inTEST (US:INTT)2024-11-06 21:20Revenue Performance - The company reported total revenue of $30,272 million for the three months ended September 30, 2024, a decrease of 2.2% compared to $30,941 million in the same period of 2023[166]. - Revenue from the semiconductor market was $11,410 million, representing a significant decline of 38.2% from $18,476 million in the prior year[166]. - The automotive/electric vehicle segment saw a remarkable increase in revenue to $6,250 million, up 252.1% from $1,775 million year-over-year[166]. - The industrial segment revenue increased by 43.9% to $3,534 million compared to $2,456 million in the same quarter last year[166]. - Life sciences revenue remained relatively stable at $1,322 million, a slight decrease of 0.6% from $1,330 million in the previous year[166]. - Consolidated revenue for the nine months ended September 30, 2024, was $94.1 million, a decrease of $1.3 million compared to $95.4 million for the same period in 2023[168]. - Revenue for Q3 2024 was $30.3 million, a decrease of 2% from $30.9 million in Q3 2023, with $5.4 million attributed to the acquisition of Alfamation[182]. - Revenue for the nine months ended September 30, 2024 was $94.1 million, a decrease of 1% from $95.4 million in the same period in 2023, with Alfamation contributing $16.5 million[188]. Acquisitions and Market Strategy - The company completed the acquisition of Alfamation for approximately $21.9 million, which includes $19.7 million in cash and $2.1 million in stock[164]. - The acquisition of Alfamation is expected to enhance the company's capabilities in the automotive and life sciences markets[164]. - The company aims to diversify its market presence beyond the semiconductor automated test equipment market to reduce dependence on cyclical market trends[156]. - The company is focused on expanding its presence in key target markets such as automotive, defense/aerospace, industrial, life sciences, and security, which are generally less cyclical than the semiconductor market[162]. - The company is pursuing acquisition opportunities for complementary businesses, technologies, or products as part of its growth strategy[206]. - During the nine months ended September 30, 2024, the company paid $18.7 million in net cash for the acquisition of Alfamation[208]. Orders and Backlog - Orders for the nine months ended September 30, 2024, totaled $77.0 million, down from $89.1 million in the same period in 2023, with a significant decline in the semi market orders[173]. - Backlog of unfilled orders as of September 30, 2024, was approximately $45.5 million, an increase from $40.5 million at the same time in 2023[175]. - Alfamation contributed $5.4 million in revenue for Q3 2024 and $16.5 million from the date of acquisition through September 30, 2024, primarily from the auto/EV market[168]. - Orders from the auto/EV market increased by 90.0% to $15.9 million for the nine months ended September 30, 2024, compared to $8.4 million in the same period in 2023[173]. Supply Chain and Operational Challenges - The company is facing supply chain challenges due to geopolitical conflicts, including the Israel-Hamas war and the war in Ukraine, which may impact future operations[176][177]. - The company maintains a safety stock of two-to-three months for critical components sourced from a sole supplier in Israel[176]. - The company is actively qualifying alternate suppliers to mitigate supply chain risks and expects to complete evaluations by Q1 2025[177]. Financial Metrics and Expenses - Gross margin for Q3 2024 was 46%, down from 47% in Q3 2023, primarily due to higher fixed operating costs and increased direct labor from Alfamation[183]. - Engineering and product development expense increased by 21% to $2.2 million in Q3 2024, reflecting additional costs from Alfamation[185]. - General and administrative expense rose by 20% to $7.1 million in Q3 2024, with Alfamation accounting for approximately $1.7 million of this expense[186]. - Gross margin for the nine months ended September 30, 2024 was 44%, down from 47% in the same period in 2023, due to higher fixed operating costs and direct labor from Alfamation[189]. - General and administrative expense for the nine months ended September 30, 2024 increased by 26% to $20.2 million, with Alfamation contributing approximately $3.8 million[192]. Cash and Debt Management - As of September 30, 2024, cash and cash equivalents were $17.97 million, down from $45.26 million at December 31, 2023[204]. - The company anticipates that cash and cash equivalents, along with borrowing capacity under the Revolving Facility, will be sufficient to support short-term working capital requirements[205]. - The company repaid $5.5 million of long-term debt and $1.9 million of short-term debt during the nine months ended September 30, 2024[209]. - The company used $1.0 million to repurchase stock in the same period[209]. Accounting and Reporting - There have been no significant changes to the critical accounting estimates as of September 30, 2024[210]. - No off-balance sheet arrangements were reported during the three months ended September 30, 2024[211].