inTEST (INTT) 2024 Southwest IDEAS Conference summary

Strategic transformation and growth initiatives

• Executed a five-point growth strategy focused on innovation, market diversification, global expansion, and strategic acquisitions, transitioning from a components supplier to a diversified solutions provider targeting auto/EV, defense/aerospace, life sciences, and industrial sectors.

• Completed four acquisitions since launching the strategy, including Alphamation in Italy in March 2024, expanding the European footprint and deepening presence in auto/EV, life sciences, and consumer electronics.

• Restructured into three technology divisions: electronic test, environmental technologies, and process technologies, each supporting automation, green energy, and safety applications.

• Diversification reduced semiconductor exposure from over 65% to 39% of revenue, with growth in auto, industrial, and defense sectors.

• Ongoing focus on recurring revenue streams, talent development, and cross-division technology leverage, with optimization of channel partners and market reach.

Financial performance and outlook

• Q3 2024 revenue was $30.3 million, with a year-over-year decrease of $0.7 million, but diversification progress continues as auto/EV and industrial markets offset declines in semiconductors.

• Gross margin in Q3 2024 expanded to 46.3%, up 570 basis points sequentially, driven by favorable product mix and cost actions.

• Adjusted EBITDA for Q3 was $2.4 million with an 8.1% margin; adjusted EPS at $0.10; free cash flow just under $4 million; $5 million in short-term debt repaid.

• Full-year 2024 revenue guidance is $128–$131 million, with Q4 revenue expected at $34–$37 million and gross margin of 42–43%.

• Approximately $58 million in liquidity at quarter end, including $18 million in cash and $40 million in borrowing capacity.

Market focus and competitive positioning

• Serves a blue-chip global customer base across semiconductor, industrial, auto/EV, defense/aerospace, life sciences, and consumer electronics markets.

• Auto EV, aerospace/defense, and green industrial markets identified as key growth areas, with strong growth in auto/EV and defense/life sciences.

• Testing solutions described as highly sticky, with long-term customer relationships and high switching barriers.

• Key competitors in various divisions include Teradyne, Advantest, Park-Ohio, esmo, and MPI.

• M&A remains a core competency, with a $30 million acquisition facility available for future deals.