnessed the power of technical excellence, objectivity, and disciplinary diversity to help unravel the complexities of innovations as they become reality. Looking ahead, we will continue to evolve our differentiated portfolio of services to be at the cutting edge of our clients' needs. We remain focused on advancing our long-term strategy by positioning Exponent to capitalize on disruptive trends and rising societal expectations for safety, health, sustainability, reliability, and performance. I'll now turn the call over to Rich to provide more detail on our fourth quarter and fiscal year 2022 results, as well as discuss our outlook for the first quarter and the full year 2023.