inTEST (US:INTT)2020-11-10 18:34Financial Data and Key Metrics Changes - The company reported consolidated revenues of $14.4 million for Q3 2020, a 9% increase sequentially, driven by thermal-related components in the semiconductor market [16][36] - Gross margin for Q3 was 45%, slightly below guidance and down from 46% in Q2, primarily due to increased component material costs [36] - Net earnings for Q3 were $458,000 or $0.04 per diluted share, compared to $170,000 or $0.02 per diluted share in Q2 [39] Business Line Data and Key Metrics Changes - Thermal segment bookings increased 5% to $11 million in Q3, with net revenues rising 13% to $10.7 million [19] - EMS segment bookings were approximately flat at $3.4 million, with revenues marginally down 2% to $3.7 million [22] - Service revenues exceeded $1.6 million in Q3, marking a 22% sequential increase [14] Market Data and Key Metrics Changes - Consolidated bookings for Q3 were $14.4 million, with multimarket and semiconductor markets each contributing $7.2 million [16] - Semi revenues increased 8% sequentially to $7.4 million, while multimarket revenues rose 10% to $7 million [17] Company Strategy and Development Direction - The company is focusing on diversifying its business by entering markets outside the semiconductor sector, particularly in the electric vehicle (EV) market [20][26] - A strategic planning exercise was initiated to define the company's direction and initiatives for the next five years [34] - The company is exploring opportunities for standardizing products to improve scalability and reduce costs [28][29] Management's Comments on Operating Environment and Future Outlook - Management noted improving conditions in the markets served, with order flow strengthening despite ongoing COVID-19 challenges [16] - The company is addressing operational challenges related to its US-centric manufacturing approach and is considering both organic and inorganic growth strategies [30][70] - Future guidance for Q4 expects net revenues between $14 million and $15 million, with potential nonrecurring costs due to restructuring [43][44] Other Important Information - The company is experiencing a cash flow increase, with cash and cash equivalents growing by $2.1 million sequentially to $9.5 million [41] - Inventory declined by 13% sequentially to $6.9 million, driven by shipments during the quarter [42] - The company plans to consolidate its EMS operations, which will involve moving manufacturing from California to New Jersey [45] Q&A Session Summary Question: What is the order momentum in Q4? - Management confirmed that order patterns have improved and trends have continued positively into October and November [52] Question: What success is being seen in the EV market? - The company has partnered early with major players in the EV space, developing robust solutions for their production needs [54] Question: Are there any supply constraints expected? - Currently, there are no supply chain challenges, and the consolidation move has been accounted for in Q4 guidance [55] Question: What are the plans for product standardization? - The company is focusing on late-stage customization while leveraging standard components to improve efficiency [59] Question: Is there a strategy for offshoring manufacturing? - The company is evaluating whether to establish a presence in large global markets through organic or inorganic means [70]