Exponent, Inc.

Good day and welcome to the Exponents third quarter fiscal year 2023 earnings 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. Please note this event is being recorded. I would now like to turn the conference over to Joni Constantelos of Investor Relations. Please go ahead.

Thank you. Good afternoon, ladies and gentlemen. Thank you for joining us on Exponent's third quarter 2023 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. Catherine Corrigan, President and Chief Executive Officer of 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, 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's periodic SEC filings, including those factors discussed under the caption Risk Factor in Exponent's most recent Form 10-Q. The forward-looking statements and risks 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 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 third quarter 2023 business performance. Rich will then provide a more detailed review of our financial results and outlook, and we will then open the call for questions. During the third quarter, we once again delivered broad-based revenue growth and earnings with our diversified portfolio of services supporting growth across nearly all industries we serve. The deliberate investments we've made to expand capabilities and stay ahead of the pace of innovation continue to pay off. Our ability to anticipate client needs throughout the product or asset or technology lifecycle is and will continue to be a significant differentiator for eXponent. Of course, uncertainty exists in the broader markets we serve, but our exceptional team of integrated experts and our expansive capabilities provide us the ability to remain nimble and adapt our business to align with these dynamic market trends. Turning to our third quarter in a bit more detail, growth in the quarter was driven by continued strong demand for our reactive services. Our proactive engagements were driven by increased demand in the chemicals and life sciences sectors, offset by continued moderation in the consumer electronics sector. Overall, I am pleased with the strength we are seeing across the majority of the business. Within our reactive services, we continue to see robust demand for domestic and international dispute-related offerings involving large capital projects in the energy, utilities, and transportation sectors spanning various geographic regions. Additionally, consumer and automotive product liability and recall-related work increased in the quarter. Our proactive engagements were driven by increased demand for regulatory consulting work in the chemicals industry, and engagements in the life sciences sector. This was offset by ongoing moderation in the consumer electronics industry due in part to the timing of product life cycles as well as ongoing macroeconomic headwinds. As a result, we saw declines in data collection and human subject research engagements as well as product development consulting. While we do expect this moderation to continue, We are optimistic about the long-term market drivers in this sector, and we remain well-positioned to support our clients as these challenges begin to abate in 2024. With regard to our segments, exponents engineering and other scientific segment represented 83% of our net revenues in the third quarter, increasing 8% in the third quarter and 10% for the first three quarters compared to the prior year. Growth in the quarter was driven by strong demand for exponent services across the transportation, energy, and construction sectors. Exponent's environmental and health segment represented 17% of our net revenues in the third quarter, increasing 13% in the third quarter and 7% for the first three quarters compared to the prior year. Evolving regulatory requirements drove increased safety-related engagements, evaluating the impacts of chemicals on human health and the environment, and we also saw increased activity in the life sciences sector. As we close out the year, we remain focused on excellence in execution and expanding our differentiated capabilities to meet the dynamic needs of our clients. The investments I mentioned earlier will continue to be a priority to drive organic growth and development within exponents and to foster the essential trust our clients place in our team of experts to address their most complex needs. Further, managing resources in line with the growth of the business remains top of mind. To that end, as we expected, full-time equivalent employees in the third quarter decreased 2.5% compared to the second quarter as we continue to strategically align our resources with demand across the business. We are taking a two-pronged approach to ensuring our headcount is aligned with not only current demand, but also with the longer term demand and opportunities we are seeing. First, we are focused on recruiting in areas of the business where resources are constrained, but where we see opportunity to meet current and future market demands. Second, we continue to focus on performance management to ensure that our retained consultants are on a strong development path that will contribute to the future growth of the firm. In summary, ExpoMan continues to position itself at the forefront of innovation as a trusted advisor to our clients across the product lifecycle. Market drivers, including the increase in complexities around safety, health, and the environment, remain strong and continue to drive opportunity across our business. We remain focused on expanding our capabilities, strengthening our relationships, and driving profitable growth and value for our shareholders. I'll now turn the call over to Rich to provide more detail on our third quarter results, as well as discuss our outlook for the fourth quarter and the full year 2023.