Good day. Welcome to Exponent's Fourth Quarter and Fiscal Year 2022 Financial Results Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your telephone keypad. To withdraw your question, please press star, then two. Please note, this event is being recorded. I would now like to turn the conference over to Joni Konstantelos. Please go ahead. Thank you, operator. Good afternoon, ladies and gentlemen. Thank you for joining us on Exponent's Fourth Quarter and Fiscal Year 2022 Financial Results Conference Call. Please note that this call will be simultaneously webcast on the investor relations section of the company's corporate website at www.exponent.com/investors. This conference call is the property of Exponent, and any taping or other reproduction is expressly prohibited without prior written consent. Joining me on the call today are Dr. Catherine Corrigan, President and Chief Executive Officer, and Richard Schlenker, Executive Vice President and Chief Financial Officer. Before we start, I would like to remind you that the following discussion contains forward-looking statements, including, but not limited to Exponent's market opportunities and future financial results that involve risks and uncertainties that may cause actual results to differ materially from those discussed here. Additional information that could cause actual results to differ from forward-looking statements can be found in Exponent's periodic SEC filings, including those factors discussed under the caption Risk Factor in Exponent's most recent Form 10-K or 10-Q. The forward-looking statements and risks in this conference call are based on current expectations as of today, Exponent assumes no obligation to update or revise them, whether as a result of new developments or otherwise. Now I will turn the call over to Dr. Catherine Corrigan, Chief Executive Officer. Catherine? Thank you, Joni. Thank you everyone for joining us today. I will start off by reviewing our fourth quarter and fiscal year 2022 business performance. Rich will then provide a more detailed review of our financial results and outlook for 2023. We will then open the call for questions. We delivered solid results in fiscal year 2022, growing net revenues by 7% year-over-year and expanding earnings per diluted share. In a year marked with evolving macroeconomic challenges and uncertainty, we continued to showcase the strength and resiliency of our business model. We saw strong demand across the business for Exponent's diversified portfolio of services through 2022. On the proactive side, our work in the consumer products, electronics, automotive, and life sciences sectors were key contributors for the year. On the reactive side, we saw robust litigation-related activity and a diversified portfolio of product safety and recall-related work spanning multiple industries. As innovation and technology become increasingly complex, the critical nature of our insights uniquely positions Exponent to address our clients' needs throughout the product life cycle. Turning to our engagements in more detail, within our proactive services, we saw strong demand for our work in user experience research and machine learning data studies across multiple industries. Clients look to Exponent for our expertise in understanding the human machine interface, from the cognitive impacts of virtual and augmented reality to the interactions between vehicle operators and advanced driver-assistance systems. They come to us when they need to acquire the most sophisticated, high quality, and curated training data sets to drive machine learning algorithms, because getting it right matters when it comes to product performance and safety. We saw increased activity in the life sciences sector related to regulatory issues as well as the safety and efficacy of healthcare products and treatments. Within the automotive sector, our work with electric vehicles around batteries was a key contributor to our growth year-over-year. Looking at our reactive business, we continue to experience robust demand for our domestic litigation and international arbitrations-related work, particularly in the toxic tort and environmental litigation arena, as well as advanced driver-assistance system litigation. We saw strong growth in engagements around product safety and recall, particularly in the transportation, life sciences, and consumer products industries. Clients are turning to us earlier in their investigation processes in order to benefit from our insights as they make critical product recall decisions. We saw our accelerated recruitment efforts materialize with 6% headcount growth year-over-year. While the landscape for top-tier talent remains highly competitive, we successfully increased headcount in key areas of the business where we have identified the greatest need and opportunity. We are encouraged by our momentum and are focused on strategically building our world-class team to position Exponent at the forefront of innovation and to meet the dynamic needs of the market. Turning to our segments, Exponent's Engineering and Other Scientific segments represented 83% of our net revenues in the fourth quarter and for the full year. Net revenues in this segment increased 10% in the fourth quarter and 8% during fiscal year 2022 as compared to the prior year period. Growth during the quarter and full year was broad-based, with continued strong demand for Exponent's services across the consumer products, electronics, life sciences, and automotive sectors. Exponent's Environmental and Health segment represented 17% of the company's net revenues in both the fourth quarter and fiscal year. Net revenues in this segment decreased 2% for the fourth quarter of 2022, and were flat during the full year 2022 compared to the same period in the prior year. Excluding the impact of foreign exchange, net revenue for the Environmental and Health segment increased 2% in the fourth quarter of 2022, and increased 4% during fiscal year 2022, as compared to the prior year period. Growth in this segment was primarily driven by Exponent's safety-related work, evaluating the impacts of chemicals on human health and the environment. Since our humble beginnings in 1967, Exponent has harnessed the power of technical excellence, objectivity, and disciplinary diversity to help unravel the complexities of innovations as they become reality. Looking ahead, we will continue to evolve our differentiated portfolio of services to be at the cutting edge of our clients' needs. We remain focused on advancing our long-term strategy by positioning Exponent to capitalize on disruptive trends and rising societal expectations for safety, health, sustainability, reliability, and performance. I'll now turn the call over to Rich to provide more detail on our fourth quarter and fiscal year 2022 results, as well as discuss our outlook for the first quarter and the full year 2023. Thank you, Catherine. Good afternoon, everyone. Let me start by saying all comparisons will be on a year-over-year basis, unless otherwise noted. For the fourth quarter of 2022, total revenues increased 12.2% to $127.4 million, and revenues before reimbursements, or net revenues, as I will refer to them from here on, increased 7.9% to $112.6 million as compared to the same period of 2021. The quarter's net revenue growth was negatively impacted by 0.7% from foreign exchange. Net income for the fourth quarter increased 10.5% to $22.5 million or $0.44 per diluted share as compared to $20.4 million or $0.38 per diluted share in the prior year period. EBITDA for the fourth quarter increased 3.1% to $31.1 million, producing a margin of 27.6% of net revenues, which exceeded our guidance. We expected the margins as we returned to decline as people returned to in-person engagement, both our employees and clients. Billable hours in the fourth quarter were approximately 354,000, an increase of 5.7% year-over-year. The average technical full-time equivalent employees in the fourth quarter were 989, which is an increase of 7.3% as compared to one year ago. Highlighting our focused recruiting, utilization in the fourth quarter was 69%, down from 70% in the same quarter of 2021, as we continue to balance headcount growth and utilization. The realized rate increase was approximately 2.5% for the fourth quarter as compared to the same period a year ago. In the fourth quarter, compensation expense, after adjusting for gains and losses in deferred compensation, increased 7.7%. Included in total compensation expense is a gain in deferred compensation of $6.7 million, as compared to a gain of $4.7 million in the same period of 2021. As a reminder, gains and losses in deferred compensation are offset in miscellaneous income and have no impact on the bottom line. Stock-based compensation expense in the fourth quarter was $4.3 million as compared to $4 million in the prior year period. Other operating expenses in the fourth quarter were up 6.8% to $9.3 million, driven primarily by increased activities as our employees continue to return to our offices. Included in other operating expenses is depreciation and amortization expense of $1.9 million for the quarter. As expected, G&A expenses were up 49.5% to $7 million for the fourth quarter. The increase in G&A expenses was primarily due to half the cost of our in-person managers meeting and increased marketing and recruiting activities. Interest income increased to $1.3 million for the fourth quarter. Higher interest income was driven by an increase in interest rates. Miscellaneous income, excluding the deferred compensation gain, was approximately $500,000 for the fourth quarter. Moving to our cash flows. During the fourth quarter, we generated $40.6 million in cash from operations, and capital expenditures were $2.9 million. During the quarter, we distributed $12.2 million to shareholders through dividend payments. Repurchased $13.2 million of common stock at an average price of $87.76. Turning to the full year results. For the year 2022, total revenues increased 10.1% to $513.3 million. Net revenues increased 6.7% to $463.8 million as compared to 2021. Net revenue growth was negatively impacted by 0.5% from foreign exchange. Net income for the year increased 1.1% to $102.3 million or $1.96 per diluted share as compared to a $101.2 million or $1.96 per diluted share in 2021. The tax benefit associated with accounting for share-based awards for 2022 was $5.8 million or $0.11 per diluted share, as compared to $10 million or $0.19 per diluted share in 2021. Inclusive of the tax benefit from share-based awards, Exponent's consolidated tax rate was 22.6% for the full year, as compared to 19.6% in 2021. For the year, I mean, EBITDA increased 3.8% to $137.2 million, producing a margin of 29.6% of net revenues, which exceeded our guidance, as expenses were still below normal in the first half of the year. Billable hours for 2022 were approximately 1,465,000, an increase of 4.2% year-over-year. Utilization for the full year was 73.8%, down from 75.1% during 2021. Utilization for the full year was in line with expectations as we increased headcount following the pandemic. Average technical full-time equivalent employees for the year were 955, an increase of 6.1% as compared to 2021. The realized rate increase was approximately 2.5% for the year 2022. Compensation expense, after adjusting for gains and losses in deferred compensation, increased 5.7%. Included in total compensation expense is a loss in deferred compensation of $14.1 million, as compared to a gain of $14.7 million during 2021. This results in a $28.8 million change year-over-year. Stock-based compensation expense in 2022 was $20.4 million as compared to $19.3 million in the prior year period. Other operating expenses were up 7.6% to $35.1 million. Included in other operating expenses is depreciation and amortization expense of $7.1 million for the full year. As expected, G&A expenses were up 54.8% to $23.7 million in 2022. The increase in G&A expenses was primarily due to the cost of our in-person managers meeting and increased marketing and recruiting activities. Interest income increased approximately $2 million to $2.1 million for the full year. Higher interest rates was driven by an increase in interest rates. Miscellaneous income, excluding the deferred compensation loss, was $3.4 million for 2022. Moving to our cash flows. During 2022, we generated $93.8 million in cash from operation and capital expenditures were $12 million. For the full year, we distributed $49.2 million to shareholders through dividend payments and $155.9 million of share repurchases at an average price of $88.69. As of year-end, the company had $161.5 million in cash. Turning to our outlook for the first quarter and full year 2023. We expect first quarter 2023 revenues before reimbursements to grow in the high single to low double digits and EBITDA to be 27.5%-28.2% of revenues before reimbursements. For the full year 2023, we expect revenues before reimbursements to also grow in the high single to low double digits and EBITDA margin to be 28%-28.5% of revenues before reimbursements. While this is a step down from 2022, it exceeds our pre-pandemic EBITDA margin of 27.4% in 2019 by 60-110 basis points. During 2023, we expect the year-over-year growth in technical full-time equivalent employees to be 6%-8%. We are having success in accelerating our recruiting and are pleased that our turnover declined to approximately 16% in 2022, and we expect it to be approximately 15% in 2023. The increased headcount will likely lead to slightly lower utilization. We expect utilization in the first quarter to be 73%-75% as compared to 76.5% in the first quarter of 2022. We expect full year utilization to be 72%-74% as compared to 74% in 2022. We still believe our long-term target of sustained mid-seventies utilization is achievable as we continue to build critical mass in offices and practices and increase the amount of proactive work. We expect 2023 year-over-year realized rate increase to be 3%-4%. We expect the realized rate increase in the first quarter will be at the top end of that range. For the first quarter, we expect stock-based compensation expense to be $7 million-$7.3 million and each of the remaining quarters to be $4.8 million-$5.2 million. For the full year 2023, we expect stock-based compensation to be $21.5 million-$23 million. For the first quarter, we expect other operating expenses to be $9.5 million-$10 million. For the full year, we expect other operating expenses to be $40 million-$41 million as we continue to grow our headcount and return to our offices. In many of our offices, we are experiencing an increased presence of employees. We believe our office environment provides long-term value as it supports collaboration for our interdisciplinary teams and staff development, which result in higher value for our clients and retention of our employees. For the first quarter, we expect G&A expenses to be $6.4 million-$6.8 million. For the full year 2023, we expect G&A expenses to be $27 million-$27.6 million. As a reminder, travel was still very low in the first half of 2022, so the year-over-year growth in G&A expenses is related to increased headcount, recruiting, business development and travel. We expect interest income to be $1 million-$1.4 million per quarter. In addition, we anticipate miscellaneous income to be $600 thousand-$800 thousand per quarter. For 2023, we estimate, based on our current stock price, that our tax benefit associated with share-based awards will be approximately $3 million for the first quarter and full year. As a reminder, we had $5.8 million of tax benefit from share-based awards in 2022. This difference will reduce net income by $2.8 million and earnings per diluted share by $0.06. The tax benefit from share-based awards is determined based on the change in value of share-based awards between grant and issuance date. For 2023, we expect our tax rate exclusive of the tax benefit for share-based awards to be approximately 27.5% as compared to 27% in 2022. For the first quarter of 2023, we expect our tax rate inclusive of the tax benefit from share-based awards to be approximately 18.5% as compared to 9.7% in the same quarter a year ago. For the full year 2023, the tax rate inclusive of the tax benefit associated with share-based awards is expected to be 25% as compared to 22.7% in 2022. Capital expenditures for the full year 2023 are expected to be $12 million-$15 million. We are pleased to have delivered another solid quarter in fiscal year 2022, further emphasizing the strength and durability of our business model. As we look to the year ahead, we remain confident in our ability to continue to grow profitably. I will now turn the call back to Catherine for closing remarks. Thank you, Rich. For decades, Exponent has stood firmly at the forefront of engineering and scientific excellence. Our fiscal 2022 results demonstrate Exponent's resilience, resilient business model and financial strength in a challenging and uncertain macro environment. Our exceptional talents, coupled with our diversified and growing portfolio of services, positions us as a vital partner to help address the evolving needs of our clients. As we look to the year ahead, we remain keenly focused on positioning the company for continued success and creating long-term value for our shareholders. Operator, we are now ready for questions. Thank you. We will now begin the question-and-answer section. To ask a question, you may press star then one on your telephone keypad. If you're using a speakerphone, please pick up your device before speaking. To exit the queue, you may press star then two. At this time, we will pause momentarily to assemble our roster. The first question this evening comes from Tobey Sommer with Truist. Please go ahead. Hey, good afternoon. This is Jasper Bibb for Tobey. Thanks for taking our questions. I just wanna ask about the margin guidance. Like, how would you frame your assumptions for 2023 with respect to office occupancy, business travel, and recruiting versus your pre-COVID rates? On a per employee basis, other operating expenses for 2023 looks pretty similar to 2019. Would you say you're effectively assuming things returning to normal there? Yes, we are. The guidance that we've provided around other operating and G&A costs here, as well as the structure, is what we think will return us to a normalized level in 2023. Thanks. Following up on that, could you comment on what you're seeing with respect to consultant compensation rates and the ability to pass those along in your realized rate gains? Yeah. We, you know, we are entering our period of time of doing our recognition and reward process that we do each year during the first quarter of the year. You know, we expect, just as we've seen, you know, that we're gonna have stronger pricing increases than we did a year ago, so that our realized rate will go up. We are expecting to deliver equal or thereabout, you know, growth in the, you know, compensation or raises in salaries for our consulting staff. Thanks. That makes sense. Last one for me. Are you seeing any impact from economic conditions on the proactive business at this point, where clients might be, you know, pulling back spend or maybe postponing some projects that have been in the pipeline? Yeah. Hi, Jasper. We're very attentive to, you know, looking for signs of impact to our client base. You know, as so far, you know, what we've found essentially is that the critical nature of our work to our clients' operations has really continued to support the demand across the business. You know what I mean by that, if you think about the elements that drive our proactive work, you know, innovation, it's the urgency of that next feature set in the electronics industry, or in the life sciences industry, that they've gotta get there for their next product launch if they wanna be able to compete, right? It's not so much about how many units they're selling, but it's about being able to get that new product out there performing reliably and safely. you know, we're, we are driven by transformation in industries in terms of product complexity. The regulatory frameworks continue to raise the bar on safety and on health. What we're seeing, you know, even if the clients are downsizing themselves, they still need to get their product through that regulatory framework, and that bar is going up. you know, same is true of our risk-related work on the proactive side. This is driven by climate change and extreme weather, and increased demand on a stressed power grid. These are things that have to be managed even, you know, whether we're in a recessionary environment or not. Do we see clients, you know, potentially tightening their belts, looking more closely at scopes? Of course, we're not completely immune to that. as we've seen historically, it really is the critical nature of our work, that allows us to, you know, see that continued demand and that strength in the demand. Appreciate the detail there. Thanks for taking the questions. You bet. The next question comes from Andrew Nicholas at William Blair. Please go ahead. Hi, good afternoon. Thanks for taking my questions. A really nice top-line guide, in what seems like it's all relative, but a normal year in 23, at least relative to the past several. I'm just wondering if this growth algorithm of, you know, 6%-8% headcount growth with 3%-4% price and kinda rolling that up into high single digit, low double digit top line growth, is that a good way for us to think about the business over the medium to long term now? Is that your expectation for growth, or are there unique things about 2023 specifically that would have it be higher or lower than that expectation? Yeah. Maybe I'll start off and respond to that quantitatively, and I think Catherine may wanna add in qualitatively about why we're confident in this. Look, I think we are overall believe that where we need to be is obviously the pull in the market needs to be there, that we are confident we can achieve over a long term. We think that is gonna come with growing that head count in that 6%-8% range, and, you know, at times, hopefully even striking above that. We do think that, you know, pricing will vary over time on the realized rate that we get out of that. You know, the realized rate has a lot to do with turnover and hiring rates and things of that type. We are, you know, will that always hover up near the four? No. I think it could be, you know, 2.5-3.5 would probably be a long-term normalized realization range. You know, I think we can be slightly above that, you know, or at the higher end of those ranges this year, and that's why we've provided that guidance around the 3%-4%. In the utilization area, we this year, we have, you know, the utilization flat to down. I think over the long term, we view that that utilization is actually gradually growing. You know, you're gonna have years of some fluctuation on that. As I stated, we think that the overall utilization where it might be, you know, approximately 73% this year, give or take, you know, over time, that's gonna move to the mid-70s and be sustained in that range. That's going to be, you know, even to a plus over a year period of time that we can hopefully achieve there. Overall, that's why we believe that it is something that we can get up performing around that, you know, double, you know, high single- to low double-digit mark and hopefully performing on the upper end of that. Yeah. Just to add on to that, Andrew, from the standpoint of the marketplace, right? You know, we've gotta have, of course, the work for all of those folks to do, and that comes across many different sectors of the economy, in terms of opportunity, right? It's industries and transformation that can create tremendous opportunity for us. Innovation creates opportunity. I mean, if you think about the macro trends like the energy transition that we are facing, you know, this is gonna drive engineering expectations to the limit. This is a place where Exponent thrives in understanding the behavior of these innovations across the product life cycle, whether that's proactive or whether that's reactive. You think about life sciences, you know, things like digital health, the emphasis on value demonstration with medicines and therapies. you know, You think about automated vehicles and electrification, right? The complexity associated with those innovations is going to continue to drive work to Exponent. You know, our job is to understand what's coming around the bend, position ourselves with the talent, with the capabilities, and with the relationships to win the business. I think the opportunity landscape absolutely supports the model that Rich is talking about over time in this sort of high single to low double-digit range. That's really helpful. Thank you. Then maybe just for my follow-up. You touched on it a couple times, Catherine, on kind of the digital health pharma space. I know it's a major growth focus for you and the organization as a whole. You've done a lot of hiring there over the past couple years. Can you just give a little bit more of a detailed update on how that's going? I think it's only a couple points as a percentage of revenue today, but you have ambitions for that to be much larger as a percentage of your revenue base. I was just wondering if you could give a more detailed update on that effort. Yeah. Yeah. Thank you for that question. You know, we continue to invest, as you mentioned, on the talent side, but also in the, you know, the building of the client relationships. Getting those relationships established so that we can be able to, you know, get those engagements started when the issues arise, and we are absolutely getting increased traction around that area. We have some public work that we're doing for the for the Centers for Disease Control around data and COVID vaccine efficacy and safety. There are some very tangible, and very forward-looking kinds of projects that we have won in that space. You're right, it is still a relatively small percentage of the portfolio. But I'm pleased with the progress. You know, look, this is a long-term opportunity, and we are in the investment phase, but we are seeing, some of those early returns, in terms of those, you know, those performance indicators. Very pleased to see that and we'll continue to report back on that. Thank you. You're welcome. Ladies and gentlemen, this concludes the question and answer session as well as today's presentation. Thank you all for your participation. You may now disconnect your lines.