inTEST (US:INTT)2025-05-02 13:32Financial Data and Key Metrics Changes - Revenue for Q1 2025 was $26.6 million, down $3.2 million compared to Q1 2024, primarily due to a $6 million reduction in semiconductor sales and a $1.2 million decline in the industrial market [7][22] - Gross profit for Q1 2025 was $11.1 million, a decrease of $2 million year-over-year, with a gross margin of 41.5%, tightening by 230 basis points compared to the prior year [22][23] - The net loss for the quarter was $2.3 million, or a loss of $0.19 per diluted share, while adjusted net loss was $1.4 million, or a loss of $0.11 per diluted share [25] Business Line Data and Key Metrics Changes - Sales to the auto EV sector increased by $2 million, life sciences by $1 million, and other markets by $1.3 million, partially offsetting declines in semiconductor and industrial sales [10][22] - Industrial orders grew 47% year-over-year to $4.6 million, driven by a significant order from a returning customer [18] - Semiconductor orders declined by $6 million, reflecting tempered demand in the electronic test division [19] Market Data and Key Metrics Changes - Backlog as of March 31 was $38.2 million, including $5.8 million from affirmation, down $17.2 million from the prior year [21] - Over half of the company's sales are associated with products made in the U.S. and sold to U.S. customers, or products sold to global customers from international sites not currently impacted by tariffs [15] Company Strategy and Development Direction - The company is focusing on market diversification, innovation, and investment in regional manufacturing facilities to navigate geopolitical tensions and trade policy volatility [31][33] - Plans to begin manufacturing in Malaysia during the second half of 2025 are on schedule, which is expected to enhance competitiveness and reduce costs [32][33] - The Vision 02/1930 growth strategy aims to increase the proportion of new products in total sales from 17% to 25% in the coming years [32] Management's Comments on Operating Environment and Future Outlook - Management noted that the first quarter was marked by shifting tariff policies and macroeconomic turmoil, creating a challenging environment for global companies [7][31] - The company remains optimistic about its customer pipeline, which is at an all-time high, and anticipates sequential improvement in top-line and profitability through the year [29][31] - Visibility into the timing of orders and shipments remains limited due to ongoing tariff uncertainties [28][29] Other Important Information - The company generated $5.5 million in cash from operations during the quarter and reduced total debt by $3.2 million [26][27] - Operating expenses for Q1 2025 were $13.9 million, up $1.3 million year-over-year, including restructuring costs and incremental expenses related to the acquisition of Alphamation [23][24] Q&A Session Summary Question: When did visibility get cloudier in the second half? - Management noted that customer slowdown in order bookings began mid-quarter, which affected guidance [36][37] Question: What are the potential swing factors for revenue? - Management identified semiconductor and auto sectors as the biggest potential swing factors, with a healthy pipeline for both industries [38][39] Question: What is the breakeven quarterly revenue level now? - Management indicated that the breakeven point is being adjusted downwards, with a typical range around $30 million [40][41] Question: Can you quantify the customer pipeline? - Management refrained from providing specific numbers but confirmed that the opportunity funnel is at a historic peak [53][54]