Release Date: May 02, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• inTest Corp (INTT) delivered $26.6 million in revenue with a gross margin of 41.5%, generating over $5 million in cash and reducing debt by more than $3 million.
• The company saw increased sales in the Auto EV, Life Sciences, and other markets, which partially offset declines in the semiconductor and industrial sectors.
• inTest Corp (INTT) implemented tight cost controls, eliminated discretionary spending, and restricted hiring to improve profitability.
• The company continued to gain traction with new products, added new customers, and enhanced its market channels.
• inTest Corp (INTT) has a strong cash position with $22 million in cash and equivalents, and sufficient liquidity with available credit facilities.

Negative Points

• Sales were impacted by delays in customer spending and engineering challenges, pushing approximately $1.5 million of shipments out of the quarter.
• Revenue was down $3.2 million compared to Q1 2024, with significant declines in the semiconductor and industrial markets.
• Gross profit decreased by $2 million year-over-year due to lower sales volume and an unfavorable mix.
• Operating expenses increased by $1.3 million year-over-year, including restructuring costs and incremental expenses from acquisitions.
• The company faces significant uncertainty due to the global trade environment and tariffs, impacting order visibility and customer shipment schedules.

Q & A Highlights

• Warning! GuruFocus has detected 7 Warning Signs with INTT.

Q: When did visibility get cloudier for the second half, given the reaffirmation of full-year guidance at the end of March? A: (Nick Grant, CEO) We started to see a slowdown in customer orders and book-ship business mid-quarter. This led us to adjust our guidance to 27 to 29 million, which we would have met if not for engineering challenges. The slowdown and order pushouts were known by mid-quarter, affecting our larger customers.

Q: What are the potential swing factors for the full year, given the lack of full-year guidance? A: (Nick Grant, CEO) The semiconductor and AEV markets are the biggest potential swing factors. Our pipeline is healthy, and we are optimistic that once customers are comfortable with tariff directions, orders will resume. Last year showed improving market conditions, particularly in the semiconductor back end.

Q: With the cost-cutting initiatives, what is the break-even quarterly revenue level with the new cost structure? A: (Duncan Gilmore, CFO) Revenue contribution is strong, and we are reducing spending. For Q2, we expect revenue in the 27 to 29 million range, which is closer to break-even but not quite there. Historically, the break-even point was around 30 million, but we are bringing that down slightly.

Q: Can you provide more details on the $1.5 million order from a returning industrial customer? A: (Nick Grant, CEO) The order is from the utility space, specifically for induction heating systems used in manufacturing utility poles. The customer expanded their capacity at a new site, leading to this larger order.

Q: Were the engineering delays related to new product introductions or existing products? A: (Nick Grant, CEO) The delays were with new, complex chillers and chambers for both existing and new customers. The engineering team faced challenges with a few products, causing delays. However, these issues are resolved, and the products are expected to ship in the coming weeks.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.