Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files).

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.¨ [ ]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

As of October ~~27, 2017,~~28, 2022, the latest practicable date, the registrant had ~~25,810,749~~50,638,229 shares of common stock ~~$0.001 par value per share,~~ outstanding.

The accompanying notes are an integral part of these Unaudited Condensed Consolidated Financial Statements.

For the Three and Nine Months Ended September ~~29, 2017~~30, 2022 and ~~September 30, 2016~~October 1, 2021

The accompanying notes are an integral part of these Unaudited Condensed Consolidated Financial Statements

For the Three and Nine Months Ended September ~~29, 2017~~30, 2022 and ~~September 30, 2016~~October 1, 2021

The accompanying notes are an integral part of these Unaudited Condensed Consolidated Financial Statements

For the Three and Nine Months Ended September ~~29, 2017~~30, 2022 and ~~September 30, 2016~~October 1, 2021

The accompanying notes are an integral part of these Unaudited Condensed Consolidated Financial Statements.

The Company measures certain financial assets and liabilities at fair value on a recurring basis, including ~~available-for-sale fixed income~~money market securities, trading fixed income and equity securities held in its deferred compensation plan and the liability associated with its deferred compensation plan. There were no transfers between fair value measurement levels during the three and nine months ended September ~~29, 2017~~30, 2022 and ~~September 30, 2016.~~October 1, 2021. Any transfers between fair value measurement levels would be recorded on the actual date of the event or change in circumstances that caused the transfer. The fair value of these certain financial assets and liabilities was determined using the following inputs at September ~~29, 2017:~~

The fair value of these certain financial assets and liabilities was determined using the following inputs at December ~~30, 2016:~~31, 2021:

~~Fixed income available-for-sale~~Money market securities as of September ~~29, 2017~~30, 2022 and December ~~30, 2016~~31, 2021 represent obligations of the United States ~~agencies.~~Treasury. Fixed income and equity trading securities represent mutual funds held in the Company’s deferred compensation plan. See Note 6 for additional information about the Company’s deferred compensation plan.

Cash and cash equivalents ~~and short-term investments~~ consisted of the following as of September ~~29, 2017:~~30, 2022:

Cash and cash equivalents ~~and short-term investments~~ consisted of the following as of December ~~30, 2016:~~31, 2021:

The following table summarizes the cost and estimated fair value of short-term fixed income securities classified as short-term investments based on stated effective maturities as of September 29, 2017:

At September ~~29, 2017~~30, 2022 and December ~~30, 2016,~~31, 2021, the Company did not have any assets or liabilities valued using significant unobservable inputs.

The following financial instruments are not measured at fair value on the Company's unaudited condensed consolidated balance sheet at September ~~29, 2017~~30, 2022 and December ~~30, 2016,~~31, 2021, but require disclosure of their fair values: accounts receivable, other assets and accounts payable. The estimated fair value of such instruments at September ~~29, 2017~~30, 2022 and December ~~30, 2016~~31, 2021 approximates their carrying value as reported on the Company’s unaudited condensed consolidated balance sheet.

~~There were no other-than-temporary impairments or credit losses related to available-for-sale securities during the three and nine months ended September 29, 2017 and September 30, 2016.~~

On October 21, 2015, the Company’s Board of Directors authorized $35,000,000 for the repurchase of the Company’s common stock. On October 19, 2016, the Company’s Board of Directors authorized an additional $35,000,000 for the repurchase of the Company’s common stock.

The Company repurchased 139,182 shares of its common stock for $8,431,000 during the nine months ended September 29, 2017. The Company repurchased 491,312 shares of its common stock for $24,456,000 during the nine months ended September 30, 2016. As of September 29, 2017 the Company had remaining authorization under its stock repurchase plans of $48,876,000 to repurchase shares of common stock.

Net losses related to the re-issuance of treasury stock to settle restricted stock unit and stock option awards of $5,667,000 and $5,791,000 were recorded as a reduction to retained earnings during the nine months ended September 29, 2017 and September 30, 2016, respectively. There were no net losses related to the re-issuance of treasury stock during the three months ended September 29, 2017 and September 30, 2016.

The Company maintains nonqualified deferred compensation plans for the benefit of a select group of highly compensated employees. Under these plans, participants may elect to defer up to ~~100%~~100% of their compensation. Company assets that are earmarked to pay benefits under the plans are held in a rabbi trust and are subject to the claims of the Company’s creditors. As of September ~~29, 2017~~30, 2022 and December ~~30, 2016,~~31, 2021 the invested amounts under the plans totaled ~~$50,779,000~~$94,579,000 and ~~$48,267,000,~~$109,342,000, respectively, and are recorded in ~~pre-paid~~prepaid expenses and other current assets and deferred compensation plan assets on the Company’s unaudited condensed consolidated balance ~~sheet.~~sheets. These assets are classified as trading securities and are recorded at fair value with changes recorded as adjustments to miscellaneous income (expense), net.

As of September ~~29, 2017~~30, 2022 and December ~~30, 2016,~~31, 2021 vested amounts due under the plans totaled ~~$56,479,000~~$94,502,000 and ~~$53,617,000,~~$110,379,000, respectively, and are recorded within accrued payroll and employee benefits and deferred compensation plan liabilities on the Company’s unaudited condensed consolidated balance ~~sheet.~~sheets. Changes in the liability are recorded as adjustments to compensation expense. During the three months ended September ~~29, 2017 and September~~ 30, ~~2016,~~2022, the Company recognized a reduction to compensation expense of ~~$1,699,000 and $1,458,000, respectively,~~$4,925,000 as a result of changes in the market value of the trust assets with the same amount being recorded as a loss in miscellaneous income (expense), net. During the three months ended October 1, 2021, the Company recognized a reduction to compensation expense of $258,000 as a result of changes in the market value of the trust assets with the same amount being recorded as a loss in miscellaneous income (expense), net. During the nine months ended September 30, 2022, the Company recognized a reduction in compensation expense of $20,884,000 as a result of changes in the market value of the trust assets with the same amount being recorded as a loss in miscellaneous income (expense), net. During the nine months ended October 1, 2021, the Company recognized additional compensation expense of $9,997,000 as a result of changes in the market value of the trust assets with the same amount being recorded as income in miscellaneous income (expense), net. During the nine months ended September 29, 2017 and September 30, 2016, the Company recognized compensation expense of $4,617,000 and $2,823,000, respectively, as a result of changes in the market value of the trust assets with the same amount being recorded as income in miscellaneous income, net.

The Company maintains allowances for estimated losses over the remaining contractual life of its receivables resulting from the inability of customers to meet their financial obligations or for disputes that affect the Company’s ability to fully collect amounts due. In circumstances where the Company is aware of a specific customer’s inability to meet its financial obligations or aware of a dispute with a specific customer, a specific allowance is recorded to reduce the net recognized receivable to the amount the Company reasonably believes will be collected. For all other

customers the Company recognizes allowances for doubtful accounts based upon historical write-offs, customer concentration, customer creditworthiness, current economic conditions, aging of amounts due and future expectations.

Note 9: Segment Reporting

The Company has two reportable operating segments based on two primary areas of service. The Engineering and Other Scientific segment is a broad service group providing technical consulting in different practices primarily in engineering. The Environmental and Health segment provides services in the ~~area~~areas of environmental, epidemiology and health risk analysis. This segment provides a wide range of consulting services relating to environmental hazards and risks and the impact on both human health and the environment. Our Chief Executive Officer, the chief operating decision maker, reviews revenues and operating income for each of our reportable segments, but does not review total assets in evaluating segment performance and capital allocation.

Segment information for the three and nine months ended September ~~29, 2017~~30, 2022 and ~~September 30, 2016~~October 1, 2021 follows:

Revenues

~~Revenues~~


	Three Months Ended				Nine Months Ended				Three Months Ended				Nine Months Ended
(In thousands)	September 29, 2017		September 30, 2016		September 29, 2017		September 30, 2016		September 30, 2022		October 1, 2021		September 30, 2022		October 1, 2021

Engineering and Other Scientific	$	70,670	$	61,237	$	207,148	$	187,026	$	107,403	$	97,100	$	321,168	$	288,848
Environmental and Health		16,885		16,375		52,369		51,037		19,776		19,305		64,770		63,915

Total revenues	$	87,555	$	77,612	$	259,517	$	238,063	$	127,179	$	116,405	$	385,938	$	352,763

Operating Income

Three Months Ended Nine Months Ended
(In thousands)
September 29,
2017

September 30,
2016

September 29,
2017

September 30,
2016

Engineering and Other Scientific $ 23,645 $ 19,933 $ 70,279 $ 60,632
Environmental and Health 5,450 4,758 16,753 13,981

Total segment operating income 29,095 24,691 87,032 74,613

Corporate operating expense (9,790 ) (9,096 ) (32,776 ) (27,651 )

Total operating income $ 19,305 $ 15,595 $ 54,256 $ 46,962


	Three Months Ended						Nine Months Ended
(In thousands)	September 30, 2022			October 1, 2021			September 30, 2022			October 1, 2021
Engineering and Other Scientific	$	39,385		$	36,676		$	117,907		$	108,646
Environmental and Health		6,378			5,851			21,059			21,265
Total segment operating income		45,763			42,527			138,966			129,911
Corporate operating expense		(8,950	)		(10,408	)		(20,159	)		(44,362	)
Total operating income	$	36,813		$	32,119		$	118,807		$	85,549

Certain operating expenses are excluded from the Company’s measure of segment operating income. These expenses include costs associated with its human resources, finance, information technology, and business development groups; the deferred compensation expense/benefit due to the change in value of assets associated with its deferred compensation plan; stock-based compensation associated with restricted stock unit and stock option awards; and the change in its allowance for contract losses and doubtful accounts.

- 1516 -

Capital Expenditures


	Three Months Ended				Nine Months Ended				Three Months Ended				Nine Months Ended
(In thousands)	September 29, 2017		September 30, 2016		September 29, 2017		September 30, 2016		September 30, 2022		October 1, 2021		September 30, 2022		October 1, 2021

Engineering and Other Scientific	$	662	$	902	$	2,464	$	3,365	$	870	$	563	$	3,050	$	1,981
Environmental and Health		64		33		170		94		48		57		104		136

Total segment capital expenditures		726		935		2,634		3,459		918		620		3,154		2,117

Corporate capital expenditures		102		8,746		720		9,604		1,172		778		6,387		3,086

Total capital expenditures	$	828	$	9,681	$	3,354	$	13,063	$	2,090	$	1,398	$	9,541	$	5,203

Certain capital expenditures associated with the Company’s corporate cost centers and the related depreciation are excluded from the Company’s segment information.

Depreciation and Amortization


	Three Months Ended				Nine Months Ended				Three Months Ended				Nine Months Ended
(In thousands)	September 29, 2017		September 30, 2016		September 29, 2017		September 30, 2016		September 30, 2022		October 1, 2021		September 30, 2022		October 1, 2021

Engineering and Other Scientific	$	1,103	$	1,136	$	3,381	$	3,273	$	1,108	$	1,089	$	3,301	$	3,074
Environmental and Health		47		45		132		133		41		49		124		141

Total segment depreciation and amortization		1,150		1,181		3,513		3,406		1,149		1,138		3,425		3,215

Corporate depreciation and amortization		417		401		1,249		1,103		574		507		1,799		1,728

Total depreciation and amortization	$	1,567	$	1,582	$	4,762	$	4,509	$	1,723	$	1,645	$	5,224	$	4,943

One client comprised ~~17%~~16% and 15% of the Company’s revenues during the three months ended September ~~29, 2017.~~30, 2022 and October 1, 2021, respectively. The same client comprised ~~14%~~15% and 13% of the ~~Company’s~~Company's revenues during the nine months ended September ~~29, 2017. No other single client comprised more than 10%~~30, 2022 and October 1, 2021, respectively.

Note ~~10:~~11: Contingencies

The Company is a party to various legal actions from time to time and may be contingently liable in connection with claims and contracts arising in the normal course of business, the outcome of which the Company believes, after consultation with legal counsel, will not have a material adverse effect on its financial condition, results of operations or liquidity. However, due to the risks and uncertainties inherent in legal proceedings, actual results could differ from current expected results. All legal costs associated with litigation are expensed as incurred.

~~- 16 -~~

Note 12: Subsequent Events

On October 27, 2022, the Company’s Board of Directors announced a cash dividend of $0.24 per share of the Company’s common stock, payable December 23, 2022, to stockholders of record as of December 9, 2022.

- 19 -

~~Item 2.~~

~~Management’s Discussion and Analysis of Financial Condition and Results of Operations~~

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with the unaudited condensed consolidated financial statements and notes thereto included herein and with our audited consolidated financial statements and notes thereto for the fiscal year ended December ~~30, 2016,~~31, 2021, which are contained in our fiscal ~~2016~~2021 Annual Report on Form 10-K, which was filed with the U.S. Securities and Exchange Commission on February ~~24, 2017~~25, 2022 (our ~~“2016~~“2021 Annual Report”).

Forward-Looking Statements

This Quarterly Report on Form 10-Q contains certain “forward-looking” statements (as such term is defined in the Private Securities Litigation Reform Act of 1995, and the rules promulgated pursuant to the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended) that are based on the beliefs of ~~the Company’s~~our management, as well as assumptions made by and information currently available to ~~the Company’s~~our management. Such forward-looking statements are subject to the safe harbor created by the Private Securities Litigation Reform Act of 1995. When used in this document, the words “intend,” “anticipate,” “believe,” “estimate,” “expect” and similar expressions, as they relate to ~~the Company~~us or ~~its~~our management, identify such forward-looking statements. Such statements reflect the current views of ~~the Company~~us or ~~its~~our management with respect to future events and are subject to certain risks, uncertainties and assumptions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, ~~the Company’s~~our actual results, performance, or achievements could differ materially from those expressed in, or implied by, any such forward-looking statements. Factors that could cause or contribute to such material differences include the global economic downturn, the COVID-19 pandemic (including factors relating to measures implemented by governmental authorities or by us to promote the safety of our employees, vendors and clients; other direct and indirect impacts on our business and the businesses of our clients, vendors and other partners; impacts which may, among other things, adversely affect our clients’ ability to utilize our services at the levels they have previously; disruptions of access to our facilities or those of our clients or third parties; and increased and potentially significant economic uncertainty and volatility, including credit and collectability risks and potential disruptions of capital and credit markets), the possibility that the demand for our services may decline as a result of changes in general and industry specific economic conditions, the timing of engagements for our services, the effects of competitive services and pricing, the absence of backlog related to our business, our ability to attract and retain key employees, the effect of tort reform and government regulation on our business and liabilities resulting from claims made against us. Additional risks and uncertainties are discussed in ~~our 2016 Annual~~this Quarterly Report under the heading “Risk Factors” and elsewhere in ~~the~~this report. The inclusion of such forward-looking information should not be regarded as a representation by the ~~Company~~us or any other person that the future events, plans, or expectations we contemplated ~~by the Company~~ will be achieved. Due to such uncertainties and risks, you are warned not to place undue reliance on such forward-looking statements, which speak only as of the date hereof. ~~The Company does~~We do not intend to release publicly any updates or revisions to any such forward-looking statements.

Business Overview

Exponent, Inc., is an engineering and scientific consulting firm that provides solutions to complex problems. Our multidisciplinary team of scientists, engineers and business consultants brings together more than 90 different technical disciplines to solve complicated issues facing industry and business today. Our services include analysis of product development, product recall, regulatory compliance, and the discovery of potential problems related to products, people, property and impending litigation.

CRITICAL ACCOUNTING ESTIMATES

~~In preparing our unaudited condensed consolidated financial statements, we make assumptions, judgments and estimates that can~~There have abeen no significant impact on our revenue, operating income and net income, as well as on the value of certain assets and liabilities on our consolidated balance sheet. We base our assumptions, judgments and estimates on historical experience and various other factors that we believe to be reasonable under the circumstances. Actual results could differ materially from these estimates under different assumptions or conditions. On a regular basis we evaluate our assumptions, judgments and estimates and make changes ~~accordingly. We believe that the assumptions, judgments and estimates involved~~ in the accounting for revenue recognition and estimating the allowance for contract losses and doubtful accounts have the greatest potential impact on our consolidated financial statements, so we consider these to be our critical accounting ~~policies. Historically, our assumptions, judgments and~~ estimates ~~relative~~during the nine months ended September 30, 2022, as compared to ~~our~~the critical accounting ~~policies have not differed materially from actual results. Policies covering revenue recognition~~estimates disclosed in Management’s Discussion and ~~estimating the allowance for contract losses~~Analysis of Financial Condition and ~~doubtful accounts are described~~Results of Operations included in our ~~2016~~2021 Annual ~~Report under “Critical Accounting Estimates” and Note 1 (Summary of Significant Accounting Policies) of the Notes to Consolidated Financial Statements.~~Report.

- 1720 -

RESULTS OF CONSOLIDATED OPERATIONS

Executive Summary

Revenues for the third quarter of ~~2017~~2022 increased ~~13%~~9% to ~~$87,555,000~~$127,179,000 as compared to ~~$77,612,000~~$116,405,000 during the same period last year. Revenues before reimbursements for the third quarter of ~~2017~~2022 increased ~~11%~~6% to ~~$82,359,000~~$115,143,000 as compared to ~~$74,160,000~~$108,467,000 during the same period last year. We experienced strong demand for our consulting services from a diverse set of clients for both proactive and reactive projects. We continue to see demand for our proactive services in the areas of design and regulatory consulting, specifically related to consumer electronics, and our reactive services in international construction disputes, consumer product recalls and product liability claims.

During the third quarter of ~~2017 we had strong growth in~~2022, our ~~chemical regulation & food safety, construction consulting, electrical engineering & computer science, human factors, mechanical engineering,~~proactive engagements within consumer products and ~~polymer science & materials chemistry practices. During~~transportation remained a key driver of our performance as demand for our work related to virtual reality, wearable technologies, and energy storage increased. At the ~~quarter we~~same time, our reactive business continued to benefit from an increase in litigation activity and a diversified portfolio of product safety- and recall-related work, ~~on a large human factors assessment for a client~~particularly in the consumer products industry. The level of activity for this project increased during the quarter, driving increases in both revenue and profitability. This project represented approximately 8% of our revenues before reimbursements in the third quarter of 2017 and approximately 6% of our revenues before reimbursements for the first nine months of 2017. During the quarter we also continued our international construction disputes work with current mining, gas terminal and power plant projects. We also experienced growth from lithium-ion battery consulting for clients in the consumer products, transportation, medical device, and utility industries. Our interdisciplinary team of chemists, electrical engineers, material scientists and mechanical engineers has guided clients with respect to the performance, reliability, and safety of new products, as well as with respect to recalls and litigation matters involving existing products with lithium-ion batteries.life sciences space.

Net income ~~increased 30%~~decreased 1% to ~~$14,643,000~~$24,442,000 during the third quarter of ~~2017~~2022 as compared to ~~$11,289,000~~$24,574,000 during the same period last year. Diluted earnings per share increased to ~~$0.54~~$0.47 per share as compared to ~~$0.42~~$0.46 in the same period last year. We were able to improve profitability and margins by effectively managing headcount over the past year to align our resources with demand and benefited from a large human factors assessment for a client in the consumer products industry, which resulted in improved utilization and increased leverage of our cost structure.

We remain focused on selectively adding top talent and developing the skills necessary to expand our market position and providing clients with in-depth scientific research and analysis to determine what happened and how to prevent failures or exposures in the future. We also remain focused on capitalizing on emerging growth areas, managing other operating expenses, generating cash from operations, maintaining a strong balance sheet and undertaking activities such as share repurchases and dividends to enhance shareholder value.

Overview of the Three Months Ended September ~~29, 2017~~30, 2022

During the third quarter of ~~2017,~~2022, billable hours increased ~~12%~~5% to ~~310,000~~365,000 as compared to ~~278,000~~348,000 during the same period last year. Our utilization ~~increased~~decreased to ~~76%~~73% during the third quarter of ~~2017~~2022 as compared to ~~70%~~76% during the same period last year. Technical full-time equivalent employees increased 3%8% to ~~787~~958 during the third quarter of ~~2017~~2022 as compared to ~~761~~883 during the same period last year. We continue to selectively hire key talent to expand our capabilities.

~~- 18 -~~

Three Months Ended September ~~29, 2017~~30, 2022 compared to Three Months Ended ~~September 30, 2016~~October 1, 2021

Revenues
Three Months Ended

(in thousands, except percentages)

September 29,
2017

September 30,
2016

Percent
Change

Engineering and Other Scientific $ 70,670 $ 61,237 15.4 %
Percentage of total revenues 80.7 % 78.9 %
Environmental and Health 16,885 16,375 3.1 %
Percentage of total revenues 19.3 % 21.1 %

Total revenues $ 87,555 $ 77,612 12.8 %

Revenues


	Three Months Ended
(in thousands, except percentages)	September 30, 2022			October 1, 2021			Percent Change
Engineering and Other Scientific	$	107,403		$	97,100			10.6	%
Percentage of total revenues		84.5	%		83.4	%
Environmental and Health		19,776			19,305			2.4	%
Percentage of total revenues		15.5	%		16.6	%
Total revenues	$	127,179		$	116,405			9.3	%

The increase in revenues for our Engineering and Other Scientific segment was due to an increase in billable ~~hours.~~hours and an increase in billing rates. During the third quarter of ~~2017,~~2022, billable hours for this segment increased by ~~13%~~6% to ~~242,000~~291,000 as compared to ~~214,000~~275,000 during the same period last year. Utilization for this segment ~~increased~~decreased to ~~78%~~76% during the third quarter of ~~2017~~2022 as compared to ~~73%~~78% during the same period last year. The increase in billable hours ~~and utilization~~ was ~~due to strong growth from~~driven by an increase in demand for our ~~proactive design consulting~~ services ~~specifically related to ongoing projects with clients in~~across the consumer products, ~~industry. During~~utilities, and automotive sectors. Utilization during the second quarter we continued work on a large human factors assessment for a client in the consumer products industry. In addition to the ongoing large human factors assessment project, we realized increased demand for similar services from other clients. We have developed a unique offering of highly qualified scientists and facilities to advise clients as they navigate the increasing complexity of interactions between their products and users. We also experienced growth from lithium-ion battery consulting for clients in the consumer products, transportation, medical device, and utility industries. Our interdisciplinary team of chemists, electrical engineers, material scientists and mechanical engineers has guided clients with respect to the performance, reliability, and safety of new products, as well as with respect to recalls and litigation matters involving existing products with lithium-ion batteries.2021 was historically strong. Technical full-time equivalent employees in this segment increased 5%10% to ~~594~~742 during the third quarter of ~~2017~~2022 as compared to ~~566~~675 for the same period last year due to our ~~continuing~~ recruiting and retention efforts.

The increase in revenues for our Environmental and Health segment was due to an increase in billable ~~hours.~~hours and an increase in billing rates. Excluding the impact of foreign exchange, revenues for this segment increased 7.3% during the third quarter of 2022. During the third quarter of ~~2017,~~2022, billable hours for this segment increased by 6%1% to ~~68,000~~74,000 as compared to ~~64,000~~73,000 during the same period last year. Utilization in this segment ~~increased~~decreased to ~~68%~~66% during

- 21 -

the third quarter of ~~2017~~2022 as compared to ~~63%~~68% during the same period last year. The increase in ~~billable hours and~~revenues was due to expansion of our health data science work. The decrease in utilization was due to ~~growth~~investments in recruiting and marketing in our chemical regulation and food safety practice where we continued to assist clients with global regulatory issues. This segment’s contribution to the large ongoing human factors assessment also contributed to the increase in billable hours and utilization. These increases were partially offset by depressed demand from the oil and gas and industrial chemical industries.Health Practice. Technical full-time equivalent employees in this segment ~~decreased by 1%~~increased 4% to ~~193~~216 during the third quarter of ~~2017~~2022 as compared to ~~195~~208 during the same period last ~~year. The decrease in technical full-time equivalent employees was~~year due to our ~~efforts to align resources with anticipated demand.~~recruiting and retention efforts.

Compensation and Related Expenses
Three Months Ended

(in thousands, except percentages)

September 29,
2017

September 30,
2016

Percent
Change

Compensation and related expenses $ 51,493 $ 47,797 7.7 %
Percentage of total revenues 58.8 % 61.6 %

Compensation and Related Expenses


	Three Months Ended
(in thousands, except percentages)	September 30, 2022			October 1, 2021			Percent Change
Compensation and related expenses	$	62,779		$	64,138			-2.1	%
Percentage of total revenues		49.4	%		55.1	%

The ~~increase~~decrease in compensation and related expenses during the third quarter of ~~2017~~2022 was due to a change in the value of assets associated with our deferred compensation plan, partially offset by an increase in ~~bonus~~payroll expense and an increase in ~~payroll expense. Bonus~~fringe benefits. During the third quarter of 2022, deferred compensation expense ~~increased~~decreased by ~~$2,392,000~~$4,667,000 with a corresponding decrease to other income, net, as compared to the same period last year, due to the change in value of assets associated with our deferred compensation plan. This decrease consisted of a decrease in the value of plan assets of $4,925,000 during the third quarter of ~~2017 due~~2022 as compared to a ~~corresponding increase to income before income taxes, before bonus expense, and before stock-based compensation.~~decrease in the value of plan assets of $258,000 during the same period last year. Payroll expense increased ~~$854,000~~by $2,690,000 and fringe benefits increased by $307,000 during the third quarter of 2022 due to the impact of our annual salary adjustments and an increase in technical full-time equivalent employees. We expect our compensation expense, excluding the change in value of deferred compensation plan assets, to increase as we selectively add new talent and adjust compensation to market conditions.

~~- 19 -~~

Other Operating Expenses
Three Months Ended

(in thousands, except percentages)

September 29,
2017

September 30,
2016

Percent
Change

Other operating expenses $ 7,500 $ 7,020 6.8 %
Percentage of total revenues 8.6 % 9.0 %

Other Operating Expenses


	Three Months Ended
(in thousands, except percentages)	September 30, 2022			October 1, 2021			Percent Change
Other operating expenses	$	8,822		$	8,017			10.0	%
Percentage of total revenues		6.9	%		6.9	%

Other operating expenses include facilities-related costs, technical materials, computer-related expenses and depreciation and amortization of property, equipment and leasehold improvements. The increase in other operating expenses during the third quarter of ~~2017~~2022 was primarily due to an increase in occupancy expense of ~~$265,000~~$400,000, an increase in information technology related expenses of $253,000, and an increase in ~~computer expense~~office expenses of ~~$137,000 associated with investments~~$132,000. The increases in occupancy expenses and office expenses were due to growth in technical full-time equivalent employees and the transition back to our offices from a fully remote work environment. The increases in information technology related expenses were due to continued investment in our corporate infrastructure. We expect other operating expenses to grow as we selectively add new talent, ~~and~~ make investments in our corporate ~~infrastructure.~~infrastructure, and transition our workforce back to our offices as COVID-19 pandemic related business restrictions are lifted.

Reimbursable Expenses
Three Months Ended

(in thousands, except percentages)

September 29,
2017

September 30,
2016

Percent
Change

Reimbursable expenses $ 5,196 $ 3,452 50.5 %
Percentage of total revenues 5.9 % 4.4 %

Reimbursable Expenses

~~The increase in reimbursable expenses was primarily due to an increase in travel related costs associated with our large human factors assessment project.~~


	Three Months Ended
(in thousands, except percentages)	September 30, 2022			October 1, 2021			Percent Change
Reimbursable expenses	$	12,036		$	7,938			51.6	%
Percentage of total revenues		9.5	%		6.8	%

- 22 -

The amount of reimbursable expenses will vary from quarter to quarter depending on the nature of our projects. The increase in reimbursable expenses during the third quarter of 2022 was primarily due to an increase in project-related travel and other project-related expenses as COVID-19 pandemic-related business and travel restrictions eased.

General and Administrative Expenses
Three Months Ended
(in thousands, except percentages)
September 29,
2017

September 30,
2016

Percent
Change

General and administrative expenses $ 4,061 $ 3,748 8.4 %
Percentage of total revenues 4.6 % 4.8 %

General and Administrative Expenses


	Three Months Ended
(in thousands, except percentages)	September 30, 2022			October 1, 2021			Percent Change
General and administrative expenses	$	6,729		$	4,193			60.5	%
Percentage of total revenues		5.3	%		3.6	%

The increase in general and administrative expenses ~~during the third quarter of 2017~~ was primarily due to an increase in ~~bad debt~~travel and meals of ~~$91,000,~~$1,710,000, an increase in outside consulting expense of $485,000, an increase in recruiting expenses of 167,000, and several other individually insignificant increases. The increase in travel and meals was due to a firm-wide managers' meeting held during the third quarter of ~~$90,000,~~2022 and anthe continued easing of COVID-19 pandemic-related business and travel restrictions. The increase in ~~legal~~outside consulting expense was due to several ongoing projects associated with investments in our corporate infrastructure. The increases in recruiting expenses ~~of $87,000.~~was due to the increase in technical full-time equivalent employees. We expect general and administrative expenses to increase as we selectively add new talent, expand our business development and staff development initiatives, and ~~pursue staff~~increase travel and meal expenses as COVID-19 pandemic related business restrictions phase out.

Operating Income


	Three Months Ended
(in thousands, except percentages)	September 30, 2022			October 1, 2021			Percent Change
Engineering and Other Scientific	$	39,385		$	36,676			7.4	%
Environmental and Health		6,378			5,851			9.0	%
Total segment operating income		45,763			42,527			7.6	%
Corporate operating expense		(8,950	)		(10,408	)		-14.0	%
Total operating income	$	36,813		$	32,119			14.6	%

The increase in operating income for our Engineering and Other Scientific segment during the third quarter of 2022 as compared to the same period last year was due to an increase in revenues partially offset by an increase in expenses. The increase in revenues was driven by demand for our services across the consumer products, utilities, and automotive sectors. The increase in operating income for our Environmental and Health segment was due to an increase in revenues. The increase in revenues was driven by expansion of our health data science work.

- 23 -

Certain operating expenses are excluded from the Company’s measure of segment operating income. These expenses include the costs associated with our human resources, finance, information technology, and business development ~~initiatives.~~groups; the deferred compensation expense/benefit due to the change in value of assets associated with our deferred compensation plan; stock-based compensation associated with restricted stock unit and stock option awards; and the change in our allowance for contract losses and doubtful accounts.

Other Income, Net
Three Months Ended

(in thousands, except percentages)

September 29,
2017

September 30,
2016

Percent
Change

Other income, net $ 2,725 $ 2,325 17.2 %
Percentage of total revenues 3.1 % 3.0 %

The decrease in corporate operating expenses during the third quarter of 2022 as compared to the same period last year was primarily due to a decrease in deferred compensation expense partially offset by an increase in the costs associated with our human resources, finance, information technology and business development groups. During the third quarter of 2022, deferred compensation expense decreased $4,667,000, with a corresponding decrease to other income, net, as compared to the same period last year, due to the change in value of assets associated with our deferred compensation plan. This decrease consisted of a decrease in the value of plan assets of $4,925,000 during the third quarter of 2022 as compared to a decrease in the value of plan assets of $258,000 during the same period last year.

Other Income, Net


	Three Months Ended
(in thousands, except percentages)	September 30, 2022			October 1, 2021			Percent Change
Other income, net	$	(3,337	)	$	270			-1335.9	%
Percentage of total revenues		-2.6	%		0.2	%

Other income, net, consists primarily of changes in the value of assets associated with our deferred compensation plan, interest income earned on available cash, cash equivalents and short-term investments, and rental income from leasing space in our Silicon Valley ~~facility.~~and Natick facilities. The ~~increase~~decrease in other income, net, was primarily due to ~~an increase in interest income of $193,000 and~~ a change in the value of assets associated with our deferred compensation ~~plan. The~~plan partially offset by an increase in the gain on foreign exchange, and an increase in interest ~~income was due to higher interest rates for our cash equivalents and short-term investments.~~income. During the third quarter of ~~2017,~~2022, other income, net, ~~increased $241,000~~decreased by $4,667,000 with a corresponding ~~increase~~decrease to deferred compensation expense, as compared to the same period last year, due to a change in the value of assets associated with our deferred compensation plan. This ~~increase~~decrease consisted of ~~an increase~~a decrease in the value of the plan assets of ~~$1,699,000~~$4,925,000 during the third quarter of ~~2017~~2022 as compared to ~~an increase~~a decrease in the value of the plan assets of ~~$1,458,000~~$258,000 during the same period last year. The increase in the gain on foreign exchange of $325,000 was due to an increase in the value of assets denominated in currencies that are not our functional currency. The increase in interest income of $625,000 was due to an increase in interest rates.

~~- 20 -~~

Income Taxes
Three Months Ended
(in thousands, except percentages)
September 29,
2017

September 30,
2016

Percent
Change

Income taxes $ 7,387 $ 6,631 11.4 %
Percentage of total revenues 8.4 % 8.5 %
Effective tax rate 33.5 % 37.0 %

Income Taxes


	Three Months Ended
(in thousands, except percentages)	September 30, 2022			October 1, 2021			Percent Change
Income taxes	$	9,034		$	7,815			15.6	%
Percentage of total revenues		7.1	%		6.7	%
Effective tax rate		27.0	%		24.1	%

The increase in income tax expense was due to a ~~corresponding increase in pre-tax income. The~~ decrease ~~in our effective tax rate was due to an increase~~ in the excess tax benefit associated with ~~share-based~~stock-based awards. There was no excess tax benefit associated with stock-based awards ~~and a decrease in our unrecognized tax benefit.~~during the third quarter of 2022. The excess tax benefit associated with ~~share-based~~stock-based awards ~~increased to $464,000~~was $1,066,000 during the third quarter of ~~2017 as compared to $39,000~~2021. Excluding the impact of the excess tax benefit, the effective tax rate would have been 27.4% during ~~the same period last year. During~~ the third quarter of ~~2017 we released $437,000 of our unrecognized tax benefit due to the completion of two tax audits.~~2021.

Nine Months Ended September ~~29, 2017~~30, 2022 compared to Nine Months Ended ~~September 30, 2016~~October 1, 2021

Revenues
Nine Months Ended
(in thousands, except percentages)

September 29,
2017

September 30,
2016

Percent
Change

Engineering and Other Scientific $ 207,148 $ 187,026 10.8 %
Percentage of total revenues 79.8 % 78.6 %
Environmental and Health 52,369 51,037 2.6 %
Percentage of total revenues 20.2 % 21.4 %

Total revenues $ 259,517 $ 238,063 9.0 %

Revenues

- 24 -


	Nine Months Ended
(in thousands, except percentages)	September 30, 2022			October 1, 2021			Percent Change
Engineering and Other Scientific	$	321,168		$	288,848			11.2	%
Percentage of total revenues		83.2	%		81.9	%
Environmental and Health		64,770			63,915			1.3	%
Percentage of total revenues		16.8	%		18.1	%
Total revenues	$	385,938		$	352,763			9.4	%

The increase in revenues for our Engineering and Other Scientific segment was due to an increase in billable ~~hours.~~hours and an increase in billing rates. During the first nine months of ~~2017,~~2022, billable hours for this segment increased by 9%4% to ~~709,000~~874,000 as compared to ~~649,000~~838,000 during the same period last year. Utilization for this segment ~~increased~~decreased to ~~78%~~77% during the first nine months of ~~2017~~2022 as compared to ~~74%~~79% during the same period last year. ~~The~~Growth was driven by demand for Exponent’s services across a broad range of industries and use cases. In addition to the steady increase in ~~billable hours~~litigation support and ~~utilization was due to strong growth from~~human participant studies, our proactive design and regulatory consulting services, specifically related to ongoing projects with clients in the consumer products industry. During the first nine months of 2017 we performed a large human factors assessment for a client in the consumer products industry. Wemultidisciplinary battery team continued to ~~expand our broad base of~~see demand for its solutions in electric vehicles and energy storage. Our work in international ~~construction dispute work with ongoing mining, gas terminal~~arbitrations and ~~power plant projects leveraging our integrated team of experts to deliver solutions to complex capital projects.~~integrity management advisory services continued at strong levels. Technical full-time equivalent employees in this segment increased 4%6% to ~~584~~725 during the first nine months of ~~2017~~2022 as compared to ~~563~~682 for the same period last year due to our ~~continuing~~ recruiting and retention efforts.

The increase in revenues for our Environmental and Health segment was due to an increase in billable ~~hours.~~hours and an increase in our realized billing rate. Excluding the impact of foreign exchange, revenues for this segment increased 4.3% during the first nine months of 2022. During the first nine months of ~~2017,~~2022, billable hours for this segment increased by 4%2% to ~~207,000~~236,000 as compared to ~~199,000~~232,000 during the same period last year. Utilization in this segment ~~increased~~decreased to 69% during the first nine months of ~~2017~~2022 as compared to ~~63%~~70% during the same period last year. ~~The increase~~This segment benefited from increased activity in ~~billable hours~~litigation-related projects and ~~utilization was due to growth in our chemical regulation and food safety practice where we continued to assist clients with global regulatory issues. This segment’s contribution to the large ongoing~~support of human factors assessment also contributed to the increase in billable hours and utilization. These increases were partially offset by depressed demand from the oil and gas and industrial chemical industries.participant studies. Technical full-time equivalent employees in this segment ~~decreased~~increased by 5%4% to ~~192~~219 during the first nine months of ~~2017~~2022 as compared to ~~203~~211 during the same period last ~~year. The increase in utilization and the decrease in technical full-time equivalent employees were~~year due to our ~~efforts to align resources with anticipated demand.~~recruiting and retention efforts.

~~- 21 -~~

Compensation and Related Expenses
Nine Months Ended

(in thousands, except percentages)

September 29,
2017

September 30,
2016

Percent
Change

Compensation and related expenses $ 157,447 $ 146,854 7.2 %
Percentage of total revenues 60.7 % 61.7 %

Compensation and Related Expenses


	Nine Months Ended
(in thousands, except percentages)	September 30, 2022			October 1, 2021			Percent Change
Compensation and related expenses	$	189,982		$	210,491			-9.7	%
Percentage of total revenues		49.2	%		59.7	%

The ~~increase~~decrease in compensation and related expenses during the first nine months of ~~2017~~2022 was due to ~~an increase in bonus expense, an increase in payroll expense and fringe benefits, an increase in stock-based compensation, and~~ a change in the value of assets associated with our deferred compensation ~~plan. Bonus expense increased~~plan partially offset by $5,467,000 during the first nine months of 2017 due to a corresponding increase to income before income taxes, before bonus expense, and before stock-based compensation. Payroll expense increased $2,453,000 and fringe benefits increased $291,000 due to the increase in technical full-time equivalent employees and our annual salary increases. Stock-based compensation increased by $460,000 due primarily to an increase in ~~the amortization of restricted stock unit grants.~~payroll expense, an increase in fringe benefits, and an increase in bonus expense. During the first nine months of ~~2017,~~2022, deferred compensation expense ~~increased $1,794,000~~decreased $30,881,000 with a corresponding ~~increase~~decrease to other income, net, as compared to the same period last year, due to athe change in value of assets associated with our deferred compensation plan. This ~~increase~~decrease consisted of ~~an increase~~a decrease in the value of plan assets of ~~$4,617,000~~$20,884,000 during the first nine months of ~~2017~~2022 as compared to an increase in the value of plan assets of ~~$2,823,000~~$9,997,000 during the same period last year. Payroll expense increased $7,157,000 during the first nine months of 2022 due to the increase in technical full-time equivalent employees and the impact of our annual salary adjustments. Fringe benefits increased by $1,366,000 during the first nine months of 2022 due to the increase in technical full-time equivalent employees and the impact of our annual salary adjustments. Bonus expense increased by $1,210,000 during the first nine months of 2022 due to a corresponding increase to our bonus pool which is equal to 33% of income before income taxes, interest income, bonus expense, and stock-based compensation. We expect our compensation expense, excluding the change in value of deferred compensation plan assets, to increase as we selectively add new talent and adjust compensation to market conditions.

Other Operating Expenses
Nine Months Ended

(in thousands, except percentages)

September 29,
2017

September 30,
2016

Percent
Change

Other operating expenses $ 21,966 $ 21,221 3.5 %
Percentage of total revenues 8.5 % 8.9 %

Other Operating Expenses

- 25 -


	Nine Months Ended
(in thousands, except percentages)	September 30, 2022			October 1, 2021			Percent Change
Other operating expenses	$	25,742		$	23,848			7.9	%
Percentage of total revenues		6.7	%		6.8	%

Other operating expenses include facilities-related costs, technical materials, computer-related expenses and depreciation and amortization of property, equipment and leasehold improvements. The increase in other operating expenses during the first nine months of ~~2017~~2022 was primarily due to an increase in ~~depreciation~~occupancy expense of ~~$253,000,~~$763,000, an increase in ~~occupancy expense~~information technology related expenses of ~~$158,000,~~$578,000 and an increase in ~~computer~~depreciation expense of ~~$155,000 associated with~~$281,000. The increase in occupancy expenses was due to growth in technical full-time equivalent employees and the transition back to our offices from a fully remote work environment. The increases in information technology related expenses and depreciation expense were due to continued investment in our corporate infrastructure. We expect other operating expenses to grow as we selectively add new talent, make investments in our corporate ~~infrastructure.~~infrastructure, and transition our workforce back to our offices as COVID-19 pandemic-related business restrictions are lifted.

Reimbursable Expenses
Nine Months Ended

(in thousands, except percentages)

September 29,
2017

September 30,
2016

Percent
Change

Reimbursable expenses $ 12,571 $ 11,619 8.2 %
Percentage of total revenues 4.8 % 4.9 %

Reimbursable Expenses

~~The increase in reimbursable expenses was primarily due to an increase in travel related costs associated with our large human factors assessment project.~~


	Nine Months Ended
(in thousands, except percentages)	September 30, 2022			October 1, 2021			Percent Change
Reimbursable expenses	$	34,707		$	22,249			56.0	%
Percentage of total revenues		9.0	%		6.3	%

The amount of reimbursable expenses will vary from quarter to quarter depending on the nature of our projects.

~~- 22 -~~

General and Administrative Expenses
Nine Months Ended
(in thousands, except percentages)
September 29,
2017

September 30,
2016

Percent
Change

General and administrative expenses $ 13,277 $ 11,407 16.4 %
Percentage of total revenues 5.1 % 4.8 %

The increase in ~~general and administrative~~reimbursable expenses during the first nine months of ~~2017~~2022 was primarily due to an increase in project-related travel and other project-related expenses as COVID-19 business and travel restrictions eased.

General and Administrative Expenses


	Nine Months Ended
(in thousands, except percentages)	September 30, 2022			October 1, 2021			Percent Change
General and administrative expenses	$	16,700		$	10,626			57.2	%
Percentage of total revenues		4.3	%		3.0	%

The increase in general and administrative expenses was primarily due to an increase in travel and meals of ~~$1,010,000,~~$3,303,000, an increase in ~~legal~~outside consulting expense of $1,050,000, an increase in recruiting expenses of ~~$246,000, and~~$562,000, an increase in marketing and ~~promotion~~business development expenses of ~~$141,000.~~$268,000 and several other individually insignificant increases. The increase in travel and meals was due to a firm-wide ~~managers’~~managers' meeting ~~which occurs every other year.~~held during the third quarter of 2022 and the continued easing of COVID-19 pandemic-related business and travel restrictions. The increase in outside consulting expense was due to several ongoing projects associated with investments in our corporate infrastructure. The increase in recruiting expense was due to the increase in technical full-time equivalent employees. The increase in marketing and ~~promotion~~business development expenses was due to ~~several~~an increase in our business development activities. We expect general and administrative expenses to increase as we selectively add new talent, expand our business development and staff development initiatives, and increase travel and meal expenses as COVID-19 pandemic related business restrictions phase out.

Operating Income

- 26 -


	Nine Months Ended
(in thousands, except percentages)	September 30, 2022			October 1, 2021			Percent Change
Engineering and Other Scientific	$	117,907		$	108,646			8.5	%
Environmental and Health		21,059			21,265			-1.0	%
Total segment operating income		138,966			129,911			7.0	%
Corporate operating expense		(20,159	)		(44,362	)		-54.6	%
Total operating income	$	118,807		$	85,549			38.9	%

The increase in operating income for our Engineering and Other Scientific segment during the first nine months of 2022 as compared to the same period last year was due to an increase in revenues partially offset by an increase in expenses. The increase in revenues was due to an increase in billable hours and an increase in billing rates. Growth was driven by strong demand for Exponent’s services across a broad range of industries and use cases. In addition to the steady increase in litigation support and human participant studies, our multidisciplinary battery team continued to see demand for its solutions in electric vehicles and energy storage. Our work in international arbitrations and integrity management advisory services continued at strong levels. The decrease in operating income for our Environmental and Health segment was due to investments in recruiting and marketing in our Health Practice.

Certain operating expenses are excluded from our measure of segment operating income. These expenses include the costs associated with our human resources, finance, information technology, and business development groups; the ~~firm’s 50~~^th ~~anniversary.~~deferred compensation expense/benefit due to the change in value of assets associated with our deferred compensation plan; stock-based compensation associated with restricted stock unit and stock option awards; and the change in our allowance for contract losses and doubtful accounts.

Other Income, Net
Nine Months Ended

(in thousands, except percentages)

September 29,
2017

September 30,
2016

Percent
Change

Other income, net $ 7,532 $ 5,369 40.3 %
Percentage of total revenues 2.9 % 2.3 %

The decrease in corporate operating expenses during the first nine months of 2022 as compared to the same period last year was primarily due to a decrease in deferred compensation expense partially offset by an increase in the costs associated with our human resources, finance, information technology and business development groups. During the first nine months of 2022, deferred compensation expense decreased $30,881,000, with a corresponding decrease to other income, net, as compared to the same period last year, due to the change in value of assets associated with our deferred compensation plan. This decrease consisted of a decrease in the value of plan assets of $20,884,000 during the first nine months of 2022 as compared to an increase in the value of plan assets of $9,997,000 during the same period last year.

Other Income, Net


	Nine Months Ended
(in thousands, except percentages)	September 30, 2022			October 1, 2021			Percent Change
Other income, net	$	(17,092	)	$	11,633			-246.9	%
Percentage of total revenues		-4.4	%		3.3	%

Other income, net, consists primarily of changes in the value of assets associated with our deferred compensation plan, interest income earned on available cash, cash equivalents and short-term investments, and rental income from leasing space in our Silicon Valley ~~facility.~~and Natick facilities. The decrease in other income, net, was primarily due to a change in the value of assets associated with our deferred compensation plan partially offset by an increase in the realized gain on foreign exchange and an increase in interest income. During the first nine months of ~~2017,~~2022, other income, net, ~~increased $1,794,000~~decreased $30,881,000 with a corresponding ~~increase~~decrease to deferred compensation expense, as compared to the same period last year, due to a change in the value of assets associated with our deferred compensation plan. This ~~increase~~decrease consisted of ~~an increase~~a decrease in the value of the plan assets of ~~$4,617,000~~$20,884,000 during the first nine months of ~~2017~~2022 as compared to an increase in the value of the plan assets of $2,823,000 during the same period last year. The increase in other income, net, was also due to an increase in interest income of $383,000 due to higher interest rates for our cash equivalents and short-term investments.

Income Taxes
Nine Months Ended
(in thousands, except percentages)
September 29,
2017

September 30,
2016

Percent
Change

Income taxes $ 16,778 $ 15,239 10.1 %
Percentage of total revenues 6.5 % 6.4 %
Effective tax rate 27.2 % 29.1 %

The increase in income tax expense was due to a corresponding increase in pre-tax income. The decrease in our effective tax rate was due to an increase in the excess tax benefit associated with share-based awards and a decrease in our unrecognized tax benefit. The excess tax benefit associated with share-based awards increased to $6,518,000 during the first nine months of 2017 as compared to $4,827,000$9,997,000 during the same period last year. During the first nine months of ~~2017 we released $437,000 of our unrecognized tax benefit~~2022, other income, net, increased by $1,218,000 as compared to the same period last year due to a change in the ~~completion~~realized gain/loss on foreign exchange. This increase consisted of ~~two tax audits.~~

~~LIQUIDITY AND CAPITAL RESOURCES~~

Nine Months Ended

(in thousands)

September 29,
2017

September 30,
2016

Net cash provided by operating activities $ 26,964 $ 37,234
Net cash used in investing activities (20,351 ) (19,113 )
Net cash used in financing activities (32,637 ) (44,816 )

~~- 23 -~~

~~We financed our business~~a realized gain on foreign exchange of $776,000 during the first nine months of 2017 through available cash. We invest our excess cash in cash equivalents and short-term investments. As of September 29, 2017, our cash, cash equivalents and short-term investments were $165.6 million2022 as compared to ~~$173.7 million at December 30, 2016.~~ a realized loss on foreign exchange of $442,000 during the same period last year. During the first nine months of 2022, interest income increased by $780,000 as compared to the same period last year due to an increase in interest rates.

Income Taxes

- 27 -


	Nine Months Ended
(in thousands, except percentages)	September 30, 2022			October 1, 2021			Percent Change
Income taxes	$	21,909		$	16,360			33.9	%
Percentage of total revenues		5.7	%		4.6	%
Effective tax rate		21.5	%		16.8	%

The excess tax benefit associated with stock-based awards was $6,040,000 during the first nine months of 2022 as compared to $9,889,000 during the same period last year. Excluding the impact of the excess tax benefit, the effective tax rate would have been 27.5% during the first nine months of 2022 as compared to 27.0% during the same period last year. The increase in our effective tax rate, excluding the impact of the excess tax benefit, was due primarily to an increase in non-deductible officer compensation.

- 28 -

LIQUIDITY AND CAPITAL RESOURCES

We believe our existing balances of cash, cash equivalents, ~~short-term investments~~ and cash generated from operations will be sufficient to satisfy our working capital needs, capital expenditures, outstanding commitments, stock repurchases, dividends and other liquidity requirements over at least the next twelve months.


	Nine Months Ended
(in thousands)	September 30, 2022			October 1, 2021
Net cash provided by operating activities	$	53,237		$	70,378
Net cash (used in) / provided by investing activities		(9,108	)		14,569
Net cash used in financing activities		(190,556	)		(52,766	)

We financed our business during the first nine months of 2022 through available cash. As of September 30, 2022, our cash and cash equivalents were $148,443,000 as compared to $297,687,000 at December 31, 2021.

Generally, our net cash provided by operating activities is used to fund our day to day operating activities. First quarter operating cash requirements are generally higher due to payment in the first quarter of our annual bonuses accrued during the prior year. Our largest source of operating cash flows is collections from our clients. Our primary uses of cash from operating activities are for employee related expenditures, leased facilities, taxes, and general operating expenses including marketing and travel. ~~The decrease in net cash provided by operating activities during the first nine months of 2017 as compared to the same period last year was primarily due to an increase in accounts receivable.~~

The increase in net cash used in investing activities during the first nine months of ~~2017,~~2022, as compared to the net cash provided by investing activities during the same period last year, was due to a decrease in the maturity of short-term investments partially offset by a decrease in the purchase of short-term investments and an increase in capital expenditures due to an increase in investment in our corporate infrastructure.

The increase in net cash used in financing activities during the first nine months of 2022, as compared to the same period last year, was due to an increase in ~~the purchase~~repurchases of ~~short-term investments, net of maturities~~our common stock and an increase in dividends partially offset by a ~~decrease in capital expenditures.~~

The decrease in net cash used in financing activities during the first nine months of 2017, as compared to the same period last year, was due to a decrease in repurchases of common stock partially offset by an increasereduction in payroll taxes for restricted stock ~~units, and an increase in dividend payments.~~units.

We expect to continue our investing activities, including capital expenditures. Furthermore, cash reserves may be used to repurchase shares of common stock under our stock repurchase programs, pay dividends, or strategically acquire professional service firms that are complementary to our business.

For a summary of our commitments to make future payments under contractual obligations, see “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources” in our 2016 Annual Report.

During April 2017, we entered into two agreements to purchase a total of 2.9 acres of land in Natick, Massachusetts on which we intend to build office and laboratory facilities. The total purchase price is $5,200,000. The purchase agreements are contingent on several items including feasibility studies, environmental assessments, and government approvals. If we determine that the property is unsuitable for the planned project, we can terminate the agreements to purchase the land at our sole discretion.

~~There have been no other material changes in our contractual obligations since December 30, 2016.~~

We maintain a nonqualified deferred compensation plan for the benefit of a select group of highly compensated employees. Vested amounts due under the plan of ~~$50,778,000~~$85,453,000 were recorded as a long-term liability on our unaudited condensed consolidated balance sheet at September ~~29, 2017. Company~~30, 2022. Vested amounts due under the plan of $9,049,000 were recorded as a current liability on our unaudited condensed consolidated balance sheet at September 30, 2022. Our assets that are earmarked to pay benefits under the plan are held in a rabbi trust and are subject to the claims of our creditors. As of September ~~29, 2017,~~30, 2022, invested amounts under the plan of ~~$46,678,000~~$83,722,000 were recorded as a long-term asset on our unaudited condensed consolidated balance sheet. As of September 30, 2022, invested amounts under the plan of $10,857,000 were recorded as a current asset on our unaudited condensed consolidated balance sheet.

As permitted under Delaware law, we have agreements whereby we indemnify our officers and directors for certain events or occurrences while the officer or director is, or was, serving at our request in such capacity. The indemnification period covers all pertinent events and occurrences during the officer’s or director’s lifetime. The maximum potential amount of future payments we could be required to make under these indemnification agreements is unlimited; however, we have director and officer insurance coverage that reduces our exposure and enables us to recover a portion of any future amounts paid.

- 2429 -

Non-GAAP Financial Measures

Regulation G, Conditions for Use of Non-Generally Accepted Accounting Principles ("Non-GAAP") Financial Measures, and other ~~SEC~~U.S. Securities and Exchange Commission (“SEC”) rules and regulations define and prescribe the conditions for use of Non-GAAP financial information. Generally, a Non-GAAP financial measure is a numerical measure of a company's performance, financial position or cash flow that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with GAAP. We closely monitor two financial measures, EBITDA and EBITDAS, which meet the definition of Non-GAAP financial measures. We define EBITDA as net income before income taxes, net interest income, depreciation and amortization. We define EBITDAS as EBITDA before stock-based compensation. The Company regards EBITDA and EBITDAS as useful measures of operating performance to complement operating income, net income and other GAAP financial performance measures. Additionally, management believes that EBITDA and EBITDAS provide meaningful comparisons of past, present and future operating results. These measures are used to evaluate our financial results, develop budgets and determine employee compensation. These measures, however, should be considered in addition to, and not as a substitute for or superior to, operating income, cash flows, or other measures of financial performance prepared in accordance with GAAP. A reconciliation of the Non-GAAP measures to the nearest comparable GAAP measure is set forth below.

The following table shows EBITDA (determined as shown in the reconciliation table below) as a percentage of revenues before reimbursements for the three ~~and nine~~ months ended September ~~29, 2017~~30, 2022 and ~~September~~October 1, 2021:


	Three Months Ended						Nine Months Ended
(in thousands, except percentages)	September 30, 2022			October 1, 2021			September 30, 2022			October 1, 2021
Revenues before reimbursements	$	115,143		$	108,467		$	351,231		$	330,514
EBITDA	$	34,561		$	34,021		$	106,105		$	102,071
EBITDA as a % of revenues before reimbursements		30.0	%		31.4	%		30.2	%		30.9	%

- 30 ~~2016:~~-

Three Months Ended Nine Months Ended

(in thousands, except percentages)

September 29,
2017

September 30,
2016

September 29,
2017

September 30,
2016

Revenues before reimbursements $ 82,359 $ 74,160 $ 246,946 $ 226,444

EBITDA $ 23,225 $ 19,323 $ 65,678 $ 56,351

EBITDA as a % of revenues before reimbursements 28.2 % 26.1 % 26.6 % 24.9 %

The ~~increase~~decrease in EBITDA as a percentage of revenues before reimbursements during the third quarter of ~~2017~~2022 as compared to the same period last year was primarily due to the decrease in utilization and an increase in ~~utilization. Utilization for~~other operating and general and administrative expenses. Our utilization decreased to 73% during the third quarter of ~~2017 was 76%~~2022 as compared to ~~70%~~76% during the same period last year. Utilization during the third quarter of 2021 was historically strong. Other operating and general and administrative expenses increased during the third quarter of 2022 due to an increase in travel and meals associated with a firm-wide managers' meeting held during the third quarter of 2022 and the continued easing of COVID-19 pandemic-related business and travel restrictions, an increase in technical full-time equivalent employees, investments in our corporate infrastructure, and an increase in marketing and business development activities.

The ~~increase~~decrease in EBITDA as a percentage of revenues before reimbursements during the first nine months of ~~2017~~2022 as compared to the same period last year was primarily due to a decrease in utilization and an increase in ~~utilization. Utilization for~~other operating and general and administrative expenses. Other operating and general and administrative expenses increased during the first nine months of ~~2017 was 76% as compared~~2022 due to ~~71%~~an increase in travel and meals associated with a firm-wide managers' meeting held during the ~~same period last year.~~third quarter of 2022 and the continued easing of COVID-19 pandemic-related business and travel restrictions, an increase in technical full-time equivalent employees, investments in our corporate infrastructure, and an increase in marketing and business development activities.

~~- 25 -~~

The following table is a reconciliation of EBITDA and EBITDAS to the most comparable GAAP measure, net income, for the three and nine months ended September ~~29, 2017~~30, 2022 and ~~September 30, 2016:~~October 1, 2021:


	Three Months Ended						Nine Months Ended						Three Months Ended						Nine Months Ended
(in thousands)	September 29, 2017			September 30, 2016			September 29, 2017			September 30, 2016			September 30, 2022			October 1, 2021			September 30, 2022			October 1, 2021

Net income	$	14,643		$	11,289		$	45,010		$	37,092		$	24,442		$	24,574		$	79,806		$	80,822

Add back (subtract):

Income taxes		7,387			6,631			16,778			15,239			9,034			7,815			21,909			16,360
Interest income, net		(372	)		(179	)		(872	)		(489	)		(638	)		(13	)		(834	)		(54	)
Depreciation and amortization		1,567			1,582			4,762			4,509			1,723			1,645			5,224			4,943

EBITDA		23,225			19,323			65,678			56,351			34,561			34,021			106,105			102,071

Stock-based compensation		3,541			2,730			12,728			10,659			4,605			4,365			16,072			15,239

EBITDAS	$	26,766		$	22,053		$	78,406		$	67,010		$	39,166		$	38,386		$	122,177		$	117,310

- 31 -

~~Item 3.~~

~~Quantitative and Qualitative Disclosures About Market Risk~~

Item 3. Quantitative and Qualitative Disclosures About Market Risk

We are exposed to interest rate risk associated with our balances of cash and cash ~~equivalents and short-term investments.~~equivalents. We manage our interest rate risk by maintaining an investment portfolio primarily consisting of debt instruments with high credit quality and relatively short average effective maturities in accordance with our investment policy. The maximum effective maturity of any issue in our portfolio is 3 years and the maximum average effective maturity of the portfolio cannot exceed 12 months. If interest rates were to instantaneously increase or decrease by 100 basis points, the change in the fair market value of our portfolio of cash equivalents ~~and short-term investments~~ would not have a material impact on our financial statements. We do not use derivative financial instruments in our portfolio. There have not been any material changes during the period covered by this Quarterly Report on Form 10-Q to our interest rate risk exposures, or how these exposures are managed. Notwithstanding our efforts to manage interest rate risk, there can be no assurances that we will be adequately protected against the risks associated with interest rate fluctuations.

We have foreign currency risk related to our revenues and expenses denominated in currencies other than the U.S. dollar, primarily the British Pound, the Euro, the Chinese Yuan, and the ~~Chinese Yuan.~~Hong Kong Dollar. Accordingly, changes in exchange rates may negatively affect the revenues and net income of our foreign subsidiaries as expressed in U.S. dollars.

At September ~~29, 2017,~~30, 2022, we had net assets of approximately ~~$10.0~~$14.4 million with a functional currency of the British Pound, net assets of approximately ~~$4.1 million with a functional currency of the Euro, and net assets of approximately $4.0~~$3.4 million with a functional currency of the Chinese Yuan, and net assets of approximately $5.5 million with a functional currency of the Hong Kong Dollar associated with our operations in the United Kingdom, ~~Germany,~~China, and ~~China,~~Hong Kong, respectively.

We also have foreign currency risk related to foreign currency transactions and monetary assets and liabilities denominated in currencies that are not the functional currency. We have experienced and will continue to experience fluctuations in our net income as a result of gains (losses) on these foreign currency transactions and the remeasurement of monetary assets and liabilities. At September ~~29, 2017,~~30, 2022, we had net assets denominated in the non-functional currency of approximately ~~$2.6~~$8.3 million. ~~As such, a ten percent change in the value of the local currency would result in a $260,000 foreign currency gain or loss in our results of operations.~~

We do not use foreign exchange contracts to hedge any foreign currency exposures. To date, the impacts of foreign currency exchange rate changes on our consolidated revenues and consolidated net income have not been ~~material.~~significant. However, our continued international growth increases our exposure to exchange rate fluctuations and as a result such fluctuations could have a significant impact on our future results of operations.

~~- 26 -~~

~~Item 4.~~

~~Controls and Procedures~~

Item 4. Controls and Procedures

~~(a)~~

~~Evaluation of Disclosure Controls and Procedures~~

(a)

Evaluation of Disclosure Controls and Procedures

As required by Rule 13a-15(b) of the Securities Exchange Act of 1934, as amended, an evaluation was performed under the supervision and with the participation of the Company’s management, including the Chief Executive Officer and the Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) of the Securities Exchange Act of 1934, as amended) as of the end of the period covered by this quarterly report. Based on that evaluation, the Company’s management, including the Chief Executive Officer and the Chief Financial Officer, concluded that, as of September ~~29, 2017,~~30, 2022, the Company’s disclosure controls and procedures were effective.

We ~~intend to~~ review and evaluate the design and effectiveness of our disclosure controls and procedures on an ongoing basis, to improve our controls and procedures over time and to correct any deficiencies that we may discover in the future. Our goal is to ensure that our senior management has timely access to all material financial and non-financial information concerning our business. While we believe the present design of our disclosure controls and procedures is effective to achieve our goal, future events affecting our business may cause us to significantly modify our disclosure controls and procedures.

(b)

Changes in Internal Control over Financial Reporting

~~(b)~~

~~Changes in Internal Control over Financial Reporting~~

There were no changes in our internal control over financial reporting during the ~~three month~~three-month period ended September ~~29, 2017~~30, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

- 32 -

PART II - OTHER INFORMATION

~~Item 1.~~

~~Legal Proceedings~~

Item 1. Legal Proceedings

Exponent is not engaged in any material legal proceedings.

~~Item 1A.~~

~~Risk Factors~~

Item 1A. Risk Factors

There have been no material changes from risk factors as previously discussed under the heading “Risk Factors” in the Company’s ~~2016~~2021 Annual Report.

~~Item 2.~~

~~Unregistered Sales of Equity Securities and Use of Proceeds~~

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

The following table provides information on the Company’s repurchases of the Company’s common stock for the three months ended September ~~29, 2017~~30, 2022 (in thousands, except price per share):

Total Number
of Shares
Purchased Average Price
Paid Per
Share Total Number of
Shares Purchased as
Part of Publicly
Announced Programs Approximate Dollar
Value of Shares That
May Yet Be
Purchased Under the
Programs⁽¹⁾

July 1 to July 28 - $ - - $ 50,303
July 29 to August 25 - - - $ 50,303
August 26 to September 29 22 66.06 22 $ 48,876
Total 22 $ 66.06 22 $ 48,876


	Total Number of Shares Purchased		Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Programs		Approximate Dollar Value of Shares That May Yet Be Purchased Under the Programs (1)
July 2 to July 29		-	$	-		-	$	106,611
July 30 to August 26		-		-		-	$	106,611
August 27 to September 30		334		92.04		334	$	75,828
Total		334	$	92.04		334	$	75,828

⁽¹⁾

~~- 27 -~~

(1)

On May 29, 2020, the Company’s Board of Directors announced $45,000,000 for repurchase of the Company’s common stock. On February 22, 2022, the Company’s Board of Directors announced an additional $150,000,000 for repurchase of the Company’s common stock. These repurchase programs have no expiration dates.

Repurchases of the Company’s common stock were affected pursuant to a repurchase program authorized by the Company’s Board of Directors.

~~Item 3.~~

~~Defaults Upon Senior Securities~~

Item 3. Defaults Upon Senior Securities

Not applicable.

~~Item 4.~~

~~Mine Safety Disclosures~~

Item 4. Mine Safety Disclosures

Not applicable.

~~Item 5.~~

~~Other Information~~

Item 5. Other Information

Not applicable.

- 33 -

~~Item 6.~~

~~Exhibits~~

Item 6. Exhibits

(a)

Exhibit Index

	~~(a)~~
31.1	~~Exhibit Index~~

	~~31.1~~	Certification of Chief Executive Officer pursuant to Rule 13a – 14(a) under the Securities Exchange Act of 1934.

31.2	~~31.2~~	Certification of Chief Financial Officer pursuant to Rule 13a – 14(a) under the Securities Exchange Act of 1934.

32.1	~~32.1~~	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350.

32.2	~~32.2~~	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350.

101.INS	~~101.INS~~	Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH	~~101.SCH~~	Inline XBRL Taxonomy Extension Schema Document

101.CAL	~~101.CAL~~	Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF	~~101.DEF~~	Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB	~~101.LAB~~	Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE	~~101.PRE~~	Inline XBRL Taxonomy Extension Presentation Linkbase Document

Exhibit 104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

- 2834 -

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	~~EXPONENT, INC.~~
	~~(Registrant)~~	EXPONENT, INC.
		(Registrant)

Date: November ~~3, 2017~~4, 2022
		/s/ ~~Paul R. Johnston~~Catherine Ford Corrigan
	~~Paul R. Johnston,~~	Catherine Ford Corrigan, Ph.D., Chief Executive Officer


		/s/ Richard L. Schlenker
		Richard L. Schlenker, Chief Financial Officer

- 2935 -

~~DELAWARE~~	~~77-0218904~~
delaware		77-0218904
(State or other jurisdiction of		(I.R.S. Employer Identification No.)
incorporation or organization)

~~149 COMMONWEALTH DRIVE, MENLO PARK, CALIFORNIA~~	~~94025~~

149 COMMONWEALTH DRIVE, MENLO PARK,California		94025
(Address of principal executive office)		(Zip Code)

~~Yes~~x
Yes		☒		No¨

~~Yes~~x
Yes		☒			No¨


Large accelerated filerx	☒		Accelerated filer¨	☐	Non-accelerated filer¨	☐	Smaller reporting company¨	☐
		~~(Do not check if a smaller~~ ~~reporting company)~~

Emerging growth company¨	☐

	x
☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

	¨
☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, par value $0.001 per share	EXPO	Nasdaq Global Select Market

		~~Page~~
				Page

PART I – FINANCIAL INFORMATION				3

Item 1.		Financial Statements (unaudited):		3

		Condensed Consolidated Balance Sheets as of September ~~29, 2017~~30, 2022 and December ~~30, 2016~~31, 2021		3

		Condensed Consolidated Statements of Income For the Three and Nine Months Ended September ~~29, 2017~~30, 2022 and ~~September 30, 2016~~October 1, 2021		4

		Condensed Consolidated Statements of Comprehensive Income For the Three and Nine Months Ended September ~~29, 2017~~30, 2022 and October 1, 2021		5

		Condensed Consolidated Statements of Stockholders’ Equity For the Three and Nine Months Ended September 30, ~~2016~~2022 and October 1, 2021	5	6

		Condensed Consolidated Statements of Cash Flows For the Nine Months Ended September ~~29, 2017~~30, 2022 and ~~September 30, 2016~~October 1, 2021	6	8

		Notes to Unaudited Condensed Consolidated Financial Statements	7	9

Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations	17	20

Item 3.		Quantitative and Qualitative Disclosures About Market Risk	26	32

Item 4.		Controls and Procedures	27	32

PART II – OTHER INFORMATION				33

Item 1.		Legal Proceedings	27	33

Item 1A.		Risk Factors	27	33

Item 2.		Unregistered Sales of Equity Securities and Use of Proceeds	27	33

Item 3.		Defaults Upon Senior Securities	28	33

Item 4.		Mine Safety Disclosures	28	33

Item 5.		Other Information	28	33

Item 6.	~~Exhibits~~	28Exhibits		34

~~Signatures~~		29Signatures		35

	September 29,			December 30,
	2017			2016			September 30, 2022			December 31, 2021
Assets
Current assets:
Cash and cash equivalents	$	89,809		$	114,967		$	148,443		$	297,687
Short-term investments		75,782			58,755
Accounts receivable, net of allowance for contract losses and doubtful accounts of $3,847 and $3,417 at September 29, 2017 and December 30, 2016, respectively		124,803			87,409
Prepaid expenses and other assets		10,692			12,913
Accounts receivable, net of allowance for contract losses and doubtful accounts of $6,157 and $4,423 at September 30, 2022 and December 31, 2021, respectively								166,014			139,861
Prepaid expenses and other current assets								18,055			15,214
Total current assets		301,086			274,044			332,512			452,762

Property, equipment and leasehold improvements, net		35,180			36,710			64,289			59,971
Operating lease right-of-use assets								18,088			14,370
Goodwill		8,607			8,607			8,607			8,607
Deferred income taxes		42,574			42,166			50,501			46,546
Deferred compensation plan assets		46,678			41,153			83,722			99,962
Other assets		1,515			1,064			1,284			1,521
Total assets	$	435,640		$	403,744		$	559,003		$	683,739

Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable and accrued liabilities	$	13,813		$	10,073		$	31,825		$	24,504
Accrued payroll and employee benefits		59,696			62,539			84,938			103,552
Deferred revenues		7,776			7,624			15,791			19,762
Operating lease liabilities								5,363			5,164
Total current liabilities		81,285			80,236			137,917			152,982

Other liabilities		2,161			2,005			2,639			2,886
Deferred compensation		50,778			46,503
Deferred rent		1,340			1,654
Deferred compensation plan liabilities								85,453			100,999
Operating lease liabilities								13,194			9,807
Total liabilities		135,564			130,398			239,203			266,674

Stockholders’ equity:
Common stock, $0.001 par value; 80,000 shares authorized; 32,853 shares issued at September 29, 2017 and December 30, 2016		33			33
Common stock, $0.001 par value; 120,000 shares authorized; 65,707 shares issued at September 30, 2022 and December 31, 2021								66			66
Additional paid-in capital		208,583			194,632			298,589			281,419
Accumulated other comprehensive income (loss)
Investment securities, available-for-sale		(129	)		(146	)
Accumulated other comprehensive loss
Foreign currency translation adjustments		(1,934	)		(2,980	)		(5,136	)		(1,983	)
		(2,063	)		(3,126	)
Retained earnings		313,277			291,243			518,631			478,370
Treasury stock, at cost; 7,043 and 7,256 shares held at September 29, 2017 and December 30, 2016, respectively		(219,754	)		(209,436	)
Treasury stock, at cost; 14,918 and 13,591 shares held at September 30, 2022 and December 31, 2021, respectively								(492,350	)		(340,807	)
Total stockholders’ equity		300,076			273,346			319,800			417,065
Total liabilities and stockholders’ equity	$	435,640		$	403,744		$	559,003		$	683,739


	Three and Nine Months Ended September 30, 2022
	Common Stock				Additional paid-in			Accumulated other comprehensive			Retained			Treasury Stock
(In thousands)	Shares		Amount		capital			loss			earnings			Shares			Amount			Total
Balance at December 31, 2021		65,707	$	66	$	281,419		$	(1,983	)	$	478,370			13,591		$	(340,807	)	$	417,065
Employee stock purchase plan		-		-		961			-			-			(12	)		109			1,070
Amortization of unrecognized stock-based compensation		-		-		5,939			-			-			-			-			5,939
Purchase of treasury stock		-		-		-			-			-			1,273			(111,843	)		(111,843	)
Foreign currency translation adjustments		-		-		-			(1,660	)		-			-			-			(1,660	)
Grant of restricted stock units to settle accrued bonus		-		-		10,200			-			-			-			-			10,200
Settlement of restricted stock units		-		-		(2,421	)		-			(1,392	)		(262	)		(9,091	)		(12,904	)
Dividends and dividend equivalent rights		-		-		-			-			(25,737	)		-			-			(25,737	)
Net income		-		-		-			-			55,364			-			-			55,364
Balance at July 1, 2022		65,707	$	66	$	296,098		$	(3,643	)	$	506,605			14,590		$	(461,632	)	$	337,494
Employee stock purchase plan		-		-		492			-			-			(7	)		65			557
Amortization of unrecognized stock-based compensation		-		-		1,999			-			-			-			-			1,999
Purchase of treasury stock		-		-		-			-			-			335			(30,783	)		(30,783	)
Foreign currency translation adjustments		-		-		-			(1,493	)		-			-			-			(1,493	)
Dividends and dividend equivalent rights		-		-		-			-			(12,416	)		-			-			(12,416	)
Net income		-		-		-			-			24,442			-			-			24,442
Balance at September 30, 2022		65,707	$	66	$	298,589		$	(5,136	)	$	518,631			14,918		$	(492,350	)	$	319,800


	Three and Nine Months Ended October 1, 2021
	Common Stock				Additional paid-in			Accumulated other comprehensive			Retained			Treasury Stock
(In thousands)	Shares		Amount		capital			income (loss)			earnings			Shares			Amount			Total
Balance at January 1, 2021		65,707	$	66	$	265,328		$	(1,932	)	$	421,809			13,903		$	(323,773	)	$	361,498
Employee stock purchase plan		-		-		909			-			-			(12	)		114			1,023
Amortization of unrecognized stock-based compensation		-		-		5,676			-			-			-			-			5,676
Purchase of treasury stock		-		-		-			-			-			79			(7,000	)		(7,000	)
Foreign currency translation adjustments		-		-		-			211			-			-			-			211
Grant of restricted stock units to settle accrued bonus		-		-		7,637			-			-			-			-			7,637
Settlement of restricted stock units		-		-		(3,269	)		-			(1,679	)		(322	)		(10,718	)		(15,666	)
Unrealized gain on investments		-		-		-			(65	)		61			-			-			(4	)
Dividends and dividend equivalent rights		-		-		-			-			(21,856	)		-			-			(21,856	)
Net income		-		-		-			-			56,248			-			-			56,248
Balance at July 2, 2021		65,707	$	66	$	276,281		$	(1,786	)	$	454,583			13,648		$	(341,377	)	$	387,767
Employee stock purchase plan		-		-		471			-			-			(5	)		47			518
Exercise of stock options						658									(48	)		477			1,135
Amortization of unrecognized stock-based compensation		-		-		1,840			-			-			-			-			1,840
Foreign currency translation adjustments		-		-		-			(266	)		-			-			-			(266	)
Dividends and dividend equivalent rights		-		-		-			-			(10,579	)		-			-			(10,579	)
Net income		-		-		-			-			24,574			-			-			24,574
Balance at October 1, 2021		65,707	$	66	$	279,250		$	(2,052	)	$	468,578		$	13,595		$	(340,853	)	$	404,989

	Fiscal Year 2017
	Dividends		Amount
	Per Share		(in thousands)
First Quarter	$	0.21	$	5,374
Second Quarter		0.21		5,424
Third Quarter		0.21		5,424
Total	$	0.63	$	16,222

	Fiscal Year 2016
	Dividends		Amount
	Per Share		(in thousands)
First Quarter	$	0.18	$	4,628
Second Quarter		0.18		4,675
Third Quarter		0.18		4,659
Fourth Quarter		0.18		4,607
Total	$	0.72	$	18,569

	Fair Value Measurements at Reporting Date Using
(In thousands)	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)

Assets
Money market securities⁽¹⁾	$	5,265	$	5,265	$	-	$	-

Fixed income available-for-sale securities⁽²⁾		75,782		-		75,782		-

Fixed income trading securities held in deferred compensation plan⁽³⁾		14,210	��	14,210		-		-

Equity trading securities held in deferred compensation plan⁽³⁾		36,569		36,569		-		-
Total	$	131,826	$	56,044	$	75,782	$	-

Liabilities
Deferred compensation plan⁽⁴⁾		56,479		56,479		-		-
Total	$	56,479	$	56,479	$	-	$	-

~~Yes~~¨
Yes				Nox		☒


												Gross		Gross
	Amortized		Unrealized		Unrealized			Estimated		Amortized		Unrealized		Unrealized		Estimated
(In thousands)	Cost		Gains		Losses			Fair Value		Cost		Gains		Losses		Fair Value

Classified as current assets:
Cash	$	84,544	$	-	$	-		$	84,544	$	96,649	$	-	$	-	$	96,649

Cash equivalents:
Money market securities		5,265		-		-			5,265		51,794		-		-		51,794
Total cash equivalents		5,265		-		-			5,265		51,794		-		-		51,794
Total cash and cash equivalents		89,809		-		-			89,809		148,443		-		-		148,443

Short-term investments:
U.S. agency securities		75,997		-		(215	)		75,782
Total short-term investments		75,997		-		(215	)		75,782

Total cash, cash equivalents and short-term investments	$	165,806	$	-	$	(215	)	$	165,591


	September 29,			December 30,			September 30,			December 31,
(In thousands)	2017			2016			2022			2021

Billed accounts receivable	$	90,263		$	60,510		$	110,428		$	102,028
Unbilled accounts receivable		38,387			30,316			61,743			42,256
Allowance for contract losses and doubtful accounts		(3,847	)		(3,417	)		(6,157	)		(4,423	)
Total accounts receivable, net	$	124,803		$	87,409		$	166,014		$	139,861


Balance at December 31, 2021	$	4,423
Provision for contract losses and doubtful accounts		2,112
Write-offs		(378	)
Balance at September 30, 2022	$	6,157


	September 30, 2022	December 31, 2021
Weighted Average Remaining Lease Term	4.3 years	4.1 years
Weighted Average Discount Rate	4.0%	4.2%


	Operating
(In thousands)	Leases
2022 (excluding the nine months ended September 30, 2022)		1,413
2023		5,885
2024		4,178
2025		3,296
2026		3,084
2027		2,589
2028		162
Total lease payments	$	20,607
Less imputed interest		(2,050	)
Total lease liability	$	18,557

	Total Number of Shares Purchased		Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Programs		Approximate Dollar Value of Shares That May Yet Be Purchased Under the Programs⁽¹⁾

July 1 to July 28		-	$	-		-	$	50,303
July 29 to August 25		-		-		-	$	50,303
August 26 to September 29		22		66.06		22	$	48,876
Total		22	$	66.06		22	$	48,876