inTEST (INTT) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue was $30.3 million, down 2% year-over-year, with $5.4 million contributed by Alfamation and strong performance in diversified markets offsetting semiconductor market weakness.

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

• Orders and backlog improved year-over-year, with orders up 5% and backlog at $45.5 million, 42% of which is expected to ship after Q4.

• Net earnings for Q3 were $0.5 million ($0.04 per diluted share); adjusted net earnings were $1.2 million ($0.10 per diluted share).

• Alfamation integration is progressing, driving product and technology synergies and expanding presence in auto/EV and life sciences markets.

Financial highlights

• Q3 2024 revenue: $30.3 million, down from $31.0 million in Q3 2023; gross margin: 46.3%; operating income: $0.5 million (1.6% margin); adjusted EBITDA: $2.4 million (8.1% margin).

• Cash and equivalents at quarter end: $18 million; total debt: $16.1 million; free cash flow for Q3: $3.7 million.

• Generated $4.2 million in operating cash flow; repaid $5.3 million in debt and repurchased 141,117 shares for $1 million.

• Operating expenses increased year-over-year mainly due to Alfamation, but were flat sequentially due to cost controls.

• Working capital at September 30, 2024 was $45.3 million.

Outlook and guidance

• Q4 2024 revenue guidance: $34–$37 million; full-year 2024 revenue guidance: $128–$131 million; gross margin expected at 42–43%.

• Q4 EPS and adjusted EPS expected at $0.08 and $0.14, respectively.

• Operating expenses for 2024 projected at $53 million; effective tax rate for 2024 expected at 17–19%.

• Capital expenditures for 2024 projected at 1–2% of sales.

• Management expects current cash, borrowing capacity, and operating cash flow to be sufficient for short-term needs.