10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended June 30, 2017

OR

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

For the transition period from                               to                              

Commission File Number 0-18655

EXPONENT, INC.

(Exact name of registrant as specified in its charter)

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

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

(650) 326-9400

(Registrant’s telephone number, including area code)

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.

Yes x                No ¨

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).    

Yes x                No ¨

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.

Large accelerated filer x	Accelerated filer ¨	Non-accelerated filer ¨	Smaller reporting company ¨
		(Do not check if a smaller
		reporting company)

Emerging growth company ¨

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).

Yes ¨               No x

As of July 28, 2017, the latest practicable date, the registrant had 25,793,398 shares of common stock, $0.001 par value per share, outstanding.

EXPONENT, INC.

FORM 10-Q

TABLE OF CONTENTS

		Page
PART I – FINANCIAL INFORMATION
Item 1.	Financial Statements (unaudited):
	Condensed Consolidated Balance Sheets June 30, 2017 and December 30, 2016	3
	Condensed Consolidated Statements of Income Three and Six Months Ended June 30, 2017 and July 1, 2016	4
	Condensed Consolidated Statements of Comprehensive Income Three and Six Months Ended June 30, 2017 and July 1, 2016	5
	Condensed Consolidated Statements of Cash Flows Three and Six Months Ended June 30, 2017 and July 1, 2016	6
	Notes to Unaudited Condensed Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	17
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	25
Item 4.	Controls and Procedures	26
PART II – OTHER INFORMATION
Item 1.	Legal Proceedings	26
Item 1A.	Risk Factors	26
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	27
Item 3.	Defaults Upon Senior Securities	27
Item 4.	Mine Safety Disclosures	27
Item 5.	Other Information	27
Item 6.	Exhibits	27
Signatures		28

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PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

EXPONENT, INC.

Condensed Consolidated Balance Sheets

June 30, 2017 and December 30, 2016

(in thousands, except par value)

(unaudited)

	June 30,			December 30,
	2017			2016
Assets
Current assets:
Cash and cash equivalents	$	90,233		$	114,967
Short-term investments		71,763			58,755
Accounts receivable, net of allowance for contract losses and doubtful accounts of $3,333 and $3,417 at June 30, 2017 and December 30, 2016, respectively		107,444			87,409
Prepaid expenses and other assets		9,283			12,913
Total current assets		278,723			274,044
Property, equipment and leasehold improvements, net		35,892			36,710
Goodwill		8,607			8,607
Deferred income taxes		40,945			42,166
Deferred compensation plan assets		44,590			41,153
Other assets		918			1,064
Total assets	$	409,675		$	403,744
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable and accrued liabilities	$	10,610		$	10,073
Accrued payroll and employee benefits		50,904			62,539
Deferred revenues		6,602			7,624
Total current liabilities		68,116			80,236
Other liabilities		2,244			2,005
Deferred compensation		48,467			46,503
Deferred rent		1,449			1,654
Total liabilities		120,276			130,398
Stockholders’ equity:
Common stock, $0.001 par value; 80,000 shares authorized; 32,853 shares issued at June 30, 2017 and December 30, 2016		33			33
Additional paid-in capital		206,752			194,632
Accumulated other comprehensive income (loss)
Investment securities, available-for-sale		(142	)		(146	)
Foreign currency translation adjustments		(2,390	)		(2,980	)
		(2,532	)		(3,126	)
Retained earnings		304,224			291,243
Treasury stock, at cost; 7,060 and 7,256 shares held at June 30, 2017 and December 30, 2016, respectively		(219,078	)		(209,436	)
Total stockholders’ equity		289,399			273,346
Total liabilities and stockholders’ equity	$	409,675		$	403,744

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

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EXPONENT, INC.

Condensed Consolidated Statements of Income

For the Three and Six Months Ended June 30, 2017 and July 1, 2016

(in thousands, except per share data)

(unaudited)

	Three Months Ended				Six Months Ended
	June 30, 2017		July 1, 2016		June 30, 2017		July 1, 2016
Revenues:
Revenues before reimbursements	$	84,120	$	73,334	$	164,587	$	152,284
Reimbursements		3,720		3,961		7,375		8,167
Revenues		87,840		77,295		171,962		160,451
Operating expenses:
Compensation and related expenses		51,536		47,040		105,954		99,057
Other operating expenses		7,275		7,218		14,466		14,201
Reimbursable expenses		3,720		3,961		7,375		8,167
General and administrative expenses		4,992		4,145		9,216		7,659
Total operating expenses		67,523		62,364		137,011		129,084
Operating income		20,317		14,931		34,951		31,367
Other income, net:
Interest income, net		266		171		500		310
Miscellaneous income, net		1,765		1,575		4,307		2,734
Total other income, net		2,031		1,746		4,807		3,044
Income before income taxes		22,348		16,677		39,758		34,411
Income taxes		8,557		6,224		9,391		8,608
Net income	$	13,791	$	10,453	$	30,367	$	25,803
Net income per share:
Basic	$	0.52	$	0.39	$	1.15	$	0.97
Diluted	$	0.51	$	0.38	$	1.13	$	0.95
Shares used in per share computations:
Basic		26,415		26,631		26,358		26,572
Diluted		26,968		27,264		26,980		27,256
Cash dividends declared per common share	$	0.21	$	0.18	$	0.42	$	0.36

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

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EXPONENT, INC.

Condensed Consolidated Statements of Comprehensive Income

For the Three and Six Months Ended June 30, 2017 and July 1, 2016

(in thousands)

(unaudited)

	Three Months Ended						Six Months Ended
	June 30, 2017			July 1, 2016			June 30, 2017		July 1, 2016
Net income	$	13,791		$	10,453		$	30,367	$	25,803
Other comprehensive income (loss):
Foreign currency translation adjustments, net of tax		454			(505	)		590		(510	)
Unrealized (losses) gains on available-for- sale investment securities arising during the period, net of tax		(32	)		(1	)		4		84
Comprehensive income	$	14,213		$	9,947		$	30,961	$	25,377

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

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EXPONENT, INC.

Condensed Consolidated Statements of Cash Flows

For the Six Months Ended June 30, 2017 and July 1, 2016

(in thousands)

(unaudited)

	Six Months Ended
	June 30, 2017			July 1, 2016
Cash flows from operating activities:
Net income	$	30,367		$	25,803
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization of property, equipment and leasehold improvements		3,195			2,927
Amortization of premiums and accretion of discounts on short-term investments		-			14
Deferred rent		(205	)		(184	)
Provision for contract losses and doubtful accounts		805			1,131
Stock-based compensation		9,187			7,929
Deferred income tax provision		1,217			424
Changes in operating assets and liabilities:
Accounts receivable		(20,840	)		(4,863	)
Prepaid expenses and other assets		3,365			(5,198	)
Accounts payable and accrued liabilities		928			(1,716	)
Accrued payroll and employee benefits		(9,806	)		(9,712	)
Deferred revenues		(1,022	)		(2,010	)
Net cash provided by operating activities		17,191			14,545
Cash flows from investing activities:
Capital expenditures		(2,526	)		(3,382	)
Purchase of short-term investments		(13,000	)		(24,000	)
Maturity of short-term investments		-			21,450
Net cash used in investing activities		(15,526	)		(5,932	)
Cash flows from financing activities:
Payroll taxes for restricted stock units		(9,520	)		(7,613	)
Repurchase of common stock		(7,004	)		(4,458	)
Exercise of share-based payment awards		638			1,229
Dividends and dividend equivalents rights		(10,995	)		(9,515	)
Net cash used in financing activities		(26,881	)		(20,357	)
Effect of foreign currency exchange rates on cash and cash equivalents		482			(464	)
Net decrease in cash and cash equivalents		(24,734	)		(12,208	)
Cash and cash equivalents at beginning of period		114,967			125,751
Cash and cash equivalents at end of period	$	90,233		$	113,543

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

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EXPONENT, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1: Basis of Presentation

Exponent, Inc. (referred to as the “Company” or “Exponent”) is an engineering and scientific consulting firm that provides solutions to complex problems. The Company operates on a 52-53 week fiscal year ending on the Friday closest to the last day of December.

The accompanying unaudited condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information, the instructions to Form 10-Q and Article 10 of Regulation S-X promulgated by the Securities and Exchange Commission. Accordingly, they do not contain all the information and notes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, all adjustments which are necessary for the fair presentation of the condensed consolidated financial statements have been included and all such adjustments are of a normal and recurring nature. The operating results for the three and six months ended June 30, 2017 are not necessarily representative of the results of future quarterly or annual periods. The following information should be read in conjunction with the audited consolidated financial statements and accompanying notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 30, 2016, which was filed with the U.S. Securities and Exchange Commission on February 24, 2017.

The unaudited condensed consolidated financial statements include the accounts of Exponent, Inc. and its subsidiaries, which are all wholly owned. All intercompany accounts and transactions have been eliminated in consolidation.

Dividend. The Company declared and paid cash dividends per common share during the periods presented as follows:

	Fiscal Year 2017
	Dividends		Amount
	Per Share		(in thousands)
First Quarter	$	0.21	$	5,374
Second Quarter		0.21		5,424
Total	$	0.42	$	10,798

	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

On July 18, 2017, the Company’s Board of Directors announced a cash dividend of $0.21 per share of the Company’s common stock, payable September 22, 2017, to stockholders of record as of September 1, 2017. The Company expects to continue paying quarterly dividends in the future, subject to declaration by the Company’s Board of Directors.

Use of Estimates. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Significant items subject to such estimates and assumptions include accounting for revenue recognition and estimating the allowance for contract losses and doubtful accounts. Actual results could differ from those estimates.

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Recent Accounting Pronouncements Not Yet Effective. On May 28, 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in U.S. generally accepted accounting principles (“GAAP”) when it becomes effective. The new standard is effective for the Company on the first day of fiscal 2018 (December 30, 2017). The two permitted transition methods under the new standard are the full retrospective method, in which case the standard would be applied to each prior reporting period presented, or the modified retrospective method, in which case the cumulative effect of applying the standard would be recognized at the date of initial application.

The impact of adopting the new standard is not expected to be material because the analysis of the Company’s contracts under the new revenue recognition standard supports the recognition of revenue over time, which is consistent with the Company’s current revenue recognition model.

Substantially all of the Company’s engagements are performed under time and material or fixed-price arrangements. For time and materials contracts the Company anticipates utilizing the practical expedient under the ASU which states, if an entity has a right to consideration from a customer in an amount that corresponds directly with the value of the entity’s performance completed to date (for example, a service contract in which an entity bills a fixed amount for each hour or service provided), the entity may recognize revenue in the amount to which the entity has a right to invoice. Application of the practical expedient to time and material contracts is consistent with the Company’s current revenue recognition policy.

For fixed price contracts the Company will recognize revenue over time under the ASU because of the continuous transfer of control to the customer. The customer typically controls the work in process as evidenced either by contractual termination clauses or by the Company’s rights to payment for work performed to date to deliver services that do not have an alternative use to the Company. Input methods are an acceptable method of measuring progress towards completing under the ASU. This is consistent with the Company’s current policy of measuring progress towards completion based on the relationship of incurred labor hours at standard rates to its estimate of the total labor hours at standard rates it expects to incur over the term of the contract. The Company believes this methodology achieves a reliable measure of the revenue from the consulting services it provides to its customers under fixed price contracts.

The Company anticipates adopting the standard using the modified retrospective method. The Company is currently evaluating the required disclosures under the new standard and developing appropriate changes to its process, systems and controls.

On February 25, 2016, the FASB issued ASU No. 2016-02, Leases, which requires lessees to recognize most leases on their balance sheet.  The new standard will be effective for the Company on the first day of fiscal 2019 (December 29, 2018).  Early adoption is permitted.  The standard requires use of the modified retrospective transition method, with elective relief, which requires application of the guidance for all periods presented.  The Company is evaluating the effect that ASU No. 2016-02 will have on its consolidated financial statements and related disclosures.  The Company has not yet selected a transition method nor has it determined the effect of the standard on its ongoing financial reporting. The standard will require the Company to record a right of use asset and a lease liability that will materially gross up its balance sheet.   

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Note 2: Fair Value Measurements

The Company measures certain financial assets and liabilities at fair value on a recurring basis, including available-for-sale fixed income 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 six months ended June 30, 2017 and July 1, 2016. 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 June 30, 2017:

	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)	$	9,259	$	9,259	$	-	$	-
Fixed income available- for-sale securities (2)		71,763		-		71,763		-
Fixed income trading securities held in deferred compensation plan (3)		14,033		14,033		-		-
Equity trading securities held in deferred compensation plan (3)		34,637		34,637		-		-
Total	$	129,692	$	57,929	$	71,763	$	-
Liabilities
Deferred compensation plan (4)		54,082		54,082		-		-
Total	$	54,082	$	54,082	$	-	$	-

⁽¹⁾ Included in cash and cash equivalents on the Company’s unaudited condensed consolidated balance sheet.

⁽²⁾ Included in short-term investments on the Company’s unaudited condensed consolidated balance sheet.

⁽³⁾ Included in prepaid expenses and other assets and deferred compensation plan assets on the Company’s unaudited condensed consolidated balance sheet.

⁽⁴⁾ Included in accrued payroll and employee benefits and deferred compensation on the Company’s unaudited condensed consolidated balance sheet.

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

	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)	$	21,918	$	21,918	$	-	$	-
Fixed income available- for-sale securities (2)		58,755		-		58,755		-
Fixed income trading securities held in deferred compensation plan (3)		11,872		11,872		-		-
Equity trading securities held in deferred compensation plan (3)		36,395		36,395		-		-
Total	$	128,940	$	70,185	$	58,755	$	-
Liabilities
Deferred compensation plan (4)		53,617		53,617		-		-
Total	$	53,617	$	53,617	$	-	$	-

⁽¹⁾ Included in cash and cash equivalents on the Company’s unaudited condensed consolidated balance sheet.

⁽²⁾ Included in short-term investments on the Company’s unaudited condensed consolidated balance sheet.

⁽³⁾ Included in prepaid expenses and other assets and deferred compensation plan assets on the Company’s unaudited condensed consolidated balance sheet.

⁽⁴⁾ Included in accrued payroll and employee benefits and deferred compensation on the Company’s unaudited condensed consolidated balance sheet.

Fixed income available-for-sale securities as of June 30, 2017 and December 30, 2016 represent obligations of United States agencies. 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.

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Cash, cash equivalents and short-term investments consisted of the following as of June 30, 2017:

	Amortized		Unrealized		Unrealized			Estimated
(In thousands)	Cost		Gains		Losses			Fair Value
Classified as current assets:
Cash	$	80,974	$	-	$	-		$	80,974
Cash equivalents:
Money market securities		9,259		-		-			9,259
Total cash equivalents		9,259		-		-			9,259
Total cash and cash equivalents		90,233		-		-			90,233
Short-term investments:
U.S. agency securities		72,000		-		(237	)		71,763
Total short-term investments		72,000		-		(237	)		71,763
Total cash, cash equivalents and short-term investments	$	162,233	$	-	$	(237	)	$	161,996

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

	Amortized		Unrealized		Unrealized			Estimated
(In thousands)	Cost		Gains		Losses			Fair Value
Classified as current assets:
Cash	$	93,049	$	-	$	-		$	93,049
Cash equivalents:
Money market securities		21,918		-		-			21,918
Total cash equivalents		21,918		-		-			21,918
Total cash and cash equivalents		114,967		-		-			114,967
Short-term investments:
U.S. agency securities		59,000		-		(245	)		58,755
Total short-term investments		59,000		-		(245	)		58,755
Total cash, cash equivalents and short-term investments	$	173,967	$	-	$	(245	)	$	173,722

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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 June 30, 2017:

	Amortized		Estimated
(In thousands)	Cost		Fair Value
Due within one year	$	32,000	$	31,936
Due between one and two years		40,000		39,827
Total	$	72,000	$	71,763

At June 30, 2017 and December 30, 2016, 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 consolidated balance sheet at June 30, 2017 and December 30, 2016, but require disclosure of their fair values: accounts receivable, other assets and accounts payable. The estimated fair value of such instruments at June 30, 2017 and December 30, 2016 approximates their carrying value as reported on the consolidated balance sheet.

There were no other-than-temporary impairments or credit losses related to available-for-sale securities during the three and six months ended June 30, 2017 and July 1, 2016.

Note 3: Net Income Per Share

Basic per share amounts are computed using the weighted-average number of common shares outstanding during the period. Diluted per share amounts are calculated using the weighted-average number of common shares outstanding during the period and, when dilutive, the weighted-average number of potential common shares from the issuance of common stock to satisfy outstanding restricted stock units and the exercise of outstanding options to purchase common stock using the treasury stock method.

The following schedule reconciles the shares used to calculate basic and diluted net income per share:

	Three Months Ended				Six Months Ended
(In thousands)	June 30, 2017		July 1, 2016		June 30, 2017		July 1, 2016
Shares used in basic per share computation		26,415		26,631		26,358		26,572
Effect of dilutive common stock options outstanding		135		127		133		124
Effect of dilutive restricted stock units outstanding		418		506		489		560
Shares used in diluted per share computation		26,968		27,264		26,980		27,256

There were no options excluded from the diluted per share calculations for the three and six months ended June 30, 2017 and July 1, 2016.

Note 4: Stock-Based Compensation

Restricted Stock Units

Restricted stock unit grants are designed to attract and retain employees, and to better align employee interests with those of the Company’s stockholders. For a select group of employees, up to 40% of their annual bonus is settled with fully vested restricted stock unit awards. Under these fully vested restricted stock unit awards, the holder of each award has the right to receive one share of the Company’s common stock for each fully vested restricted stock unit four years from the date of grant. Each individual who receives a fully vested restricted stock unit award is also granted a matching number of unvested restricted stock unit awards. Unvested restricted stock unit awards are also granted for select new hires and promotions. These unvested restricted stock unit awards generally cliff vest four years from the date of grant, at which time the holder of each award will have the right to receive one share of the Company’s common stock for each restricted stock unit award provided the holder of each award has met certain employment conditions. In the case of retirement at 59½ years or older, all unvested restricted stock unit awards will continue to vest, provided that the holder of each award does all consulting work through the Company and does not become an employee for a past or present client, beneficial party or competitor of the Company.

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The value of these restricted stock unit awards is determined based on the market price of the Company’s common stock on the date of grant. The value of fully vested restricted stock unit awards issued is recorded as a reduction to accrued bonuses. The portion of bonus expense that the Company expects to settle with fully vested restricted stock unit awards is recorded as stock-based compensation during the period the bonus is earned. The Company recorded stock-based compensation expense associated with accrued bonus awards of $2,201,000 and $1,451,000 during the three months ended June 30, 2017 and July 1, 2016, respectively. For the six months ended June 30, 2017 and July 1, 2016, the Company recorded stock-based compensation expense associated with accrued bonus awards of $4,129,000 and $3,168,000, respectively. The value of the unvested restricted stock unit awards granted is recognized on a straight-line basis over the shorter of the four-year vesting period or the period between the grant date and the date the award recipient turns 59½. If the award recipient is 59½ years or older on the date of grant, the value of the entire award is expensed upon grant. The Company recorded stock-based compensation expense associated with the unvested restricted stock unit awards of $1,238,000 and $1,206,000 during the three months ended June 30, 2017 and July 1, 2016, respectively. The Company recorded stock-based compensation expense associated with the unvested restricted stock unit awards of $4,494,000 and $4,332,000 during the six months ended June 30, 2017 and July 1, 2016, respectively.

Stock Options

Stock options are granted for terms of ten years and generally vest 25% per year over a four-year period from the grant date. Unvested stock option awards will continue to vest in the case of retirement at 59½ years or older, provided that the holder of each award does all consulting work through the Company and does not become an employee for a past or present client, beneficial party or competitor of the Company. The Company grants options at exercise prices equal to the fair value of the Company’s common stock on the date of grant. The Company recorded stock-based compensation expense associated with stock option grants of $93,000 and $52,000 during the three months ended June 30, 2017 and July 1, 2016, respectively. The Company recorded stock-based compensation expense associated with stock option grants of $564,000 and $429,000 during the six months ended June 30, 2017 and July 1, 2016, respectively.

The Company uses the Black-Scholes option-pricing model to determine the fair value of options granted. The determination of the fair value of stock option awards on the date of grant using an option-pricing model is affected by the Company’s stock price as well as assumptions regarding a number of complex and subjective variables. These variables include expected stock price volatility over the term of the award, actual and projected employee stock option exercise behaviors, the risk-free interest rate and expected dividends.

The Company used historical exercise and post-vesting forfeiture and expiration data to estimate the expected term of options granted. The historical volatility of the Company’s common stock over a period of time equal to the expected term of the options granted was used to estimate expected volatility. The risk-free interest rate used in the option-pricing model was based on United States Treasury zero-coupon issues with remaining terms similar to the expected term of the options. The dividend yield assumption considers the expectation of continued declaration of dividends, offset by option holders’ dividend equivalent rights.

The Company accounts for forfeitures of stock-based awards when they occur. All stock-based payment awards are recognized on a straight-line basis over the requisite service periods of the awards.

Note 5: Treasury Stock

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.

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The Company repurchased 117,582 shares of its common stock for $7,004,000 during the six months ended June 30, 2017.  The Company repurchased 90,505 shares of its common stock for $4,458,000 during the six months ended July 1, 2016. As of June 30, 2017 the Company had remaining authorization under its stock repurchase plans of $50,303,000 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 six months ended June 30, 2017 and July 1, 2016, respectively

Note 6: Deferred Compensation Plans

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% 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 June 30, 2017 and December 30, 2016, the invested amounts under the plans totaled $48,670,000 and $48,267,000, respectively. These assets are classified as trading securities and are recorded at fair value with changes recorded as adjustments to miscellaneous income, net.

As of June 30, 2017 and December 30, 2016, vested amounts due under the plans totaled $54,082,000 and $53,617,000, respectively. Changes in the liability are recorded as adjustments to compensation expense. During the three months ended June 30, 2017 and July 1, 2016, the Company recognized compensation expense of $1,020,000 and $938,000, 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. During the six months ended June 30, 2017 and July 1, 2016, the Company recognized compensation expense of $2,917,000 and $1,366,000, 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.

Note 7: Supplemental Cash Flow Information

The following is supplemental disclosure of cash flow information:

	Six Months Ended
(In thousands)	June 30, 2017		July 1, 2016
Cash paid during period:
Income taxes	$	8,522	$	11,808
Non-cash investing and financing activities:
Unrealized gain on short-term investments	$	4	$	84
Vested stock unit awards issued to settle accrued bonuses	$	6,910	$	6,334
Accrual for capital expenditures	$	135	$	422

Note 8: Accounts Receivable, Net

At June 30, 2017 and December 30, 2016, accounts receivable, net, was comprised of the following:

	June 30,			December 30,
(In thousands)	2017			2016
Billed accounts receivable	$	72,915		$	60,510
Unbilled accounts receivable		37,862			30,316
Allowance for contract losses and doubtful accounts		(3,333	)		(3,417	)
Total accounts receivable, net	$	107,444		$	87,409

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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 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.

Segment information for the three and six months ended June 30, 2017 and July 1, 2016 follows:

Revenues
	Three Months Ended				Six Months Ended
(In thousands)	June 30, 2017		July 1, 2016		June 30, 2017		July 1, 2016
Engineering and Other Scientific	$	69,795	$	60,979	$	136,478	$	125,789
Environmental and Health		18,045		16,316		35,484		34,662
Total revenues	$	87,840	$	77,295	$	171,962	$	160,451

Operating Income
	Three Months Ended						Six Months Ended
(In thousands)	June 30, 2017			July 1, 2016			June 30, 2017			July 1, 2016
Engineering and Other Scientific	$	24,313		$	19,561		$	46,634		$	40,699
Environmental and Health		5,824			4,028			11,303			9,223
Total segment operating income		30,137			23,589			57,937			49,922
Corporate operating expense		(9,820	)		(8,658	)		(22,986	)		(18,555	)
Total operating income	$	20,317		$	14,931		$	34,951		$	31,367

Capital Expenditures
	Three Months Ended				Six Months Ended
(In thousands)	June 30, 2017		July 1, 2016		June 30, 2017		July 1, 2016
Engineering and Other Scientific	$	794	$	1,273	$	1,802	$	2,463
Environmental and Health		64		38		106		61
Total segment capital expenditures		858		1,311		1,908		2,524
Corporate capital expenditures		361		590		618		858
Total capital expenditures	$	1,219	$	1,901	$	2,526	$	3,382

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Depreciation and Amortization
	Three Months Ended				Six Months Ended
(In thousands)	June 30, 2017		July 1, 2016		June 30, 2017		July 1, 2016
Engineering and Other Scientific	$	1,163	$	1,116	$	2,278	$	2,137
Environmental and Health		44		45		85		88
Total segment depreciation and amortization		1,207		1,161		2,363		2,225
Corporate depreciation and amortization		422		363		832		702
Total depreciation and amortization	$	1,629	$	1,524	$	3,195	$	2,927

One customer comprised 12% of the Company’s revenues during the three and six months ended June 30, 2017. No other single customer comprised more than 10% of the Company’s revenues during the three months and six months ended June 30, 2017. No single customer comprised more than 10% of the Company’s revenues during the three and six months ended July 1, 2016. One customer comprised 12% of the Company’s accounts receivable at June 30, 2017. No single customer comprised more than 10% of the Company’s accounts receivable at December 30, 2016.

Note 10: 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.

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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, which are contained in our fiscal 2016 Annual Report on Form 10-K, which was filed with the U.S. Securities and Exchange Commission on February 24, 2017 (our “2016 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 management, as well as assumptions made by and information currently available to the Company’s 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 or its management, identify such forward-looking statements. Such statements reflect the current views of the Company or its 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 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 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 Report under the heading “Risk Factors” and elsewhere in the report. The inclusion of such forward-looking information should not be regarded as a representation by the Company or any other person that the future events, plans, or expectations 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 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 have a 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 to our critical accounting policies have not differed materially from actual results. Policies covering revenue recognition and estimating the allowance for contract losses and doubtful accounts are described in our 2016 Annual Report under “Critical Accounting Estimates” and Note 1 (Summary of Significant Accounting Policies) of the Notes to Consolidated Financial Statements.

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RESULTS OF CONSOLIDATED OPERATIONS

Executive Summary

Revenues for the second quarter of 2017 increased 14% to $87,840,000 as compared to $77,295,000 during the same period last year. Revenues before reimbursements for the second quarter of 2017 increased 15% to $84,120,000 as compared to $73,334,000 during the same period last year. We experienced good 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 medical devices, and our reactive services in international construction disputes, consumer product recalls and product liability claims. Our comparative growth rates for the quarter were aided by the unusually soft results in the year ago period.

During the second quarter of 2017 we had strong growth in our biomedical engineering, construction consulting, electrical engineering & computer science, human factors and polymer science & materials chemistry practices. During the quarter we performed a large project for a client in the consumer products industry that contributed to the strength of our human factors practice. This project represented approximately 5% of our net revenues in the second quarter of 2017. During the quarter we also continued to expand our international construction disputes work with current mining, gas terminal and power plant projects. We also saw increased demand from the medical device industry for our multi-disciplinary team of material scientists and mechanical engineers to support product development and litigation matters.

Net income increased 32% to $13,791,000 during the second quarter of 2017 as compared to $10,453,000 during the same period last year. Diluted earnings per share increased to $0.51 per share as compared to $0.38 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 project 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 June 30, 2017

During the second quarter of 2017, billable hours increased 14% to 310,000 as compared to 273,000 during the same period last year. Our utilization increased to 77% during the second quarter of 2017 as compared to 69% during the same period last year. Technical full-time equivalent employees increased to 774 during the second quarter of 2017 as compared to 765 during the same period last year. We continue to selectively hire key talent to expand our capabilities.

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Three Months Ended June 30, 2017 compared to Three Months Ended July 1, 2016

Revenues
	Three Months Ended
(in thousands, except percentages)	June 30, 2017			July 1, 2016			Percent Change
Engineering and Other Scientific	$	69,795		$	60,979			14.5	%
Percentage of total revenues		79.5	%		78.9	%
Environmental and Health		18,045			16,316			10.6	%
Percentage of total revenues		20.5	%		21.1	%
Total revenues	$	87,840		$	77,295			13.6	%

The increase in revenues for our Engineering and Other Scientific segment was due to an increase in billable hours. During the second quarter of 2017, billable hours for this segment increased by 15% to 241,000 as compared to 209,000 during the same period last year. Utilization for this segment increased to 80% during the second quarter of 2017 as compared to 72% during the same period last year. The increase in billable hours and utilization was due to strong growth from our proactive design and regulatory consulting services, specifically related to ongoing projects with clients in the consumer products industry. During the quarter we performed a large project for a client in the consumer products industry that represented approximately 5% of our net revenues. Demand from the medical device industry continued to grow during the quarter as clients called upon our multi-disciplinary teams for support in product development and litigation matters. We continued to expand our broad base on international construction dispute work with ongoing mining, gas terminal and power plant projects leveraging our integrated team of experts to deliver solutions to complex capital projects. Additionally, after several quarters of flat revenues from the automotive industry, revenues grew during the second quarter as we were called upon to evaluate safety and performance issues for new transportation technologies. Technical full-time equivalent employees in this segment increased 4% to 581 during the second quarter of 2017 as compared to 560 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 and an increase in billing rates. During the second quarter of 2017, billable hours for this segment increased by 8% to 69,000 as compared to 64,000 during the same period last year. Utilization in this segment increased to 69% during the second quarter of 2017 as compared to 60% during the same period last year. The increase in billable hours and utilization was due to growth in our chemical regulation and food safety practice where we continued to assist clients with global regulatory issues. Revenues from the oil and gas and industrial chemical industries remained flat as clients continued to adjust to the price of oil. Technical full-time equivalent employees in this segment decreased by 6% to 193 during the second quarter of 2017 as compared to 205 during the same period last year. The increase in utilization and the decrease in technical full-time equivalent employees was due to our efforts to align resources with anticipated demand.

Compensation and Related Expenses
	Three Months Ended
(in thousands, except percentages)	June 30, 2017			July 1, 2016			Percent Change
Compensation and related expenses	$	51,536		$	47,040			9.6	%
Percentage of total revenues		58.7	%		60.9	%

The increase in compensation and related expenses during the second quarter of 2017 was due to an increase in bonus expense, an increase in payroll expense, and an increase in fringe benefits. Bonus expense increased by $2,898,000 during the second quarter of 2017 due to a corresponding increase to income before income taxes, before bonus expense, and before stock-based compensation. Payroll expense increased $1,132,000 and fringe benefits increased $255,000 due to the increase in technical full-time equivalent employees and our annual salary increases. 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.

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Other Operating Expenses
	Three Months Ended
(in thousands, except percentages)	June 30, 2017			July 1, 2016			Percent Change
Other operating expenses	$	7,275		$	7,218			0.8	%
Percentage of total revenues		8.3	%		9.3	%

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 second quarter of 2017 was primarily due to an increase in depreciation expense of $106,000 associated with investments in our corporate infrastructure. We expect other operating expenses to grow as we selectively add new talent and make investments in our corporate infrastructure.

Reimbursable Expenses
	Three Months Ended
(in thousands, except percentages)	June 30, 2017			July 1, 2016			Percent Change
Reimbursable expenses	$	3,720		$	3,961			(6.1	)%
Percentage of total revenues		4.2	%		5.1	%

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

General and Administrative Expenses
	Three Months Ended
(in thousands, except percentages)	June 30, 2017			July 1, 2016			Percent Change
General and administrative expenses	$	4,992		$	4,145			20.4	%
Percentage of total revenues		5.7	%		5.4	%

The increase in general and administrative expenses during the second quarter of 2017 was primarily due to an increase in travel and meals of $528,000 and an increase in legal expenses of $110,000. The increase in travel and meals was due to a firm-wide managers’ meeting.

Other Income, Net
	Three Months Ended
(in thousands, except percentages)	June 30, 2017			July 1, 2016			Percent Change
Other income, net	$	2,031		$	1,746			16.3	%
Percentage of total revenues		2.3	%		2.3	%

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. The increase in other income, net, was primarily due to an increase in interest income of $94,000 and a change in the value of assets associated with our deferred compensation plan. During the second quarter of 2017, other income, net, increased $82,000 with a corresponding increase 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 consisted of an increase in the value of the plan assets of $1,020,000 during the second quarter of 2017 as compared to an increase in the value of the plan assets of $938,000 during the same period last year.

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Income Taxes
	Three Months Ended
(in thousands, except percentages)	June 30, 2017			July 1, 2016			Percent Change
Income taxes	$	8,557		$	6,224			37.5	%
Percentage of total revenues		9.7	%		8.1	%
Effective tax rate		38.3	%		37.3	%

The increase in income tax expense was due to a corresponding increase in pre-tax income. The increase in our effective tax rate was due to a decrease in the excess tax benefit associated with share-based awards. The excess tax benefit associated with share-based awards was $35,000 during the second quarter of 2017 as compared to $327,000 during the same period last year.

Six Months Ended June 30, 2017 compared to Six Months Ended July 1, 2016

Revenues
	Six Months Ended
(in thousands, except percentages)	June 30, 2017			July 1, 2016			Percent Change
Engineering and Other Scientific	$	136,478		$	125,789			8.5	%
Percentage of total revenues		79.4	%		78.4	%
Environmental and Health		35,484			34,662			2.4	%
Percentage of total revenues		20.6	%		21.6	%
Total revenues	$	171,962		$	160,451			7.2	%

The increase in revenues for our Engineering and Other Scientific segment was due to an increase in billable hours. During the first six months of 2017, billable hours for this segment increased by 8% to 467,000 as compared to 434,000 during the same period last year. Utilization for this segment increased to 78% during the first six months of 2017 as compared to 74% during the same period last year. The increase in billable hours and utilization was due to strong growth from our proactive design and regulatory consulting services, specifically related to ongoing projects with clients in the consumer products industry. During the first six months of 2017 we performed a large project for a client in the consumer products industry that represented approximately 5% of our net revenues. Demand from the medical device industry continued to grow as clients called upon our multi-disciplinary teams for support in product development and litigation matters. We continued to expand our broad base on international construction dispute work with ongoing mining, gas terminal and power plant projects leveraging our integrated team of experts to deliver solutions to complex capital projects. Technical full-time equivalent employees in this segment increased 3% to 579 during the first six months of 2017 as compared to 560 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. During the first six months of 2017, billable hours for this segment increased by 3% to 139,000 as compared to 135,000 during the same period last year. Utilization in this segment increased to 70% during the first six months of 2017 as compared to 63% during the same period last year. The increase in billable hours and utilization was due to growth in our chemical regulation and food safety practice where we continued to assist clients with global regulatory issues. Revenues from the oil and gas and industrial chemical industries remained flat as clients continued to adjust to the price of oil. Technical full-time equivalent employees in this segment decreased by 8% to 191 during the first six months of 2017 as compared to 207 during the same period last year. The increase in utilization and the decrease in technical full-time equivalent employees was due to our efforts to align resources with anticipated demand.

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Compensation and Related Expenses
	Six Months Ended
(in thousands, except percentages)	June 30, 2017			July 1, 2016			Percent Change
Compensation and related expenses	$	105,954		$	99,057			7.0	%
Percentage of total revenues		61.6	%		61.7	%

The increase in compensation and related expenses during the first six months of 2017 was due to an increase in bonus expense, an increase in payroll expense and fringe benefits, and a change in the value of assets associated with our deferred compensation plan. Bonus expense increased by $3,075,000 during the first six months of 2017 due to a corresponding increase to income before income taxes, before bonus expense, and before stock-based compensation. Payroll expense increased $1,599,000 and fringe benefits increased $305,000 due to the increase in technical full-time equivalent employees and our annual salary increases. During the first six months of 2017, deferred compensation expense increased $1,552,000 with a corresponding increase to other income, net, as compared to the same period last year due to a change in value of assets associated with our deferred compensation plan. This increase consisted of an increase in the value of plan assets of $2,917,000 during the first six months of 2017 as compared to an increase in the value of plan assets of $1,365,000 during the same period last year.

Other Operating Expenses
	Six Months Ended
(in thousands, except percentages)	June 30, 2017			July 1, 2016			Percent Change
Other operating expenses	$	14,466		$	14,201			1.9	%
Percentage of total revenues		8.4	%		8.9	%

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 first six months of 2017 was primarily due to an increase in depreciation expense of $269,000 associated with investments in our corporate infrastructure.

Reimbursable Expenses
	Six Months Ended
(in thousands, except percentages)	June 30, 2017			July 1, 2016			Percent Change
Reimbursable expenses	$	7,375		$	8,167			(9.7	)%
Percentage of total revenues		4.3	%		5.1	%

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

General and Administrative Expenses
	Six Months Ended
(in thousands, except percentages)	June 30, 2017			July 1, 2016			Percent Change
General and administrative expenses	$	9,216		$	7,659			20.3	%
Percentage of total revenues		5.4	%		4.8	%

The increase in general and administrative expenses during the first six months of 2017 was primarily due to an increase in travel and meals of $920,000, an increase in marketing and promotion of $164,000, and an increase in legal expenses of $159,000. The increase in travel and meals was due to a firm-wide managers’ meeting. The increase in marketing and promotion was due to several initiatives associated with the firm’s 50^th anniversary.

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Other Income, Net
	Six Months Ended
(in thousands, except percentages)	June 30, 2017			July 1, 2016			Percent Change
Other income, net	$	4,807		$	3,044			57.9	%
Percentage of total revenues		2.8	%		1.9	%

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. During the first six months of 2017, other income, net, increased $1,552,000 with a corresponding increase 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 consisted of an increase in the value of the plan assets of $2,917,000 during the first six months of 2017 as compared to an increase in the value of the plan assets of $1,365,000 during the same period last year. The increase in other income, net, was also due to an increase in interest income of $190,000.

Income Taxes
	Six Months Ended
(in thousands, except percentages)	June 30, 2017			July 1, 2016			Percent Change
Income taxes	$	9,391		$	8,608			9.1	%
Percentage of total revenues		5.5	%		5.4	%
Effective tax rate		23.6	%		25.0	%

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. The excess tax benefit associated with share-based awards was $6,054,000 during the first six months of 2017 as compared to $4,788,000 during the same period last year.

LIQUIDITY AND CAPITAL RESOURCES

	Six Months Ended
(in thousands)	June 30, 2017			July 1, 2016
Net cash provided by operating activities	$	17,191		$	14,545
Net cash used in investing activities		(15,526	)		(5,932	)
Net cash used in financing activities		(26,881	)		(20,357	)

We financed our business during the first six months of 2017 through available cash. We invest our excess cash in cash equivalents and short-term investments. As of June 30, 2017, our cash, cash equivalents and short-term investments were $162.0 million compared to $173.7 million at December 30, 2016. We believe our existing balances of cash, cash equivalents and short-term investments 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.

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.

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The increase in net cash used in investing activities during the first six months of 2017, as compared to the same period last year, was due to an increase in the purchase of short-term investments, net of maturities.

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

We expect to continue our investing activities, including capital expenditures. Furthermore, cash reserves may be used to repurchase 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 $48,467,000 were recorded as a long-term liability on our unaudited condensed consolidated balance sheet at June 30, 2017. Company 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 June 30, 2017, invested amounts under the plan of $44,590,000 were recorded as a long-term 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.

Non-GAAP Financial Measures

Regulation G, Conditions for Use of Non-Generally Accepted Accounting Principles ("Non-GAAP") Financial Measures, and other 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 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.

- 24 -

The following table shows EBITDA (determined as shown in the reconciliation table below) as a percentage of revenues before reimbursements for the three and six months ended June 30, 2017 and July 1, 2016:

	Three Months Ended						Six Months Ended
(in thousands, except percentages)	June 30, 2017			July 1, 2016			June 30, 2017			July 1, 2016
Revenues before reimbursements	$	84,120		$	73,334		$	164,587		$	152,284
EBITDA	$	23,711		$	18,030		$	42,453		$	37,028
EBITDA as a % of revenues before reimbursements		28.2	%		24.6	%		25.8	%		24.3	%

The increase in EBITDA as a percentage of revenues before reimbursements during the second quarter of 2017 as compared to the same period last year was primarily due to an increase in utilization. Utilization for the second quarter of 2017 was 77% as compared to 69% during the same period last year.

The increase in EBITDA as a percentage of revenues before reimbursements during the first six months of 2017 as compared to the same period last year was primarily due to an increase in utilization. Utilization for the first six months of 2017 was 76% as compared to 71% during the same period last year.

The following table is a reconciliation of EBITDA and EBITDAS to the most comparable GAAP measure, net income, for the three and six months ended June 30, 2017 and July 1, 2016:

	Three Months Ended						Six Months Ended
(in thousands)	June 30, 2017			July 1, 2016			June 30, 2017			July 1, 2016
Net income	$	13,791		$	10,453		$	30,367		$	25,803
Add back (subtract):
Income taxes		8,557			6,224			9,391			8,608
Interest income, net		(266	)		(171	)		(500	)		(310	)
Depreciation and amortization		1,629			1,524			3,195			2,927
EBITDA		23,711			18,030			42,453			37,028
Stock-based compensation		3,532			2,709			9,187			7,929
EBITDAS	$	27,243		$	20,739		$	51,640		$	44,957

Item 3. Quantitative and Qualitative Disclosures About Market Risk

We are exposed to interest rate risk associated with our balances of cash, cash equivalents and short-term investments. 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.

- 25 -

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, and the Chinese Yuan. Accordingly, changes in exchange rates may negatively affect the revenues and net income of our foreign subsidiaries as expressed in U.S. dollars.

At June 30, 2017, we had net assets of approximately $7.6 million with a functional currency of the British Pound, net assets of approximately $2.9 million with a functional currency of the Euro, and net assets of approximately $2.8 million with a functional currency of the Chinese Yuan associated with our operations in the United Kingdom, Germany, and China, 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 June 30, 2017, we had net assets denominated in the non-functional currency of approximately $1.9 million. As such, a ten percent change in the value of the local currency would result in a $190,000 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. 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.

Item 4. 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 June 30, 2017, 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

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

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

Exponent is not engaged in any material legal proceedings.

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 Annual Report.

- 26 -

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 June 30, 2017 (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)
April 1 to April 28		-	$	-		-	$	56,003
April 29 to May 26		-		-		-	$	56,003
May 27 to June 30		95		60.05		95	$	50,303
Total		95	$	60.05		95	$	50,303

⁽¹⁾ 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. These plans have no expiration date.

Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

Not applicable.

Item 6. Exhibits

(a) Exhibit Index

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

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

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

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

101.INS XBRL Instance Document

101.SCH XBRL Taxonomy Schema Document

101.CAL XBRL Taxonomy Calculation Linkbase Document

101.DEF XBRL Taxonomy Definition Linkbase Document

101.LAB XBRL Taxonomy Label Linkbase Document

101.PRE XBRL Taxonomy Presentation Linkbase Document

- 27 -

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)
Date: August 4, 2017
	/s/ Paul R. Johnston
	Paul R. Johnston, Ph.D., Chief Executive Officer
	/s/ Richard L. Schlenker
	Richard L. Schlenker, Chief Financial Officer

- 28 -

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Paul R. Johnston, Ph.D., certify that:

1. I have reviewed this quarterly report on Form 10-Q of Exponent, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 4, 2017

/s/ Paul R. Johnston

Paul R. Johnston, Ph.D.

Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Richard L. Schlenker, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Exponent, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 4, 2017

/s/ Richard L. Schlenker

Richard L. Schlenker

Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Exponent, Inc. (the "Company") on Form 10-Q for the fiscal period ending June 30, 2017 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Paul R. Johnston, Ph.D., Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

August 4, 2017

/s/ Paul R. Johnston

Paul R. Johnston, Ph.D.

Chief Executive Officer

The foregoing certification is being furnished solely pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, and will not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or otherwise subject to the liability of that section. Such certification will not be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent that the Company specifically incorporates it by reference.

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Exponent, Inc. (the "Company") on Form 10-Q for the fiscal period ending June 30, 2017 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Richard L. Schlenker, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

August 4, 2017

/s/ Richard L. Schlenker

Richard L. Schlenker

Chief Financial Officer

The foregoing certification is being furnished solely pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, and will not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or otherwise subject to the liability of that section. Such certification will not be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent that the Company specifically incorporates it by reference.

XML

Document And Entity Information - shares	6 Months Ended
	Jun. 30, 2017	Jul. 28, 2017
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2017
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	Q2
Entity Registrant Name	EXPONENT INC
Entity Central Index Key	0000851520
Current Fiscal Year End Date	--12-29
Entity Filer Category	Large Accelerated Filer
Trading Symbol	EXPO
Entity Common Stock, Shares Outstanding		25,793,398

XML

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 30, 2016
Current assets:
Cash and cash equivalents	$ 90,233	$ 114,967
Short-term investments	71,763	58,755
Accounts receivable, net of allowance for contract losses and doubtful accounts of $3,333 and $3,417 at June 30, 2017 and December 30, 2016, respectively	107,444	87,409
Prepaid expenses and other assets	9,283	12,913
Total current assets	278,723	274,044
Property, equipment and leasehold improvements, net	35,892	36,710
Goodwill	8,607	8,607
Deferred income taxes	40,945	42,166
Deferred compensation plan assets	44,590	41,153
Other assets	918	1,064
Total assets	409,675	403,744
Current liabilities:
Accounts payable and accrued liabilities	10,610	10,073
Accrued payroll and employee benefits	50,904	62,539
Deferred revenues	6,602	7,624
Total current liabilities	68,116	80,236
Other liabilities	2,244	2,005
Deferred compensation	48,467	46,503
Deferred rent	1,449	1,654
Total liabilities	120,276	130,398
Stockholders’ equity:
Common stock, $0.001 par value; 80,000 shares authorized; 32,853 shares issued at June 30, 2017 and December 30, 2016	33	33
Additional paid-in capital	206,752	194,632
Accumulated other comprehensive income (loss)
Investment securities, available-for-sale	(142)	(146)
Foreign currency translation adjustments	(2,390)	(2,980)
Accumulated other comprehensive income (loss)	(2,532)	(3,126)
Retained earnings	304,224	291,243
Treasury stock, at cost; 7,060 and 7,256 shares held at June 30, 2017 and December 30, 2016, respectively	(219,078)	(209,436)
Total stockholders’ equity	289,399	273,346
Total liabilities and stockholders’ equity	$ 409,675	$ 403,744

XML

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) shares in Thousands, $ in Thousands	Jun. 30, 2017	Dec. 30, 2016
Accounts receivable, net of allowance for contract losses and doubtful accounts	$ 3,333	$ 3,417
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	80,000	80,000
Common stock, shares issued	32,853	32,853
Treasury stock, shares	7,060	7,256

XML

Condensed Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jul. 01, 2016	Jun. 30, 2017	Jul. 01, 2016
Revenues:
Revenues before reimbursements	$ 84,120	$ 73,334	$ 164,587	$ 152,284
Reimbursements	3,720	3,961	7,375	8,167
Revenues	87,840	77,295	171,962	160,451
Operating expenses:
Compensation and related expenses	51,536	47,040	105,954	99,057
Other operating expenses	7,275	7,218	14,466	14,201
Reimbursable expenses	3,720	3,961	7,375	8,167
General and administrative expenses	4,992	4,145	9,216	7,659
Total operating expenses	67,523	62,364	137,011	129,084
Operating income	20,317	14,931	34,951	31,367
Other income, net:
Interest income, net	266	171	500	310
Miscellaneous income, net	1,765	1,575	4,307	2,734
Total other income, net	2,031	1,746	4,807	3,044
Income before income taxes	22,348	16,677	39,758	34,411
Income taxes	8,557	6,224	9,391	8,608
Net income	$ 13,791	$ 10,453	$ 30,367	$ 25,803
Net income per share:
Basic	$ 0.52	$ 0.39	$ 1.15	$ 0.97
Diluted	$ 0.51	$ 0.38	$ 1.13	$ 0.95
Shares used in per share computations:
Basic	26,415	26,631	26,358	26,572
Diluted	26,968	27,264	26,980	27,256
Cash dividends declared per common share	$ 0.21	$ 0.18	$ 0.42	$ 0.36

XML

Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jul. 01, 2016	Jun. 30, 2017	Jul. 01, 2016
Net income	$ 13,791	$ 10,453	$ 30,367	$ 25,803
Other comprehensive income (loss):
Foreign currency translation adjustments, net of tax	454	(505)	590	(510)
Unrealized (losses) gains on available-for- sale investment securities arising during the period, net of tax	(32)	(1)	4	84
Comprehensive income	$ 14,213	$ 9,947	$ 30,961	$ 25,377

XML

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2017	Jul. 01, 2016
Cash flows from operating activities:
Net income	$ 30,367	$ 25,803
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization of property, equipment and leasehold improvements	3,195	2,927
Amortization of premiums and accretion of discounts on short-term investments	0	14
Deferred rent	(205)	(184)
Provision for contract losses and doubtful accounts	805	1,131
Stock-based compensation	9,187	7,929
Deferred income tax provision	1,217	424
Changes in operating assets and liabilities:
Accounts receivable	(20,840)	(4,863)
Prepaid expenses and other assets	3,365	(5,198)
Accounts payable and accrued liabilities	928	(1,716)
Accrued payroll and employee benefits	(9,806)	(9,712)
Deferred revenues	(1,022)	(2,010)
Net cash provided by operating activities	17,191	14,545
Cash flows from investing activities:
Capital expenditures	(2,526)	(3,382)
Purchase of short-term investments	(13,000)	(24,000)
Maturity of short-term investments	0	21,450
Net cash used in investing activities	(15,526)	(5,932)
Cash flows from financing activities:
Payroll taxes for restricted stock units	(9,520)	(7,613)
Repurchase of common stock	(7,004)	(4,458)
Exercise of share-based payment awards	638	1,229
Dividends and dividend equivalents rights	(10,995)	(9,515)
Net cash used in financing activities	(26,881)	(20,357)
Effect of foreign currency exchange rates on cash and cash equivalents	482	(464)
Net decrease in cash and cash equivalents	(24,734)	(12,208)
Cash and cash equivalents at beginning of period	114,967	125,751
Cash and cash equivalents at end of period	$ 90,233	$ 113,543

XML

Basis of Presentation

6 Months Ended

Jun. 30, 2017

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation

Note 1: Basis of Presentation

Exponent, Inc. (referred to as the “Company” or “Exponent”) is an engineering and scientific consulting firm that provides solutions to complex problems. The Company operates on a 52-53 week fiscal year ending on the Friday closest to the last day of December.

The accompanying unaudited condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information, the instructions to Form 10-Q and Article 10 of Regulation S-X promulgated by the Securities and Exchange Commission. Accordingly, they do not contain all the information and notes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, all adjustments which are necessary for the fair presentation of the condensed consolidated financial statements have been included and all such adjustments are of a normal and recurring nature. The operating results for the three and six months ended June 30, 2017 are not necessarily representative of the results of future quarterly or annual periods. The following information should be read in conjunction with the audited consolidated financial statements and accompanying notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 30, 2016, which was filed with the U.S. Securities and Exchange Commission on February 24, 2017.

The unaudited condensed consolidated financial statements include the accounts of Exponent, Inc. and its subsidiaries, which are all wholly owned. All intercompany accounts and transactions have been eliminated in consolidation.

Dividend. The Company declared and paid cash dividends per common share during the periods presented as follows:

	Fiscal Year 2017
	Dividends		Amount
	Per Share		(in thousands)
First Quarter	$	0.21	$	5,374
Second Quarter		0.21		5,424
Total	$	0.42	$	10,798

	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

On July 18, 2017, the Company’s Board of Directors announced a cash dividend of $0.21 per share of the Company’s common stock, payable September 22, 2017, to stockholders of record as of September 1, 2017. The Company expects to continue paying quarterly dividends in the future, subject to declaration by the Company’s Board of Directors.

Use of Estimates. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Significant items subject to such estimates and assumptions include accounting for revenue recognition and estimating the allowance for contract losses and doubtful accounts. Actual results could differ from those estimates.

Recent Accounting Pronouncements Not Yet Effective. On May 28, 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in U.S. generally accepted accounting principles (“GAAP”) when it becomes effective. The new standard is effective for the Company on the first day of fiscal 2018 (December 30, 2017). The two permitted transition methods under the new standard are the full retrospective method, in which case the standard would be applied to each prior reporting period presented, or the modified retrospective method, in which case the cumulative effect of applying the standard would be recognized at the date of initial application.

The impact of adopting the new standard is not expected to be material because the analysis of the Company’s contracts under the new revenue recognition standard supports the recognition of revenue over time, which is consistent with the Company’s current revenue recognition model.

Substantially all of the Company’s engagements are performed under time and material or fixed-price arrangements. For time and materials contracts the Company anticipates utilizing the practical expedient under the ASU which states, if an entity has a right to consideration from a customer in an amount that corresponds directly with the value of the entity’s performance completed to date (for example, a service contract in which an entity bills a fixed amount for each hour or service provided), the entity may recognize revenue in the amount to which the entity has a right to invoice. Application of the practical expedient to time and material contracts is consistent with the Company’s current revenue recognition policy.

For fixed price contracts the Company will recognize revenue over time under the ASU because of the continuous transfer of control to the customer. The customer typically controls the work in process as evidenced either by contractual termination clauses or by the Company’s rights to payment for work performed to date to deliver services that do not have an alternative use to the Company. Input methods are an acceptable method of measuring progress towards completing under the ASU. This is consistent with the Company’s current policy of measuring progress towards completion based on the relationship of incurred labor hours at standard rates to its estimate of the total labor hours at standard rates it expects to incur over the term of the contract. The Company believes this methodology achieves a reliable measure of the revenue from the consulting services it provides to its customers under fixed price contracts.

The Company anticipates adopting the standard using the modified retrospective method. The Company is currently evaluating the required disclosures under the new standard and developing appropriate changes to its process, systems and controls.

On February 25, 2016, the FASB issued ASU No. 2016-02, Leases, which requires lessees to recognize most leases on their balance sheet.  The new standard will be effective for the Company on the first day of fiscal 2019 (December 29, 2018).  Early adoption is permitted.  The standard requires use of the modified retrospective transition method, with elective relief, which requires application of the guidance for all periods presented.  The Company is evaluating the effect that ASU No. 2016-02 will have on its consolidated financial statements and related disclosures.  The Company has not yet selected a transition method nor has it determined the effect of the standard on its ongoing financial reporting. The standard will require the Company to record a right of use asset and a lease liability that will materially gross up its balance sheet.    

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Fair Value Measurements

6 Months Ended

Jun. 30, 2017

Fair Value Disclosures [Abstract]

Fair Value Measurements

Note 2: Fair Value Measurements

The Company measures certain financial assets and liabilities at fair value on a recurring basis, including available-for-sale fixed income 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 six months ended June 30, 2017 and July 1, 2016. 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 June 30, 2017:

	Fair Value Measurements at Reporting Date Using
			Quoted Prices in				Significant
			Active Markets for		Significant Other		Unobservable
			Identical Assets		Observable Inputs		Inputs
(In thousands)	Total		(Level 1)		(Level 2)		(Level 3)
Assets
Money market securities (1)	$	9,259	$	9,259	$	-	$	-
Fixed income available- for-sale securities (2)		71,763		-		71,763		-
Fixed income trading securities held in deferred compensation plan (3)		14,033		14,033		-		-
Equity trading securities held in deferred compensation plan (3)		34,637		34,637		-		-
Total	$	129,692	$	57,929	$	71,763	$	-
Liabilities
Deferred compensation plan (4)		54,082		54,082		-		-
Total	$	54,082	$	54,082	$	-	$	-

⁽¹⁾ Included in cash and cash equivalents on the Company’s unaudited condensed consolidated balance sheet.

⁽²⁾ Included in short-term investments on the Company’s unaudited condensed consolidated balance sheet.

⁽³⁾ Included in prepaid expenses and other assets and deferred compensation plan assets on the Company’s unaudited condensed consolidated balance sheet.

⁽⁴⁾ Included in accrued payroll and employee benefits and deferred compensation on the Company’s unaudited condensed consolidated balance sheet.

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

	Fair Value Measurements at Reporting Date Using
			Quoted Prices in				Significant
			Active Markets for		Significant Other		Unobservable
			Identical Assets		Observable Inputs		Inputs
(In thousands)	Total		(Level 1)		(Level 2)		(Level 3)
Assets
Money market securities (1)	$	21,918	$	21,918	$	-	$	-
Fixed income available- for-sale securities (2)		58,755		-		58,755		-
Fixed income trading securities held in deferred compensation plan (3)		11,872		11,872		-		-
Equity trading securities held in deferred compensation plan (3)		36,395		36,395		-		-
Total	$	128,940	$	70,185	$	58,755	$	-
Liabilities
Deferred compensation plan (4)		53,617		53,617		-		-
Total	$	53,617	$	53,617	$	-	$	-

⁽¹⁾ Included in cash and cash equivalents on the Company’s unaudited condensed consolidated balance sheet.

⁽²⁾ Included in short-term investments on the Company’s unaudited condensed consolidated balance sheet.

⁽³⁾ Included in prepaid expenses and other assets and deferred compensation plan assets on the Company’s unaudited condensed consolidated balance sheet.

⁽⁴⁾ Included in accrued payroll and employee benefits and deferred compensation on the Company’s unaudited condensed consolidated balance sheet.

Fixed income available-for-sale securities as of June 30, 2017 and December 30, 2016 represent obligations of United States agencies. 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, cash equivalents and short-term investments consisted of the following as of June 30, 2017:

	Amortized		Unrealized		Unrealized		Estimated
(In thousands)	Cost		Gains		Losses		Fair Value
Classified as current assets:
Cash	$	80,974	$	-	$	-	$	80,974
Cash equivalents:
Money market securities		9,259		-		-		9,259
Total cash equivalents		9,259		-		-		9,259
Total cash and cash equivalents		90,233		-		-		90,233
Short-term investments:
U.S. agency securities		72,000		-		(237)		71,763
Total short-term investments		72,000		-		(237)		71,763
Total cash, cash equivalents and short-term investments	$	162,233	$	-	$	(237)	$	161,996

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

	Amortized		Unrealized		Unrealized		Estimated
(In thousands)	Cost		Gains		Losses		Fair Value
Classified as current assets:
Cash	$	93,049	$	-	$	-	$	93,049
Cash equivalents:
Money market securities		21,918		-		-		21,918
Total cash equivalents		21,918		-		-		21,918
Total cash and cash equivalents		114,967		-		-		114,967
Short-term investments:
U.S. agency securities		59,000		-		(245)		58,755
Total short-term investments		59,000		-		(245)		58,755
Total cash, cash equivalents and short-term investments	$	173,967	$	-	$	(245)	$	173,722

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 June 30, 2017:

	Amortized		Estimated
(In thousands)	Cost		Fair Value
Due within one year	$	32,000	$	31,936
Due between one and two years		40,000		39,827
Total	$	72,000	$	71,763

At June 30, 2017 and December 30, 2016, 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 consolidated balance sheet at June 30, 2017 and December 30, 2016, but require disclosure of their fair values: accounts receivable, other assets and accounts payable. The estimated fair value of such instruments at June 30, 2017 and December 30, 2016 approximates their carrying value as reported on the consolidated balance sheet.

There were no other-than-temporary impairments or credit losses related to available-for-sale securities during the three and six months ended June 30, 2017 and July 1, 2016.

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Net Income Per Share

6 Months Ended

Jun. 30, 2017

Earnings Per Share [Abstract]

Net Income Per Share

Note 3: Net Income Per Share

Basic per share amounts are computed using the weighted-average number of common shares outstanding during the period. Diluted per share amounts are calculated using the weighted-average number of common shares outstanding during the period and, when dilutive, the weighted-average number of potential common shares from the issuance of common stock to satisfy outstanding restricted stock units and the exercise of outstanding options to purchase common stock using the treasury stock method.

The following schedule reconciles the shares used to calculate basic and diluted net income per share:

	Three Months Ended				Six Months Ended
	June 30,		July 1,		June 30,		July 1,
(In thousands)	2017		2016		2017		2016
Shares used in basic per share computation		26,415		26,631		26,358		26,572
Effect of dilutive common stock options outstanding		135		127		133		124
Effect of dilutive restricted stock units outstanding		418		506		489		560
Shares used in diluted per share computation		26,968		27,264		26,980		27,256

There were no options excluded from the diluted per share calculations for the three and six months ended June 30, 2017 and July 1, 2016.

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Stock-Based Compensation

6 Months Ended

Jun. 30, 2017

Share-based Compensation [Abstract]

Stock-Based Compensation

Note 4: Stock-Based Compensation

Restricted Stock Units

Restricted stock unit grants are designed to attract and retain employees, and to better align employee interests with those of the Company’s stockholders. For a select group of employees, up to 40% of their annual bonus is settled with fully vested restricted stock unit awards. Under these fully vested restricted stock unit awards, the holder of each award has the right to receive one share of the Company’s common stock for each fully vested restricted stock unit four years from the date of grant. Each individual who receives a fully vested restricted stock unit award is also granted a matching number of unvested restricted stock unit awards. Unvested restricted stock unit awards are also granted for select new hires and promotions. These unvested restricted stock unit awards generally cliff vest four years from the date of grant, at which time the holder of each award will have the right to receive one share of the Company’s common stock for each restricted stock unit award provided the holder of each award has met certain employment conditions. In the case of retirement at 59½ years or older, all unvested restricted stock unit awards will continue to vest, provided that the holder of each award does all consulting work through the Company and does not become an employee for a past or present client, beneficial party or competitor of the Company.

The value of these restricted stock unit awards is determined based on the market price of the Company’s common stock on the date of grant. The value of fully vested restricted stock unit awards issued is recorded as a reduction to accrued bonuses. The portion of bonus expense that the Company expects to settle with fully vested restricted stock unit awards is recorded as stock-based compensation during the period the bonus is earned. The Company recorded stock-based compensation expense associated with accrued bonus awards of $2,201,000 and $1,451,000 during the three months ended June 30, 2017 and July 1, 2016, respectively. For the six months ended June 30, 2017 and July 1, 2016, the Company recorded stock-based compensation expense associated with accrued bonus awards of $4,129,000 and $3,168,000, respectively. The value of the unvested restricted stock unit awards granted is recognized on a straight-line basis over the shorter of the four-year vesting period or the period between the grant date and the date the award recipient turns 59½. If the award recipient is 59½ years or older on the date of grant, the value of the entire award is expensed upon grant. The Company recorded stock-based compensation expense associated with the unvested restricted stock unit awards of $1,238,000 and $1,206,000 during the three months ended June 30, 2017 and July 1, 2016, respectively. The Company recorded stock-based compensation expense associated with the unvested restricted stock unit awards of $4,494,000 and $4,332,000 during the six months ended June 30, 2017 and July 1, 2016, respectively.

Stock Options

Stock options are granted for terms of ten years and generally vest 25% per year over a four-year period from the grant date. Unvested stock option awards will continue to vest in the case of retirement at 59½ years or older, provided that the holder of each award does all consulting work through the Company and does not become an employee for a past or present client, beneficial party or competitor of the Company. The Company grants options at exercise prices equal to the fair value of the Company’s common stock on the date of grant. The Company recorded stock-based compensation expense associated with stock option grants of $93,000 and $52,000 during the three months ended June 30, 2017 and July 1, 2016, respectively. The Company recorded stock-based compensation expense associated with stock option grants of $564,000 and $429,000 during the six months ended June 30, 2017 and July 1, 2016, respectively.

The Company uses the Black-Scholes option-pricing model to determine the fair value of options granted. The determination of the fair value of stock option awards on the date of grant using an option-pricing model is affected by the Company’s stock price as well as assumptions regarding a number of complex and subjective variables. These variables include expected stock price volatility over the term of the award, actual and projected employee stock option exercise behaviors, the risk-free interest rate and expected dividends.

The Company used historical exercise and post-vesting forfeiture and expiration data to estimate the expected term of options granted. The historical volatility of the Company’s common stock over a period of time equal to the expected term of the options granted was used to estimate expected volatility. The risk-free interest rate used in the option-pricing model was based on United States Treasury zero-coupon issues with remaining terms similar to the expected term of the options. The dividend yield assumption considers the expectation of continued declaration of dividends, offset by option holders’ dividend equivalent rights.

The Company accounts for forfeitures of stock-based awards when they occur. All stock-based payment awards are recognized on a straight-line basis over the requisite service periods of the awards.

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Treasury Stock

6 Months Ended

Jun. 30, 2017

Equity [Abstract]

Treasury Stock

Note 5: Treasury Stock

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 117,582 shares of its common stock for $7,004,000 during the six months ended June 30, 2017.  The Company repurchased 90,505 shares of its common stock for $4,458,000 during the six months ended July 1, 2016. As of June 30, 2017 the Company had remaining authorization under its stock repurchase plans of $50,303,000 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 six months ended June 30, 2017 and July 1, 2016, respectively

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Deferred Compensation Plans

6 Months Ended

Jun. 30, 2017

Deferred Compensation Arrangements [Abstract]

Deferred Compensation Plans

Note 6: Deferred Compensation Plans

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% 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 June 30, 2017 and December 30, 2016, the invested amounts under the plans totaled $48,670,000 and $48,267,000, respectively. These assets are classified as trading securities and are recorded at fair value with changes recorded as adjustments to miscellaneous income, net.

As of June 30, 2017 and December 30, 2016, vested amounts due under the plans totaled $54,082,000 and $53,617,000, respectively. Changes in the liability are recorded as adjustments to compensation expense. During the three months ended June 30, 2017 and July 1, 2016, the Company recognized compensation expense of $1,020,000 and $938,000, 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. During the six months ended June 30, 2017 and July 1, 2016, the Company recognized compensation expense of $2,917,000 and $1,366,000, 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.

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Supplemental Cash Flow Information

6 Months Ended

Jun. 30, 2017

Supplemental Cash Flow Information [Abstract]

Supplemental Cash Flow Information

Note 7: Supplemental Cash Flow Information

The following is supplemental disclosure of cash flow information:

	Six Months Ended
(In thousands)	June 30, 2017		July 1, 2016
Cash paid during period:
Income taxes	$	8,522	$	11,808
Non-cash investing and financing activities:
Unrealized gain on short-term investments	$	4	$	84
Vested stock unit awards issued to settle accrued bonuses	$	6,910	$	6,334
Accrual for capital expenditures	$	135	$	422

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Accounts Receivable, Net

6 Months Ended

Jun. 30, 2017

Receivables [Abstract]

Accounts Receivable, Net

Note 8: Accounts Receivable, Net

At June 30, 2017 and December 30, 2016, accounts receivable, net, was comprised of the following:

	June 30,		December 30,
(In thousands)	2017		2016
Billed accounts receivable	$	72,915	$	60,510
Unbilled accounts receivable		37,862		30,316
Allowance for contract losses and doubtful accounts		(3,333)		(3,417)
Total accounts receivable, net	$	107,444	$	87,409

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Segment Reporting

6 Months Ended

Jun. 30, 2017

Segment Reporting [Abstract]

Segment Reporting

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 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.

Segment information for the three and six months ended June 30, 2017 and July 1, 2016 follows:

Revenues
	Three Months Ended				Six Months Ended
(In thousands)	June 30, 2017		July 1, 2016		June 30, 2017		July 1, 2016
Engineering and Other Scientific	$	69,795	$	60,979	$	136,478	$	125,789
Environmental and Health		18,045		16,316		35,484		34,662
Total revenues	$	87,840	$	77,295	$	171,962	$	160,451

Operating Income
	Three Months Ended				Six Months Ended
(In thousands)	June 30, 2017		July 1, 2016		June 30, 2017		July 1, 2016
Engineering and Other Scientific	$	24,313	$	19,561	$	46,634	$	40,699
Environmental and Health		5,824		4,028		11,303		9,223
Total segment operating income		30,137		23,589		57,937		49,922
Corporate operating expense		(9,820)		(8,658)		(22,986)		(18,555)
Total operating income	$	20,317	$	14,931	$	34,951	$	31,367

Capital Expenditures
	Three Months Ended				Six Months Ended
(In thousands)	June 30, 2017		July 1, 2016		June 30, 2017		July 1, 2016
Engineering and Other Scientific	$	794	$	1,273	$	1,802	$	2,463
Environmental and Health		64		38		106		61
Total segment capital expenditures		858		1,311		1,908		2,524
Corporate capital expenditures		361		590		618		858
Total capital expenditures	$	1,219	$	1,901	$	2,526	$	3,382

Depreciation and Amortization
	Three Months Ended				Six Months Ended
(In thousands)	June 30, 2017		July 1, 2016		June 30, 2017		July 1, 2016
Engineering and Other Scientific	$	1,163	$	1,116	$	2,278	$	2,137
Environmental and Health		44		45		85		88
Total segment depreciation and amortization		1,207		1,161		2,363		2,225
Corporate depreciation and amortization		422		363		832		702
Total depreciation and amortization	$	1,629	$	1,524	$	3,195	$	2,927

One customer comprised 12% of the Company’s revenues during the three and six months ended June 30, 2017. No other single customer comprised more than 10% of the Company’s revenues during the three months and six months ended June 30, 2017. No single customer comprised more than 10% of the Company’s revenues during the three and six months ended July 1, 2016. One customer comprised 12% of the Company’s accounts receivable at June 30, 2017. No single customer comprised more than 10% of the Company’s accounts receivable at December 30, 2016.

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Contingencies

6 Months Ended

Jun. 30, 2017

Commitments and Contingencies Disclosure [Abstract]

Contingencies

Note 10: 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.

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Basis of Presentation (Policies)

6 Months Ended

Jun. 30, 2017

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

Exponent, Inc. (referred to as the “Company” or “Exponent”) is an engineering and scientific consulting firm that provides solutions to complex problems. The Company operates on a 52-53 week fiscal year ending on the Friday closest to the last day of December.

The accompanying unaudited condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information, the instructions to Form 10-Q and Article 10 of Regulation S-X promulgated by the Securities and Exchange Commission. Accordingly, they do not contain all the information and notes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, all adjustments which are necessary for the fair presentation of the condensed consolidated financial statements have been included and all such adjustments are of a normal and recurring nature. The operating results for the three and six months ended June 30, 2017 are not necessarily representative of the results of future quarterly or annual periods. The following information should be read in conjunction with the audited consolidated financial statements and accompanying notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 30, 2016, which was filed with the U.S. Securities and Exchange Commission on February 24, 2017.

The unaudited condensed consolidated financial statements include the accounts of Exponent, Inc. and its subsidiaries, which are all wholly owned. All intercompany accounts and transactions have been eliminated in consolidation.

Use of Estimates

Use of Estimates. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Significant items subject to such estimates and assumptions include accounting for revenue recognition and estimating the allowance for contract losses and doubtful accounts. Actual results could differ from those estimates.

Recent Accounting Pronouncements Not Yet Effective

Recent Accounting Pronouncements Not Yet Effective. On May 28, 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in U.S. generally accepted accounting principles (“GAAP”) when it becomes effective. The new standard is effective for the Company on the first day of fiscal 2018 (December 30, 2017). The two permitted transition methods under the new standard are the full retrospective method, in which case the standard would be applied to each prior reporting period presented, or the modified retrospective method, in which case the cumulative effect of applying the standard would be recognized at the date of initial application.

The impact of adopting the new standard is not expected to be material because the analysis of the Company’s contracts under the new revenue recognition standard supports the recognition of revenue over time, which is consistent with the Company’s current revenue recognition model.

Substantially all of the Company’s engagements are performed under time and material or fixed-price arrangements. For time and materials contracts the Company anticipates utilizing the practical expedient under the ASU which states, if an entity has a right to consideration from a customer in an amount that corresponds directly with the value of the entity’s performance completed to date (for example, a service contract in which an entity bills a fixed amount for each hour or service provided), the entity may recognize revenue in the amount to which the entity has a right to invoice. Application of the practical expedient to time and material contracts is consistent with the Company’s current revenue recognition policy.

For fixed price contracts the Company will recognize revenue over time under the ASU because of the continuous transfer of control to the customer. The customer typically controls the work in process as evidenced either by contractual termination clauses or by the Company’s rights to payment for work performed to date to deliver services that do not have an alternative use to the Company. Input methods are an acceptable method of measuring progress towards completing under the ASU. This is consistent with the Company’s current policy of measuring progress towards completion based on the relationship of incurred labor hours at standard rates to its estimate of the total labor hours at standard rates it expects to incur over the term of the contract. The Company believes this methodology achieves a reliable measure of the revenue from the consulting services it provides to its customers under fixed price contracts.

The Company anticipates adopting the standard using the modified retrospective method. The Company is currently evaluating the required disclosures under the new standard and developing appropriate changes to its process, systems and controls.

On February 25, 2016, the FASB issued ASU No. 2016-02, Leases, which requires lessees to recognize most leases on their balance sheet.  The new standard will be effective for the Company on the first day of fiscal 2019 (December 29, 2018).  Early adoption is permitted.  The standard requires use of the modified retrospective transition method, with elective relief, which requires application of the guidance for all periods presented.  The Company is evaluating the effect that ASU No. 2016-02 will have on its consolidated financial statements and related disclosures.  The Company has not yet selected a transition method nor has it determined the effect of the standard on its ongoing financial reporting. The standard will require the Company to record a right of use asset and a lease liability that will materially gross up its balance sheet.

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Basis of Presentation (Tables)

6 Months Ended

Jun. 30, 2017

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Common Stock Dividends Declared Per Share

The Company declared and paid cash dividends per common share during the periods presented as follows:

	Fiscal Year 2017
	Dividends		Amount
	Per Share		(in thousands)
First Quarter	$	0.21	$	5,374
Second Quarter		0.21		5,424
Total	$	0.42	$	10,798

	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

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Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2017

Fair Value Disclosures [Abstract]

Assets and Liabilities Measured at Fair Value on Recurring Basis

The fair value of these certain financial assets and liabilities was determined using the following inputs at June 30, 2017:

	Fair Value Measurements at Reporting Date Using
			Quoted Prices in				Significant
			Active Markets for		Significant Other		Unobservable
			Identical Assets		Observable Inputs		Inputs
(In thousands)	Total		(Level 1)		(Level 2)		(Level 3)
Assets
Money market securities (1)	$	9,259	$	9,259	$	-	$	-
Fixed income available- for-sale securities (2)		71,763		-		71,763		-
Fixed income trading securities held in deferred compensation plan (3)		14,033		14,033		-		-
Equity trading securities held in deferred compensation plan (3)		34,637		34,637		-		-
Total	$	129,692	$	57,929	$	71,763	$	-
Liabilities
Deferred compensation plan (4)		54,082		54,082		-		-
Total	$	54,082	$	54,082	$	-	$	-

⁽¹⁾ Included in cash and cash equivalents on the Company’s unaudited condensed consolidated balance sheet.

⁽²⁾ Included in short-term investments on the Company’s unaudited condensed consolidated balance sheet.

⁽³⁾ Included in prepaid expenses and other assets and deferred compensation plan assets on the Company’s unaudited condensed consolidated balance sheet.

⁽⁴⁾ Included in accrued payroll and employee benefits and deferred compensation on the Company’s unaudited condensed consolidated balance sheet.

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

	Fair Value Measurements at Reporting Date Using
			Quoted Prices in				Significant
			Active Markets for		Significant Other		Unobservable
			Identical Assets		Observable Inputs		Inputs
(In thousands)	Total		(Level 1)		(Level 2)		(Level 3)
Assets
Money market securities (1)	$	21,918	$	21,918	$	-	$	-
Fixed income available- for-sale securities (2)		58,755		-		58,755		-
Fixed income trading securities held in deferred compensation plan (3)		11,872		11,872		-		-
Equity trading securities held in deferred compensation plan (3)		36,395		36,395		-		-
Total	$	128,940	$	70,185	$	58,755	$	-
Liabilities
Deferred compensation plan (4)		53,617		53,617		-		-
Total	$	53,617	$	53,617	$	-	$	-

⁽¹⁾ Included in cash and cash equivalents on the Company’s unaudited condensed consolidated balance sheet.

⁽²⁾ Included in short-term investments on the Company’s unaudited condensed consolidated balance sheet.

⁽³⁾ Included in prepaid expenses and other assets and deferred compensation plan assets on the Company’s unaudited condensed consolidated balance sheet.

⁽⁴⁾ Included in accrued payroll and employee benefits and deferred compensation on the Company’s unaudited condensed consolidated balance sheet.

Cash, cash equivalents and short-term investments

Cash, cash equivalents and short-term investments consisted of the following as of June 30, 2017:

	Amortized		Unrealized		Unrealized		Estimated
(In thousands)	Cost		Gains		Losses		Fair Value
Classified as current assets:
Cash	$	80,974	$	-	$	-	$	80,974
Cash equivalents:
Money market securities		9,259		-		-		9,259
Total cash equivalents		9,259		-		-		9,259
Total cash and cash equivalents		90,233		-		-		90,233
Short-term investments:
U.S. agency securities		72,000		-		(237)		71,763
Total short-term investments		72,000		-		(237)		71,763
Total cash, cash equivalents and short-term investments	$	162,233	$	-	$	(237)	$	161,996

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

	Amortized		Unrealized		Unrealized		Estimated
(In thousands)	Cost		Gains		Losses		Fair Value
Classified as current assets:
Cash	$	93,049	$	-	$	-	$	93,049
Cash equivalents:
Money market securities		21,918		-		-		21,918
Total cash equivalents		21,918		-		-		21,918
Total cash and cash equivalents		114,967		-		-		114,967
Short-term investments:
U.S. agency securities		59,000		-		(245)		58,755
Total short-term investments		59,000		-		(245)		58,755
Total cash, cash equivalents and short-term investments	$	173,967	$	-	$	(245)	$	173,722

Summary of Cost and Estimated Fair Value of Short Term Fixed Income Securities

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 June 30, 2017:

	Amortized		Estimated
(In thousands)	Cost		Fair Value
Due within one year	$	32,000	$	31,936
Due between one and two years		40,000		39,827
Total	$	72,000	$	71,763

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Net Income Per Share (Tables)

6 Months Ended

Jun. 30, 2017

Earnings Per Share [Abstract]

Reconciles Shares to Calculate Basic and Diluted Net Income Per Share

The following schedule reconciles the shares used to calculate basic and diluted net income per share:

	Three Months Ended				Six Months Ended
	June 30,		July 1,		June 30,		July 1,
(In thousands)	2017		2016		2017		2016
Shares used in basic per share computation		26,415		26,631		26,358		26,572
Effect of dilutive common stock options outstanding		135		127		133		124
Effect of dilutive restricted stock units outstanding		418		506		489		560
Shares used in diluted per share computation		26,968		27,264		26,980		27,256

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Supplemental Cash Flow Information (Tables)

6 Months Ended

Jun. 30, 2017

Supplemental Cash Flow Information [Abstract]

Supplemental Disclosure of Cash Flow Information

The following is supplemental disclosure of cash flow information:

	Six Months Ended
(In thousands)	June 30, 2017		July 1, 2016
Cash paid during period:
Income taxes	$	8,522	$	11,808
Non-cash investing and financing activities:
Unrealized gain on short-term investments	$	4	$	84
Vested stock unit awards issued to settle accrued bonuses	$	6,910	$	6,334
Accrual for capital expenditures	$	135	$	422

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Accounts Receivable, Net (Tables)

6 Months Ended

Jun. 30, 2017

Receivables [Abstract]

Accounts Receivable, Net

At June 30, 2017 and December 30, 2016, accounts receivable, net, was comprised of the following:

	June 30,		December 30,
(In thousands)	2017		2016
Billed accounts receivable	$	72,915	$	60,510
Unbilled accounts receivable		37,862		30,316
Allowance for contract losses and doubtful accounts		(3,333)		(3,417)
Total accounts receivable, net	$	107,444	$	87,409

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Segment Reporting (Tables)

6 Months Ended

Jun. 30, 2017

Segment Reporting [Abstract]

Segment Reporting Information, by Segment

Segment information for the three and six months ended June 30, 2017 and July 1, 2016 follows:

Revenues
	Three Months Ended				Six Months Ended
(In thousands)	June 30, 2017		July 1, 2016		June 30, 2017		July 1, 2016
Engineering and Other Scientific	$	69,795	$	60,979	$	136,478	$	125,789
Environmental and Health		18,045		16,316		35,484		34,662
Total revenues	$	87,840	$	77,295	$	171,962	$	160,451

Operating Income
	Three Months Ended				Six Months Ended
(In thousands)	June 30, 2017		July 1, 2016		June 30, 2017		July 1, 2016
Engineering and Other Scientific	$	24,313	$	19,561	$	46,634	$	40,699
Environmental and Health		5,824		4,028		11,303		9,223
Total segment operating income		30,137		23,589		57,937		49,922
Corporate operating expense		(9,820)		(8,658)		(22,986)		(18,555)
Total operating income	$	20,317	$	14,931	$	34,951	$	31,367

Capital Expenditures
	Three Months Ended				Six Months Ended
(In thousands)	June 30, 2017		July 1, 2016		June 30, 2017		July 1, 2016
Engineering and Other Scientific	$	794	$	1,273	$	1,802	$	2,463
Environmental and Health		64		38		106		61
Total segment capital expenditures		858		1,311		1,908		2,524
Corporate capital expenditures		361		590		618		858
Total capital expenditures	$	1,219	$	1,901	$	2,526	$	3,382

Depreciation and Amortization
	Three Months Ended				Six Months Ended
(In thousands)	June 30, 2017		July 1, 2016		June 30, 2017		July 1, 2016
Engineering and Other Scientific	$	1,163	$	1,116	$	2,278	$	2,137
Environmental and Health		44		45		85		88
Total segment depreciation and amortization		1,207		1,161		2,363		2,225
Corporate depreciation and amortization		422		363		832		702
Total depreciation and amortization	$	1,629	$	1,524	$	3,195	$	2,927

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Basis of Presentation - Additional Information (Detail) - Subsequent Event	1 Months Ended
	Jul. 18, 2017 $ / shares
Class of Stock [Line Items]
Common stock, dividends per share declared, subsequent event	$ 0.21
Dividends Payable, Date Declared	Jul. 18, 2017
Dividends Payable, Date to be Paid	Sep. 22, 2017
Dividends Payable, Date of Record	Sep. 01, 2017

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Common Stock Dividends Declared And Paid Per Share (Detail) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended						6 Months Ended	12 Months Ended
	Jun. 30, 2017	Mar. 31, 2017	Dec. 30, 2016	Sep. 30, 2016	Jul. 01, 2016	Apr. 01, 2016	Jun. 30, 2017	Dec. 30, 2016
Class of Stock [Line Items]
Dividends Per Share	$ 0.21	$ 0.21	$ 0.18	$ 0.18	$ 0.18	$ 0.18	$ 0.42	$ 0.72
Amount	$ 5,424	$ 5,374	$ 4,607	$ 4,659	$ 4,675	$ 4,628	$ 10,798	$ 18,569

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Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) - USD ($) $ in Thousands		Jun. 30, 2017	Dec. 30, 2016
Assets
Money market securities	[1]	$ 9,259	$ 21,918
Total		129,692	128,940
Liabilities
Deferred compensation plan	[2]	54,082	53,617
Total		54,082	53,617
Fixed income securities
Assets
Fixed income available-for-sale securities	[3]	71,763	58,755
Fixed income trading securities held in deferred compensation plan	[4]	14,033	11,872
Equity securities
Assets
Equity trading securities held in deferred compensation plan	[4]	34,637	36,395
Fair Value, Inputs, Level 1
Assets
Money market securities	[1]	9,259	21,918
Total		57,929	70,185
Liabilities
Deferred compensation plan	[2]	54,082	53,617
Total		54,082	53,617
Fair Value, Inputs, Level 1 | Fixed income securities
Assets
Fixed income available-for-sale securities	[3]	0	0
Fixed income trading securities held in deferred compensation plan	[4]	14,033	11,872
Fair Value, Inputs, Level 1 | Equity securities
Assets
Equity trading securities held in deferred compensation plan	[4]	34,637	36,395
Fair Value, Inputs, Level 2
Assets
Money market securities	[1]	0	0
Total		71,763	58,755
Liabilities
Deferred compensation plan	[2]	0	0
Total		0	0
Fair Value, Inputs, Level 2 | Fixed income securities
Assets
Fixed income available-for-sale securities	[3]	71,763	58,755
Fixed income trading securities held in deferred compensation plan	[4]	0	0
Fair Value, Inputs, Level 2 | Equity securities
Assets
Equity trading securities held in deferred compensation plan	[4]	0	0
Fair Value, Inputs, Level 3
Assets
Money market securities	[1]	0	0
Total		0	0
Liabilities
Deferred compensation plan	[2]	0	0
Total		0	0
Fair Value, Inputs, Level 3 | Fixed income securities
Assets
Fixed income available-for-sale securities	[3]	0	0
Fixed income trading securities held in deferred compensation plan	[4]	0	0
Fair Value, Inputs, Level 3 | Equity securities
Assets
Equity trading securities held in deferred compensation plan	[4]	$ 0	$ 0

[1] Included in cash and cash equivalents on the Company’s unaudited condensed consolidated balance sheet.

[2] Included in accrued payroll and employee benefits and deferred compensation on the Company’s unaudited condensed consolidated balance sheet.

[3] Included in short-term investments on the Company’s unaudited condensed consolidated balance sheet.

[4] Included in prepaid expenses and other assets and deferred compensation plan assets on the Company’s unaudited condensed consolidated balance sheet.

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Cash, cash equivalents and short-term investments (Detail) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 30, 2016
Fair Value Measurements [Line Items]
Amortized Cost	$ 162,233	$ 173,967
Unrealized Gains	0	0
Unrealized Losses	(237)	(245)
Estimated Fair Value	161,996	173,722
U.S. agency securities
Fair Value Measurements [Line Items]
Amortized Cost	72,000	59,000
Unrealized Gains	0	0
Unrealized Losses	(237)	(245)
Estimated Fair Value	71,763	58,755
Cash
Fair Value Measurements [Line Items]
Amortized Cost	80,974	93,049
Unrealized Gains	0	0
Unrealized Losses	0	0
Estimated Fair Value	80,974	93,049
Money market securities
Fair Value Measurements [Line Items]
Amortized Cost	9,259	21,918
Unrealized Gains	0	0
Unrealized Losses	0	0
Estimated Fair Value	9,259	21,918
Total cash equivalents
Fair Value Measurements [Line Items]
Amortized Cost	9,259	21,918
Unrealized Gains	0	0
Unrealized Losses	0	0
Estimated Fair Value	9,259	21,918
Total cash and cash equivalents
Fair Value Measurements [Line Items]
Amortized Cost	90,233	114,967
Unrealized Gains	0	0
Unrealized Losses	0	0
Estimated Fair Value	90,233	114,967
Total short-term investments
Fair Value Measurements [Line Items]
Amortized Cost	72,000	59,000
Unrealized Gains	0	0
Unrealized Losses	(237)	(245)
Estimated Fair Value	$ 71,763	$ 58,755

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Summarizes Cost And Estimated Fair Value Of Short Term Fixed Income Securities (Detail) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 30, 2016
Fair Value Measurements [Line Items]
Due within one year, Amortized Cost	$ 32,000
Due between one and two years, Amortized Cost	40,000
Total Amortized Cost	72,000
Due within one year, Estimated Fair Value	31,936
Due between one and two years, Estimated Fair Value	39,827
Total Estimated Fair Value	$ 71,763	$ 58,755

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Reconciliation of Shares Used to Calculate Basic and Diluted Net Income Per Share (Detail) - shares shares in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jul. 01, 2016	Jun. 30, 2017	Jul. 01, 2016
Schedule Of Earnings Per Share Basic and Diluted [Line Items]
Shares used in basic per share computation	26,415	26,631	26,358	26,572
Shares used in diluted per share computation	26,968	27,264	26,980	27,256
Employee Stock Option
Schedule Of Earnings Per Share Basic and Diluted [Line Items]
Effect of dilutive stock outstanding	135	127	133	124
Restricted Stock Units (RSUs)
Schedule Of Earnings Per Share Basic and Diluted [Line Items]
Effect of dilutive stock outstanding	418	506	489	560

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Stock-Based Compensation - Additional Information (Detail) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jul. 01, 2016	Jun. 30, 2017	Jul. 01, 2016
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share Based Compensation Arrangement By Share Based Payment Award Options Expiration Term			10 years
Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentage of annual bonus settled with fully vested restricted stock unit awards			40.00%
Unvested Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock based compensation, vesting period			4 years
Employee Stock Option
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock based compensation expense	$ 93,000	$ 52,000	$ 564,000	$ 429,000
Vesting percentage of stock options granted per year			25.00%
Stock based compensation, vesting period			4 years
Vested Restricted Stock Awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock based compensation expense	2,201,000	1,451,000	$ 4,129,000	3,168,000
Stock based compensation, holding period			4 years
Vested Restricted Stock Awards | Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Recipient age to expense award on grant date			59 years 6 months
Unvested Restricted Stock Awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock based compensation expense	$ 1,238,000	$ 1,206,000	$ 4,494,000	$ 4,332,000
Unvested Restricted Stock Awards | Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Recipient age to expense award on grant date			59 years 6 months
Unvested Stock Options | Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Recipient age to expense award on grant date			59 years 6 months

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Treasury Stock - Additional Information (Detail) - USD ($)	6 Months Ended
	Jun. 30, 2017	Jul. 01, 2016	Oct. 19, 2016	Oct. 21, 2015
Equity, Class of Treasury Stock [Line Items]
Stock Repurchase Program, Authorized Amount			$ 35,000,000	$ 35,000,000
Purchase of treasury shares (in shares)	117,582	90,505
Repurchase of treasury shares	$ 7,004,000	$ 4,458,000
Remaining authorized amount for repurchase of common stock	50,303,000
Treasury stock reissued at lower than repurchase price	$ 5,667,000	$ 5,791,000

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Deferred Compensation Plans - Additional Information (Detail) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jul. 01, 2016	Jun. 30, 2017	Jul. 01, 2016	Dec. 30, 2016
Deferred Compensation, Excluding Share-based Payments and Retirement Benefits
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items]
Trading securities	$ 48,670,000		$ 48,670,000		$ 48,267,000
Deferred compensation plan vested amounts due	54,082,000		54,082,000		$ 53,617,000
Change in market value of trust assets	$ 1,020,000	$ 938,000	$ 2,917,000	$ 1,366,000
Maximum
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items]
Percentage of compensation deferred			100.00%

XML

Supplemental Disclosure of Cash Flow Information (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jul. 01, 2016	Jun. 30, 2017	Jul. 01, 2016
Cash paid during period:
Income taxes			$ 8,522	$ 11,808
Non-cash investing and financing activities:
Unrealized gain on short-term investments	$ (32)	$ (1)	4	84
Vested stock unit awards issued to settle accrued bonuses			6,910	6,334
Accrual for capital expenditures			$ 135	$ 422

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Accounts Receivable, Net (Detail) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 30, 2016
Accounts, Notes, Loans and Financing Receivable [Line Items]
Allowance for contract losses and doubtful accounts	$ (3,333)	$ (3,417)
Total accounts receivable, net	107,444	87,409
Billed accounts receivable
Accounts, Notes, Loans and Financing Receivable [Line Items]
Accounts Receivable	72,915	60,510
Unbilled accounts receivable
Accounts, Notes, Loans and Financing Receivable [Line Items]
Accounts Receivable	$ 37,862	$ 30,316

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Segment Reporting - Additional Information (Detail)	3 Months Ended	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2017	Jul. 01, 2016
Segment Reporting Information [Line Items]
Percentage of account receivable	10.00%	10.00%	10.00%
Percentage of Company's revenue	10.00%	10.00%	10.00%
Sales Revenue, Net [Member] | Customer Concentration Risk [Member]
Segment Reporting Information [Line Items]
Concentration Risk, Percentage	12.00%	12.00%
Accounts Receivable [Member]
Segment Reporting Information [Line Items]
Concentration Risk, Percentage	12.00%	12.00%

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Segment Information (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jul. 01, 2016	Jun. 30, 2017	Jul. 01, 2016
Segment Reporting Information [Line Items]
Revenues	$ 87,840	$ 77,295	$ 171,962	$ 160,451
Operating Income	20,317	14,931	34,951	31,367
Capital Expenditures	1,219	1,901	2,526	3,382
Depreciation and Amortization	1,629	1,524	3,195	2,927
Operating segments
Segment Reporting Information [Line Items]
Operating Income	30,137	23,589	57,937	49,922
Capital Expenditures	858	1,311	1,908	2,524
Depreciation and Amortization	1,207	1,161	2,363	2,225
Engineering and Other Scientific
Segment Reporting Information [Line Items]
Revenues	69,795	60,979	136,478	125,789
Operating Income	24,313	19,561	46,634	40,699
Capital Expenditures	794	1,273	1,802	2,463
Depreciation and Amortization	1,163	1,116	2,278	2,137
Environmental and Health
Segment Reporting Information [Line Items]
Revenues	18,045	16,316	35,484	34,662
Operating Income	5,824	4,028	11,303	9,223
Capital Expenditures	64	38	106	61
Depreciation and Amortization	44	45	85	88
Corporate
Segment Reporting Information [Line Items]
Operating Income	(9,820)	(8,658)	(22,986)	(18,555)
Capital Expenditures	361	590	618	858
Depreciation and Amortization	$ 422	$ 363	$ 832	$ 702