Intest Crop ((INTT)) has held its Q4 earnings call. Read on for the main highlights of the call.
The recent earnings call for Intest Corp paints a picture of a company navigating through a landscape of both growth and challenges. The sentiment was generally positive, with notable revenue and order intake increases, primarily fueled by strategic acquisitions and targeted market demand. However, the company faces hurdles such as declining sales in the semiconductor and industrial sectors, pressures on gross margins, and uncertainties related to tariffs. The outlook for 2025 is cautious, reflecting these challenges.
Record Fourth Quarter Revenue
Intest Corp achieved a record-breaking fourth-quarter revenue of $36.6 million, contributing to a full-year revenue of $130.7 million. This marks the third consecutive year of record revenue for the company, showcasing its ability to generate consistent growth despite market challenges.
Consistent Sales Growth
The company reported a full-year sales growth of 6%, significantly bolstered by a $25 million contribution from the AlfaMation acquisition. Strong demand in the auto EV, defense, aerospace, and life sciences markets also played a crucial role in this growth.
Strong Order Growth
Intest Corp experienced an 11% increase in fourth-quarter orders year over year, with notable demand in the Auto EV and life sciences sectors. This growth in orders underscores the company’s strong market position and demand for its offerings.
Positive Cash Flow and Debt Management
The company generated $2.6 million in operating cash during the quarter, with a free cash flow of $2.4 million. It ended the quarter with $19.8 million in cash and equivalents and successfully repaid approximately $1.1 million of debt, highlighting effective cash and debt management strategies.
Decline in Semi and Industrial Sales
Intest Corp faced a 26% decline in semiconductor sales and a $3.7 million decrease in industrial sales, attributed to market softness and project timing issues. These declines represent significant challenges for the company moving forward.
Gross Margin Decline
The gross margin for the fourth quarter was 39.7%, reflecting a contraction of 660 basis points sequentially and 490 basis points year over year. This decline was impacted by a $1.6 million inventory step-up charge, posing a challenge to profitability.
Challenges with Tariffs and Market Uncertainty
The company is facing uncertainties related to tariffs and market competitiveness, which could affect customer investment and supply chain costs. These factors contribute to the cautious outlook for future growth.
Cautious 2025 Outlook
Intest Corp provided a cautious revenue outlook for 2025, expecting revenue between $125 million and $135 million. This forecast reflects market uncertainties and customer push-outs. The company remains optimistic about gradual profitability improvements through diversification and operational efficiencies.
In summary, Intest Corp’s earnings call reveals a company experiencing robust growth driven by strategic acquisitions and market demand, yet grappling with challenges in certain sectors and external market uncertainties. The cautious outlook for 2025 underscores the need for strategic navigation in a complex market environment.