Exponent (consulting firm)

Exponent (NASDAQ: EXPO) is an American engineering and scientific consulting firm that provides solutions to complex technical problems. Exponent has a multidisciplinary team of scientists, physicians, engineers, and business consultants which performs in-depth research and analysis in more than 90 technical disciplines. The company operates 20 offices in the United States and 5 offices overseas. Until 1998, it was known as Failure Analysis Associates and its holding company, The Failure Group, Inc., was traded as the symbol FAIL. It was founded in 1967 by five PhD level researchers from Stanford University and today employs over 900 people, including more than 400 PhD's and MD's. Although the company is mostly recognized for their roles in major accident investigations and failure analysis, the firm also provides a variety of engineering, environmental, health science and economics consulting services.

Stock price

Over the course of 5 years ( From Aug. 28, 2009 to Aug. 21 2014) the stock price has risen over 51 dollars. Since going public in 1990 at $7.25 per share, it is now worth over 10 times this original IPO. This stock has had no major drops, this includes the 2008 stock market crash.

History

Founding and Leadership

Failure Analysis Associates (FaAA) was founded in April 1967 by then Stanford University Professor Alan Stephen Tetelman along with his colleagues Drs. Bernard Ross, Marsh Pound, John Shyne and Sathya V. Hanagud with $500 in capital.^[1][2][3]

At the time of FaAA's founding, Dr. Ross was also an engineering program manager at SRI International (then the Stanford Research Institute) (1965–1970).^[4] While en route to the site of a Navy jet crash investigation, Dr. Tetelman lost his life on September 25, 1978 in the PSA Flight 182 air crash over San Diego between a PSA jet liner and a private Cessna airplane that claimed the lives of 144 people. He was forty-two years old.^[5]

Dr. Ross assumed the presidency of Failure Analysis Associates after the accident.^[3] Dr. Ross and the late Dr. Tetelman were featured in a documentary film about the company titled "What Went Wrong" made by the United States Information Service and distributed worldwide.^[6][7] Dr. Tetelman was a world renowned expert in fracture mechanics and co-authored a textbook titled "The Principles of Engineering Materials" with Dr. Craig R. Barrett (former CEO of Intel) and Stanford professor, William D. Nix, published by Prentice-Hall in 1973.^[5][8]

In 1982, Dr. Roger McCarthy assumed the leadership of FaAA, becoming Chief Executive Officer in 1982 until 1996, and Chairman of the Board in 1986 until 2005. Dr. McCarthy joined FaAA in 1978 and became a Director and Vice-President in 1980. In 2004 Dr. McCarthy was elected to the National Academy of Engineering.^[9]

Mr. Michael R. Gaulke served as the Chief Executive Officer of Exponent Inc. from June 1996 to May 28, 2009. Mr. Gaulke served as President of Exponent Inc. from March 1993 to May 22, 2007. Mr. Gaulke first joined Exponent Inc. in September 1992 and served as its Executive Vice President and Chief Financial Officer. In 2008, Oregon State University inducted Mr. Gaulke into its Engineering Hall of Fame.^[10]

Dr. Paul R. Johnston has been the Chief Executive Officer at Exponent Inc. since May 28, 2009. Dr. Johnston has been President of Exponent Inc. since May 22, 2007 and served as its Chief Operating Officer from July 14, 2003 to May 28, 2009. Dr. Johnston joined Exponent in 1981 and served as its Principal Engineer since 1987 and Vice President since 1996.^[11] Dr. Johnston has co-authored a book titled "Structural Dynamics by Finite Elements" published by Prentice-Hall in 1987.^[12]

Incorporation

Failure Analysis Associates was founded as a partnership, incorporated in 1968 in California and reincorporated in Delaware as Failure Analysis Associates, Inc. in 1988. In 1989, Dr. McCarthy reincorporated Failure Analysis Associates, Inc. in Delaware under a holding company, The Failure Group, Inc. and took The Failure Group, Inc. public in 1990. The company changed its name to Exponent, Inc. in 1998.^[9][13]

Company activities

Exponent has been involved in the investigations of many well known incidents including the now debunked report aired on Dateline in 1993 about fires and explosions involving sidesaddle fuel tanks on Chevrolet C/K trucks, the disputed Consumer Reports finding on Suzuki roll-over safety,^[14] the 2009–2010 Toyota vehicle recalls, the crash of American Airlines Flight 587 among many other aviation accidents, and the Exxon Valdez oil spill.^[15] The Federal Emergency Management Agency also hired Exponent to examine the Oklahoma City bombing damage aftermath, specifically the damage to the Alfred P. Murrah Federal Building.^[15] NASA hired Exponent in 1986 to determine the causes of the Space Shuttle Challenger disaster. In 2003, Exponent was hired by the U.S. government to investigate the Space Shuttle Columbia disaster.^[16]

Exponent has ISO 9001 accreditation, indicating independently audited and certified quality management practices. The company also is certified for battery, energy storage and compliance testing.^[17]

Questioned neutrality

The quality and neutrality of reports produced by the company has been called into question on various controversial topics. Common points of critique include corporate denialism and that, for industrial clients, only favorable reports are seemingly produced. Among other, Exponent has argued for that dioxins and passive smoking do not cause cancer.

According to the Los Angeles Times, "Exponent's research has come under fire from critics, including engineers, attorneys and academics who say the company tends to deliver to clients the reports they need to mount a public defense."^[15] Exponent's executive chairman responded that such criticism is a "cheap shot", responding "Do we tell our clients a lot of what they don't want to hear? Absolutely." but that they also often come up with results not favoring their clients. No concrete examples were however provides for the paper. In 2009, the Amazon Defense Coalition criticized an Exponent study commissioned by the energy company Chevron that dumping oil waste didn't cause cancer because Chevron's largest shareholder was a director on Exponent's board.^[16] The firm was also criticized for assisting industry efforts to reduce chromium regulation.^[18]

Notable Projects

Partial listing of notable projects:

Research areas

Exponent's services are concentrated on multiple practices and centers, including:^[17]

References

External links

• Official website