inTEST (US:INTT)2021-11-05 19:13Financial Data and Key Metrics Changes - The company achieved year-over-year net revenue growth of 46% to $21.1 million, driven by strong global demand for semiconductors and recovery in industrial sectors [8][26] - Gross margin for the third quarter was 49.2%, compared to 50.2% in the second quarter of 2021 and 44.7% a year ago, reflecting higher component material costs and changes in product mix [28] - Net earnings for the third quarter were $2.2 million or $0.20 per diluted share, compared to $2.6 million or $0.24 per diluted share in the second quarter [33] Business Line Data and Key Metrics Changes - Multimarket revenue grew 22% sequentially, fueled by strength in the industrial market, while the semiconductor business remained at historically high levels despite a sequential dip [26][27] - The company generated $4.3 million of cash from operations in the third quarter, increasing the year-to-date total cash generated to $8.1 million [10][37] Market Data and Key Metrics Changes - Orders for the third quarter were $21.1 million, a 47% increase over the same period last year, supported by growth in both Multimarket and Semiconductor markets [41] - The backlog at quarter-end was $20.4 million, with approximately 75% expected to convert to sales in the fourth quarter [44] Company Strategy and Development Direction - The company is focused on a five-point strategy aimed at driving growth, diversifying markets, and ensuring the right talent is in place [7] - Recent acquisitions, Z-Sciences and Videology, are intended to enhance product offerings and expand into high-growth markets, particularly in Life Sciences [11][15][24] Management's Comments on Operating Environment and Future Outlook - Management acknowledged ongoing supply chain constraints and inflationary pressures but expressed confidence in the company's ability to manage these challenges [8][29] - The company expects revenue for the fourth quarter to be in the range of $21.5 to $22.5 million, with gross margins expected to be consistent with the third quarter [46] Other Important Information - The company executed a new five-year credit agreement, providing additional liquidity to pursue acquisition opportunities [36] - The total addressable market for Z-Sciences is approximately $200 million, while the market for Videology is estimated at over $20 billion [93] Q&A Session Summary Question: Does Q4 guidance assume the ability to ship all demand? - Management confirmed that Q4 guidance accounts for potential supply chain constraints [55][56] Question: What revenue contribution is expected from the acquisitions? - The expected revenue contribution from the combined acquisitions in Q4 is around $1.5 million, with Z-Sciences having minimal revenue initially [57] Question: How is the marketing campaign for Multimarket performing? - The campaign has generated a strong level of qualified leads and is currently in the application testing phase with potential customers [63] Question: What is the outlook for the Semiconductor business? - Management is bullish on the Semiconductor sector, citing positive trends and increased customer engagement [65] Question: What is the go-to-market strategy for Life Sciences? - The strategy involves leveraging existing distributor networks and adding direct sales channels to enhance market presence [72] Question: What is the expected operating expense range for Q4? - Expected operating expenses are projected to be in the range of $9 million to $9.2 million, with additional costs related to acquisitions [78] Question: What is the liquidity position at year-end? - The company anticipates approximately $40 million in liquidity exiting the year, factoring in cash and available credit [82]