Sequentially, orders declined 17.2%. Growth in demand in automotive/EV and back-end semi partially offset sequential declines in front-end semi, life sciences and other markets. The sequential decline in orders for the defense/aerospace and industrial markets were largely the result of tough comparators.
Backlog at March 31, 2024, was $55.5 million and included $22.8 million of backlog associated with the acquisition. Approximately 45% of the backlog is expected to ship beyond the second quarter of 2024.
Second Quarter and Full Year 2024 Outlook
Revenue for the second quarter of 2024 is expected to be in the range of $34 million to $36 million with gross margin in the range of approximately 44% to 45%.
Second quarter 2024 operating expenses, including amortization, are expected to run at approximately $14.5 million to $15 million, and reflect annual merit increases. Intangible asset amortization is expected to be approximately $1.5 million pre-tax, or approximately $1.2 million after tax. Interest expense is expected to be approximately $195,000 for the quarter.
Based on weighted average shares of 12.3 million, second quarter 2024 EPS is expected to be in the range of $0.00 to $0.06, while adjusted EPS (Non-GAAP) (1) is expected to be in the range of $0.10 to $0.16.
For the full year of 2024, including first quarter results, the Company expectations are now as follows:
(As of May 6, 2024) |
Current Guidance |
Previous Guidance |
Revenue |
$140 million to $150 million |
$145 million to $155 million |
Gross margin |
44% to 46% |
45% to 46% |
Operating expenses |
$56 million to $58 million |
$57 million to $59 million |
Intangible asset amort expense |
Approximately $5 million |
Approximately $4.0 million |
Intangible asset amort exp. After tax |
Approximately $4.1 million |
Approximately $3.5 million |
Effective tax rate |
17% to 19% |
18% to 20% |
Capital expenditures |
1% to 2% of sales |
1% to 2% of sales |
The foregoing guidance is based on management’s current views with respect to operating and market conditions and customers’ forecasts. It also assumes macroeconomic conditions remain unchanged through the end of the year. Actual results may differ materially from what is provided here today as a result of, among other things, the factors described under “Forward-Looking Statements” below. Further information about non-GAAP measures can be found under “Non-GAAP Financial Measures” and the reconciliations of GAAP financial measures to non-GAAP financial measures that accompany this press release.
Conference Call and Webcast
The Company will host a conference call and webcast today at 4:45 p.m. ET. During the conference call, management will review the financial and operating results and discuss inTEST’s corporate strategy and outlook. A question-and-answer session will follow. To listen to the live call, dial (201) 689-8263. In addition, the webcast and slide presentation may be found at intest.com/investor-relations.
A telephonic replay will be available from 9:00 p.m. ET on the day of the call through Monday, May 13, 2024. To listen to the archived call, dial (412) 317-6671 and enter replay pin number 13745674. The webcast replay can be accessed via the investor relations section of intest.com, where a transcript will also be posted once available.
About inTEST Corporation
inTEST Corporation is a global supplier of innovative test and process technology solutions for use in manufacturing and testing in key target markets including automotive/EV, defense/aerospace, industrial, life sciences, and security, as well as both the front-end and back-end of the semiconductor manufacturing industry. Backed by decades of engineering expertise and a culture of operational excellence, inTEST solves difficult thermal, mechanical, and electronic challenges for customers worldwide while generating strong cash flow and profits. inTEST’s strategy leverages these strengths to grow organically and with acquisitions through the addition of innovative technologies, deeper and broader geographic reach, and market expansion. For more information, visit www.intest.com.
Non-GAAP Financial Measures and Forward-Looking Non-GAAP Financial Measures
In addition to disclosing results that are determined in accordance with generally accepted accounting practices in the United States (“GAAP”), we also disclose non-GAAP financial measures. These non-GAAP financial measures consist of adjusted net earnings, adjusted earnings per diluted share (adjusted EPS), adjusted EBITDA, and adjusted EBITDA margin.
Definition of Non-GAAP Measures
The Company defines these non-GAAP measures as follows:
- Adjusted net earnings is derived by adding acquired intangible amortization, adjusted for the related income tax expense (benefit), to net earnings.
- Adjusted earnings per diluted share (adjusted EPS) is derived by dividing adjusted net earnings by diluted weighted average shares outstanding.
- Adjusted EBITDA is derived by adding acquired intangible amortization, net interest expense, income tax expense, depreciation, and stock-based compensation expense to net earnings.
- Adjusted EBITDA margin is derived by dividing adjusted EBITDA by revenue.
These results are provided as a complement to the results provided in accordance with GAAP. Adjusted net earnings and adjusted earnings per diluted share (adjusted EPS) are non-GAAP financial measures presented to provide investors with meaningful, supplemental information regarding our baseline performance before acquired intangible amortization charges as management believes this expense may not be indicative of our underlying operating performance. Adjusted EBITDA and adjusted EBITDA margin are non-GAAP financial measures presented primarily as a measure of liquidity as they exclude non-cash charges for acquired intangible amortization, depreciation and stock-based compensation. In addition, adjusted EBITDA and adjusted EBITDA margin also exclude the impact of interest income or expense and income tax expense or benefit, as management believes these expenses may not be indicative of our underlying operating performance.
