Intest Crop ((INTT)) has held its Q1 earnings call. Read on for the main highlights of the call.
InTest Corp’s recent earnings call presented a mixed sentiment, reflecting both optimism and caution. The company showcased strong cash generation and growth in emerging markets like auto/EV and life sciences. However, these positive aspects were tempered by revenue declines in key segments, engineering delays, and significant market uncertainties due to tariffs. While proactive measures to manage costs and debt were highlighted, the challenges in the external environment and operational issues contributed to a balanced sentiment overall.
Revenue and Gross Margin Performance
InTest Corp reported $26.6 million in revenue with gross margins of 41.5% for the first quarter. The company successfully generated over $5 million in cash and reduced its debt by more than $3 million, showcasing its financial resilience amidst challenging conditions.
Growth in Auto/EV and Life Sciences
The earnings call highlighted notable growth in the auto/EV and life sciences sectors. Sales to the auto/EV market increased by $2 million, while life sciences saw a $1 million rise. Other markets also experienced a $1.3 million year-over-year growth, indicating a strategic focus on these expanding sectors.
Strong Cash Position
InTest Corp’s strong cash position was a focal point, with $5.5 million generated from operations. The company’s cash and equivalents at the end of the first quarter stood at $22 million, marking an 11% increase from the previous quarter, underscoring its robust financial health.
Orders and Backlog
The company experienced an 11% year-over-year increase in first-quarter orders, driven by a significant 47% rise in industrial demand. A notable $1.5 million order from a returning customer contributed to this growth, reflecting confidence in InTest’s offerings.
Revenue Decline in Key Segments
Despite growth in certain areas, InTest faced a sequential revenue decline of $10 million. This included a $6 million reduction in the semiconductor sector and a $1.2 million decline in the industrial market, highlighting challenges in these key segments.
Engineering Delays
Engineering challenges in the Environmental Technologies division led to approximately $1.5 million of shipments being deferred, impacting the quarter’s performance and highlighting operational hurdles that need addressing.
Net Loss and Adjusted EBITDA
The company reported a net loss of $2.3 million, or $0.19 per diluted share, with adjusted EBITDA for the first quarter being negative $900,000. These figures underscore the financial pressures faced during this period.
Tariff and Market Uncertainty
Significant uncertainty in the global trade environment and tariffs have impacted customer spending and shipment delivery schedules, presenting ongoing challenges for InTest Corp in navigating these external factors.
Forward-Looking Guidance
Looking ahead, InTest Corp anticipates revenue for the second quarter to be between $27 million and $29 million, with a projected gross margin of approximately 42%. The company continues to implement cost-control measures and leverage government programs to mitigate market conditions, while expecting continued demand growth in the auto/EV and industrial sectors.
In summary, InTest Corp’s earnings call reflected a balanced sentiment, with strong cash generation and growth in specific markets juxtaposed against revenue declines and market uncertainties. The company’s proactive cost management and strategic focus on emerging sectors provide a foundation for cautious optimism moving forward.