inTEST Preview - Analyst Blog

Ken Nagy, CFA

inTEST Preview

inTEST (INTT) will hold a conference call tomorrow at 5.00 pm eastern time to discuss fourth quarter and full year 2010 results.

Recall that on January 10th inTEST provided an update to the Company’s outlook for the 2010 fourth quarter. The firm positively revised net revenue, bookings and pre-tax income for the fourth quarter 2010.

Net revenue for the fourth quarter is now expected to be approximately $10.0 million. (Originally $8.8 million to $9.5 million)
Bookings for the fourth quarter are now expected to be approximately $11.5 million, up significantly from the third quarter’s bookings of $9.4 million.
Pre-tax income is now expected to be in the range of $0.08 to $0.10 per diluted share. (subject to change per audit adjustment)

inTEST Corporation is a designer, manufacturer and marketer of mechanical, thermal and electrical products that are used by semiconductor manufacturers in conjunction with automatic test equipment, (ATE), in the testing of integrated circuits, (ICs). Beyond its blue chip portfolio of semiconductor manufacturers, the acquisition of Sigma has propelled the firm to diversify into non-semi thermal testing products. This has the effect of diversifying revenues and opens the company up to new markets. In the test equipment world change is good; be it the broad switch to mobile computing, the march to finer geometries, or the growth of electronic content in automobiles more chip content means more testing for inTEST.

It is important to note, despite the sequential pullback in orders and bookings (consistent with trends seen in the broader semiconductor equipment sector) the firm was able to maintain a 48% gross margin in the third quarter of 2010 (the same as the second quarter), despite the lower revenues. INTT benefited from a more favorable product mix and continued to manage product material costs as well as operating expenses quite well.

For a free copy of the full research report, please email scr@zacks.com with INTT as the subject.

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