inTEST (US:INTT)2022-11-04 14:07Financial Data and Key Metrics Changes - Revenue for Q3 2022 was $30.8 million, a 46% increase year-over-year, with organic growth at 23% [9][15] - Gross margins were 45.2%, reflecting operational inefficiencies and material cost headwinds [18] - GAAP net earnings were $2.5 million or $0.23 per diluted share, with adjusted non-GAAP EPS at $0.28 per share [21][22] - Cash from operations generated was $1.4 million for the quarter, with liquidity standing at approximately $52 million [25][24] Business Line Data and Key Metrics Changes - Sales to the front-end semiconductor market more than doubled year-over-year, particularly in silicon carbide applications [11] - Back-end semiconductor sales increased by 17% year-over-year and 23% sequentially [12] - The EV market showed positive growth, with significant contributions from both organic and acquired businesses [13] Market Data and Key Metrics Changes - Orders for the quarter were up 55% to $32.7 million, with strong demand across semi, defense, security, and life sciences markets [28] - Orders in the semiconductor market increased by 44% year-over-year, with back-end orders achieving 27% growth [29] Company Strategy and Development Direction - The company is focused on executing its 5-Point Strategy to drive growth in target markets and expand its customer base [8][9] - Acquisitions are a key part of the long-term strategy, with an active pipeline of opportunities [36] - The company aims to double its size by 2025 through strategic execution and market expansion [36] Management's Comments on Operating Environment and Future Outlook - Management noted that supply chain challenges impacted Q3 revenue by approximately $1 million, but the team has shown resilience [17] - The company expects Q4 revenue to be in the range of $30 million to $32 million, with gross margins around 45% [32][35] - The backlog reached a record of $47.9 million, with expectations to convert approximately 55% to sales in Q4 [13][31] Other Important Information - The company has expanded its term loan facility by $25.5 million, enhancing financial flexibility [23] - Capital expenditures for the year are expected to be about $1.5 million, up from $600,000 in the previous year [26] Q&A Session Summary Question: Backlog growth and market mix - The backlog mix is similar to Q3 results, indicating strong visibility for Q4 [42][43] Question: Customer engagement and new customers - The company is expanding its customer base through both legacy accounts and new market opportunities [45][46] Question: Gross margin dynamics - The decline in gross margin is attributed to product mix, customer mix, supply chain issues, and foreign exchange impacts [47][48] Question: Service and support monetization - The company is making progress with master service agreements, generating over $1 million in service revenue [61] Question: Cash generation and working capital - Cash from operations is expected to continue positively, with inventory management improving [65][68]