8-K: inTEST Corp. Delays Earnings Release, Provides Preliminary Q4 Results and 2024 Guidance

inTEST Corporation announced a delay in its Q4 and full-year 2023 earnings release, while also providing preliminary Q4 results and 2024 financial guidance.

Summary

• inTEST Corporation has delayed its fourth quarter and full year 2023 earnings release and investor conference call, which was previously scheduled for March 1, 2024.
• The delay is due to the company requiring additional time to complete the year-end audit and review process.
• The company expects to report its results coincident with, or prior to, the filing of its Annual Report on Form 10-K for the year ended December 31, 2023.
• Preliminary fourth quarter 2023 revenue was approximately $28.4 million with net earnings of approximately $1.7 million, or $0.14 per diluted share.
• Cash generated from operations in the fourth quarter was $4.7 million.
• Orders in the fourth quarter were $27.5 million.
• First quarter 2024 revenue is expected to be in the range of $28 million to $30 million with gross margin of approximately 46%.
• First quarter 2024 earnings per diluted share is expected to be in the range of $0.08 to $0.13.
• Revenue for full year 2024 is expected to be in the range of $125 million to $130 million.

Sentiment

Score: 5

Explanation: The sentiment is neutral. While the preliminary results and guidance are positive, the delay in the earnings release and the unaudited nature of the results introduce uncertainty.

Positives

• The company generated $4.7 million in cash from operations in the fourth quarter.
• The company provided revenue and earnings guidance for the first quarter and full year of 2024.

Negatives

• The company has delayed its fourth quarter and full year 2023 earnings release and investor conference call.
• The preliminary financial results are unaudited and subject to change.

Risks

• The preliminary financial results are subject to further internal review and may differ materially from actual results.
• The company's guidance is based on current market conditions and customer forecasts, which may change.
• The company's future performance is subject to various risks and uncertainties, including those related to market conditions, supply chain, and customer demand.
• The company's ability to execute its 5-Point Strategy and integrate acquisitions could impact future results.
• Changes in macroeconomic conditions, interest rates, and currency exchange rates could affect the company's performance.

Future Outlook

The company expects first quarter 2024 revenue to be between $28 million and $30 million, with a gross margin of approximately 46% and earnings per diluted share between $0.08 and $0.13. Full year 2024 revenue is expected to be between $125 million and $130 million. These projections are based on current market conditions and customer forecasts.

Management Comments

• Management uses orders as a key performance metric to analyze and measure the Company's financial performance and results of operations.
• Management believes tracking orders is useful as it often is a leading indicator of future performance.

Industry Context

The company operates in the semiconductor and test solutions industry, which is subject to cyclical demand and technological changes. The delay in earnings release could be a concern for investors, especially given the current economic climate and the importance of timely financial reporting. The provided guidance for 2024 is important for investors to assess the company's future prospects.

Comparison to Industry Standards

• The preliminary Q4 2023 revenue of $28.4 million is a key metric to compare against competitors like Teradyne (TER) and Advantest (ATEYY), which also operate in the semiconductor test equipment market. However, without full audited results, a direct comparison is difficult.
• The gross margin guidance of 46% for Q1 2024 should be compared to the gross margins of these competitors to assess inTEST's profitability relative to the industry. Teradyne, for example, has historically reported gross margins in the 50-60% range.
• The order intake of $27.5 million in Q4 2023 is a leading indicator of future revenue and should be compared to the order backlog and order intake of competitors to gauge inTEST's market position and future growth potential.
• The company's focus on automotive/EV, defense/aerospace, industrial, life sciences, and security markets diversifies its revenue streams, which is a strategy also employed by other test equipment companies to mitigate risks associated with the cyclical nature of the semiconductor industry.

Stakeholder Impact

• Shareholders may be concerned about the delay in the earnings release and the unaudited nature of the preliminary results.
• Employees may be affected by any changes in the company's financial performance or strategic direction.
• Customers may be impacted by any changes in the company's ability to deliver products and services.
• Suppliers may be affected by any changes in the company's purchasing patterns.
• Creditors may be concerned about the company's financial health and ability to repay debts.

Next Steps

• The company will complete its year-end audit and review process.
• The company will report its full fourth quarter and full year 2023 results coincident with, or prior to, the filing of its Annual Report on Form 10-K for the year ended December 31, 2023.

Key Dates

Keywords

earnings, revenue, guidance, financial results, audit, orders, net earnings, cash flow, semiconductor, test solutions