inTEST (US:INTT)2023-08-10 20:11Revenue Performance - Total consolidated revenue for Q2 2023 was $32.6 million, a 10.1% increase from $29.6 million in Q2 2022 and a slight increase from $31.9 million in Q1 2023[143] - Revenue from the semiconductor market was $18.8 million, accounting for 57.8% of total revenue, up from $16.4 million (55.5%) in Q2 2022[143] - The defense/aerospace market saw a significant revenue increase of 173.4%, reaching $3.9 million compared to $1.4 million in Q2 2022[143] - Revenue from the auto/EV market decreased by 57.1%, falling to $1.5 million from $3.6 million in Q2 2022[143] - For the six months ended June 30, 2023, total revenue was $64.5 million, a 20.2% increase from $53.7 million in the same period of 2022[143] - The life sciences market revenue increased by 41.8% to $2.6 million compared to $1.9 million in the same period of 2022[143] - The industrial market revenue was $5.9 million, a slight increase of 3.7% from $5.7 million in the same period of 2022[143] Orders and Backlog - The company reported a backlog of unfilled orders, which is expected to be fulfilled within the next twelve months, indicating strong future revenue potential[144] - Total consolidated orders for Q2 2023 were $31.4 million, a decrease of 22.4% from $40.5 million in Q2 2022 and a slight increase of 2.0% from $30.8 million in Q1 2023[146] - The backlog of unfilled orders as of June 30, 2023, was approximately $44.6 million, down from $46.0 million at June 30, 2022, and $45.7 million at March 31, 2023[147] Market Diversification - The company aims to diversify its market presence beyond the semiconductor sector to mitigate cyclical volatility[135] - The company is focused on expanding its presence in life sciences, security, and industrial markets, which are expected to be less cyclical than the semiconductor market[139] Financial Performance - Gross margin for Q2 2023 remained stable at 46% of revenue, with fixed manufacturing costs increasing due to merit adjustments and additional headcount[153] - Selling expenses for Q2 2023 were $4.7 million, up 16% from $4.0 million in Q2 2022, driven by higher commissions and increased salary expenses[154] - Engineering and product development expenses for Q2 2023 were $2.0 million, reflecting a 7% increase primarily due to higher material costs[155] - General and administrative expenses for Q2 2023 were $5.0 million, a 2% increase from $4.9 million in Q2 2022, mainly due to higher salary and travel costs[156] - The company recorded an income tax expense of $572,000 for Q2 2023, compared to $454,000 for Q2 2022, with an effective tax rate of 17% for both periods[157] - For the six months ended June 30, 2023, the company recorded net earnings of $5.6 million and net cash provided by operations of $5.3 million[176] Liquidity and Capital Structure - As of June 30, 2023, the company had cash and cash equivalents of $37.4 million, up from $13.4 million at December 31, 2022, representing a 178% increase[173] - Working capital increased to $58.2 million as of June 30, 2023, compared to $33.2 million at December 31, 2022, reflecting a 75% growth[173] - The company has a consolidated funded debt to consolidated EBITDA ratio of 0.7 and a fixed charge coverage ratio of 3.9, indicating strong financial health and compliance with covenants[169] - The company drew $12 million under the Term Note for the acquisition of Videology and $8.5 million for Acculogic, totaling $20.5 million in acquisitions financed through the Term Note[170][171] - The company anticipates short-term working capital requirements between $8.0 million and $10.0 million, which can be supported by current cash, cash equivalents, and available credit[174] - The company raised $19.2 million from the sale of common stock in May 2023, enhancing its liquidity position[175] - The company has not borrowed any amounts under its $10 million revolving credit facility as of June 30, 2023, maintaining available liquidity[172] Capital Expenditures - Purchases of property and equipment for the six months ended June 30, 2023, were $709,000, primarily for leasehold improvements related to the Acculogic operation[177] - Interest expense for the six months ended June 30, 2023, was $358,000, compared to $278,000 for the same period in 2022, indicating an increase in financing costs[172]