Q2 2024 inTEST Corp Earnings Call

Operator: Greetings and welcome to the inTest Corporation second quarter 2024 financial results call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on a telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Craig Moholic. Thank you. You may begin.

Unknown Executive: Greetings and welcome to Intest Corporation, 2nd quarter, 2024, financial results call.

Greetings and welcome to Intest Corporation second quarter 2024 financial results call.

Unknown Executive: At this time, all participants are in a listen on emote.

Speaker Change: At this time all participants are in a listen only mode.

Unknown Executive: A brief question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on a telephone keypad. As a reminder, this conference has been recorded.

Brief question and answer session will follow the formal presentation.

Speaker Change: If anyone should require operator assistance during the conference. Please.

Speaker Change: Please press star zero on the telephone keypad.

Speaker Change: As a reminder, this conference is being recorded.

Unknown Executive: It is now my pleasure to introduce your host, Craig Moholick. Thank you. You may begin.

Speaker Change: It is now my pleasure to introduce your host Craig Mahalik. Thank.

Craig Mahalik: Thank you you may begin.

Craig Moholick: Good morning, everyone. We certainly appreciate your interest in Intest Corporation and thank you for sharing your time with us today. Joining me on the call are Nick Grant, a president and chief executive officer, and Duncan Gilmour, a chief financial officer and treasurer. You should have the earnings release, which went out this morning, as well as the slides that will accompany our conversation today. If not, you can find these documents on the Investor Relations section of our website at edentest.com.

Craig Moholic: Good morning, everyone. We certainly appreciate your interest in inTest Corporation, and thank you for sharing your time with us today. Joining me on the call are Nick Grant, our President and Chief Executive Officer, and Duncan Gilmour, our Chief Financial Officer and Treasurer. You should have the earnings release, which went out this morning, as well as the slides that will accompany our conversation today. If not, you can find these documents in the investor relations section of our website or on inTest.com.

Speaker Change: Good morning, everyone. We certainly appreciate your interest and in past Corporation and thank you for sharing your time with US today joining me on the call are Nick Grant, our President and Chief Executive Officer, and Duncan Belmont, Our Chief Financial Officer and Treasurer.

Speaker Change: You should have the earnings release, which went out this morning as long as the slides that will accompany our conversation today.

Speaker Change: You can find these documents on the Investor Relations section of our website at <unk> Dot com.

Craig Moholick: Please turn the slide to, and I'll review the Safe Harbor statement. During this call, management may make some forward-looking statements about our current plans, beliefs, and expectations. These statements apply to future events that are subject to risks and uncertainties, as well as those that could cause actual results from materially from what it stated here today. These risks and uncertainties and other factors are provided in the earnings release as well as with documents filed by the company with the Securities and Exchange Commission. These documents can be found at our website or at FCC.gov.

Craig Moholic: Please turn to slide 2, and I'll review the Safe Harbor Statement. During this call, management may make some forward-looking statements about our current plans, beliefs, and expectations. These statements apply to future events that are subject to risks and uncertainties, as well as those that could cause actual results to differ materially from what is stated here today. These risks, uncertainties, and other factors are provided in the earnings release, as well as in documents filed by the company with the Securities and Exchange Commission.

Speaker Change: Please turn to slide two and I'll review, the Safe Harbor statement.

Speaker Change: During this call management may make some forward looking statements about our current plans beliefs and expectations.

Speaker Change: Statements apply to future events that are subject to risks and uncertainties as well as those that could cause actual results to differ materially from what is stated here today. These risks uncertainties and other factors are provided in the earnings release as well as with documents filed by the company, but just curious and exchange Commission.

Craig Moholic: These documents can be found on our website or at sec.gov. Also, management will refer to some non-GAAP financial measures today. We believe this additional information will be useful in evaluating our performance. However, you should not consider the presentation of this additional information in isolation or as a substitute for results prepared in accordance with GAAP. You can find reconciliations of non-GAAP measures with comparable GAAP measures in the tables that accompany today's release and slides. Now, please turn to slide three, and I'll turn the call over to Nick. Nick? Thanks.

These documents can be found at our website or at F. C C Dot Gov.

Craig Moholick: Also, management will refer to some non-GAAP financial measures today. We believe these will be useful in evaluating our performance. You should not consider the presentation of this additional information in isolation or is the substitute for results prepared in accordance with GAT. You can find recommendations of non-GAAP measures with comparable GAAP measures in the tables that accompany today's release and slides.

Speaker Change: Also management will refer to some non-GAAP financial measures today, we believe these will be useful in evaluating our performance you should not consider the presentation of this additional information in isolation or as a substitute for results prepared in accordance with GAAP.

Speaker Change: You can find reconciliations of non-GAAP measures with comparable GAAP measures in the tables that accompany today's release and slides now please turn to slide three and I'll turn the call over to Nick Nick.

Craig Moholick: Now, please turn to slide three, and I'll turn the call over to Nick.

Nick Grant: Thank you, Craig, and good morning, everyone. Thanks for joining us for our second quarter 2024 earnings call. First, I would like to thank the entire inTest team for their efforts in a relatively tough environment. As expected, the first half proved challenging as we continued to see weakness in our key markets of semi, auto, EV, and industrials. These three markets typically account for over 70% of our sales. Overall, the quarter was mixed, with some aspects coming in as we expected and others falling short.

Nick Grant: Thank you, Craig, and good morning, everyone. Thanks for joining us for our second quarter 2024 earnings call. First, I would like to thank the entire Intest team for their efforts in a relatively tough environment. As expected, the first half proved challenging as we continued to see weakness in our key markets of semi-auto EV and industrials. These three markets typically account for over 70% of our sales. Overall, the quarter was mixed, with some aspects coming in as we expected and others falling short. We did achieve record revenue of 34 million, which came in at the low end of our guidance range, while Bruce Margin, a 40.6 percent, was much lower than expected, driven primarily by the volume coming in at the low end of the range, and a less favorable mix.

Nick Grant: Thank you Craig and good morning, everyone. Thanks for joining us for our second quarter 2024 earnings call.

Nick Grant: First I would like to thank the entire intest team for their efforts in a relatively tough environment.

Nick Grant: As expected the first half proved challenging as we continued to see weakness in our key markets of semi auto EV and industrials. These.

Nick Grant: These three markets typically account for over 70% of our sales.

Nick Grant: Overall, the quarter was mixed with some aspects coming in as we expected and others falling short.

Nick Grant: We did achieve record revenue of $34 million, which came in at the low end of our guidance range, while gross margin of 40.6% was much lower than expected, driven primarily by volume coming in at the low end of the range and a less favorable mix. Lower commission expenses, reduced bonus accruals, and our cost management efforts resulted in operating expenses coming in below our prior guidance. As a result, EPS came in at $0.02 per diluted share and $0.08 per diluted share on an adjusted basis.

Nick Grant: We did achieve record revenue of $34 million, which came in at the low end of our guidance range. While gross margin of 46% was much lower than expected driven primarily by the volume coming in at the low end of the range and a less favorable mix.

Nick Grant: Lower commission expenses, reduced bonus of rules, and our cost management efforts resulted in operating expenses coming in below our prior guidance. As a result, EPS came in at two cents per diluted share and eight cents per diluted share on an adjusted basis. Alclamation, which we acquired very late in the first quarter, contributed 9.7 million in revenue that more than offset the ongoing weakness in semi-auto EV.

Nick Grant: Lower commission expenses reduced bonus accruals and our cost management efforts resulted in operating expenses coming in below our prior guidance as a result, EPS came in at <unk> <unk> per diluted share and eight cents per diluted share on an adjusted basis.

Nick Grant: Alclamation, which we acquired very late in the first quarter, contributed $9.7 million in revenue that more than offset the ongoing weakness in SEMI. This was a record revenue quarter for that business, which was supported by the timing of shipments from the large backlog we acquired. We expect their shipments levels to normalize for the next few quarters.

Nick Grant: Al formation, which we acquired very late in the first quarter contributed $9 7 million in revenue that more than offset the ongoing weakness in semi.

Nick Grant: County. This was a record revenue quarter for that business, which was supported by the timing of shipments from the large backlog we acquired. We expect their shipment levels to normalize from the next few quarters. Across the organization, we continue to execute our five-point strategy, focusing on growth efforts on diversified markets, product innovation, and leveraging our application expertise. These efforts are helping as we manage through the current semiconductor cycle, and the near-term sluggishness we're seeing in auto-EV and industrial markets. As a reminder, the addition of affirmation strengthens and diversifies our position in the automotive industry, where they provide test equipment for electronics and entertainment systems. In addition, it strengthens our position in life sciences and consumer electronics.

Nick Grant: This was a record revenue quarter for that business, which was supported by the timing of shipments from the large backlog we acquired.

Nick Grant: We expect their shipment levels to normalize for the next few quarters.

Nick Grant: Across the organization, we continue to execute our five-point strategy, focusing our growth efforts on diversified markets, product innovation, and leveraging our application expertise. These efforts are helping as we manage through the current semiconductor cycle and the near-term sluggishness we're seeing in the auto EV and industrial markets. As a reminder, the addition of affirmation strengthened and diversified our position in the automotive industry, where they provide test equipment for electronics and entertainment systems.

Nick Grant: Across the organization, we continue to execute our five point strategy, focusing our growth efforts on diversified markets product innovation and leveraging our application expertise. These.

Nick Grant: These efforts are helping as we manage through the current semiconductor cycle and the near term sluggishness, we are seeing in auto EV and industrial markets.

Nick Grant: As a reminder, the addition of affirmation strengthen and diversified our position in the automotive industry, where they provide test equipment for electronics and entertainment systems and.

Nick Grant: In addition, it strengthened our position in life sciences and consumer electronics. The integration of AlphaMation is progressing as planned, and it's great to see the teams already embracing numerous synergies across the business. These synergies range from product and technology sharing, to supply chain leveraging, to joint trade show participation and customer visits.

Nick Grant: In addition, and strengthen our position in the life Sciences and consumer electronics.

Nick Grant: The integration of affirmation is progressing to plan, and it's great to see the teams already embracing numerous synergies across the businesses. These synergies range from product and technology sharing, to supply chain leveraging, to joint trade show participation, and customer visits. One success captured in the quarter was a customer order received for a new acoologic system with the affirmation Supernova software included. It was the combination of the two technologies that won us the order.

Nick Grant: The integration of Alpha nation is progressing to plan and it's great to see the teams already embracing numerous synergies across the businesses.

Nick Grant: These synergies range from product and technology sharing to supply chain, leveraging joint trade show participation and customer visits.

Nick Grant: One success captured in the quarter was a customer order received for a new archaeology system with the Alfamation Supernova software included. It was the combination of the two technologies that won us the order. I look forward to seeing many more of these types of wins.

Nick Grant: One success captured in the quarter was a customer order received for a new Acura logic system with the affirmation supernova software included.

Nick Grant: It was the combination of the two technologies that one is the order.

Nick Grant: I look forward to seeing many more of these types of wins.

Look forward to seeing many more of these types of wins.

Nick Grant: Turning to slide four, I'll review orders and backlog. As we have been communicating for the last eight months or so, the first half of 2024 was expected to be weaker than the second half of the year. Although second quarter orders did improve off of a weak first quarter comparable, the ramp in order trends we anticipated for the second half looks to be more tempered, further impacting our outlook for the year. In addition, we have seen certain customers push out the libraries. However, we are not seeing any cancellations, as these customers are indicating they are confident their end market demand will improve in the coming months.

Nick Grant: Turning to slide four, our review orders and backlog. As we have been communicating for the last eight months or so, the first half of 2024 was expected to be weaker than the second half of the year. Although second quarter orders did improve off of a weak first quarter comparable, the ramp in order trends we anticipated for the second half looks to be more tempered, further impacting our outlook for the year. In addition, we have seen certain customers push out deliveries.

Speaker Change: Turning to slide four I'll review orders in backlog.

Speaker Change: As we have been communicating for the last eight months or so the first half of 2024 was expected to be weaker than the second half of the year.

Although second quarter orders did improve off of a weak first quarter comparable the ramp and order trends, we anticipated for the second half looks to be more tempered further impacting our outlook for the year. In addition, we have seen certain customers push out deliveries. However, we are not seeing any cancellations as the.

Nick Grant: However, we are not seeing any cancellations as these customers are indicating they are confident their in-market demand will improve in the coming months. Additionally, for the second consecutive quarter, back-end semi-orders were up sequentially, showing further signs of coming out of the trough. This improvement helped to offset the continued notable decline in front-end orders, given the current pause in manufacturing capacity, expansion for silicon carbide, and gallium nitride. However, our long-term perspective for the adoption of these technologies remains bullish.

These customers are indicating they are confident their end market demand will improve in the coming months.

Nick Grant: Encouragingly, for the second consecutive quarter, back end semi orders were up sequentially, showing further signs of coming out of the trough. This improvement helped to offset the continued notable decline in front end orders, given the current pause in manufacturing capacity, expansion for silicon carbide and gallium nitride. Our long-term perspectives for the adoption of these technologies remains bullish. During the second quarter, our backlog declined as we worked through a portion of the 22.8 million and acquired backlog from Affirmation. As mentioned in the past, affirmations orders can be lengthy as timing of their large multi-system projects can vary quarter to quarter.

Speaker Change: Encouragingly for the second consecutive quarter backend semi orders were up sequentially showing further signs of coming out of the trough.

Speaker Change: This improvement helped to offset the continued notable decline in front end orders given the current pause in manufacturing capacity expansion for silicon carbide and gallium nitride.

Speaker Change: Our long term perspectives for the adoption of these technologies remains bullish.

Nick Grant: During the second quarter, our backlog declined as we worked through a portion of the $22.8 million in acquired backlog from alfamation. As mentioned in the past, AlphaMation's orders can be lumpy, as the timing of their large multi-system projects can vary quarter to quarter. While orders for that business were relatively soft in the second quarter at $3.2 million, this came after booking more than $11 million in the first quarter of the year. Looking more broadly across our businesses, our pipelines remain healthy. It's just the rate of conversion of these opportunities to new orders that remains slow. With that, I will turn it over to Duncan to review the financials and outlook in more detail. Duncan, it's over to you.

Speaker Change: During the second quarter, our backlog declined as we worked through a portion of the $22 8 million in acquired backlog for malformation.

Speaker Change: As mentioned in the past our formations orders can be lumpy as timing of their large multi system projects can vary quarter to quarter.

Nick Grant: While orders for that business were relatively soft in the second quarter at 3.2 million, this came after booking more than $11 million in the first quarter of the year. Looking more broadly across our businesses, our pipelines remain healthy. It's just the rate of conversion of these opportunities to new orders which remain slow.

Speaker Change: While orders for that business were relatively soft in the second quarter at $3 2 million. This came after booking more than $11 million in the first quarter of the year.

Speaker Change: Looking more broadly across our businesses our pipelines remain healthy. It's just the rate of conversion of these opportunities to new orders, which remains slow.

Nick Grant: With that, let me turn it over to Duncan to review the financials and outlook in more detail.

Speaker Change: With that let me turn it over to Duncan to review the financials and outlook in more detail.

Duncan Gilmour: detail. Duncan, over to you.

Duncan Belmont: Duncan over to you.

Duncan Gilmour: Thank you, Nick. Starting on slide five, as Nick noted, revenue for the second quarter was 34 million, including 9.7 million from Alphamation. The 1.4 million increase, compared with Q2 2023, was driven by 9.2 million of sales growth in auto EV, primarily from the acquisition. This more than offset the 8.7 million sales decline in semi. Sequentially, second quarter revenue increased 4.2 million, with auto EV up 6.8 million, and life sciences up 1.5 million. Both markets benefited from the acquisition. Same-me revenue fell 32% or 4.8 million. Revenue from Alphamation more than offset that decline.

Duncan Belmont: Thank you Nick.

Duncan Gilmour: Starting on slide 5, as Nick noted, revenue for the second quarter was $34 million, including $9.7 million from Alfamation. The 1.4 million increase compared with Q2 2023 was driven by 9.2 million of sales growth in auto EV, primarily from the acquisition. This more than offset the 8.7 million sales decline in semi. Sequentially, second quarter revenue increased 4.2 million, with auto EV up 6.8 million and life sciences up 1.5 million. Both markets benefited from the acquisition.

Duncan Belmont: Starting on slide five as Nick noted revenue for the second quarter was 34 million, including $9 7 million from Al formation.

Duncan Belmont: The $1 4 million increase compared with Q2 2023 was driven by $9 2 million of sales growth in auto EV, primarily from the acquisition.

Duncan Belmont: This more than offsets the 8.7 million sales decline in semi.

Duncan Belmont: Sequentially second quarter revenue increased $4 2 million with auto EV up $6 8 million and life Sciences up 1.5 million Boes.

Duncan Belmont: Both markets benefited from the acquisition.

Duncan Gilmour: Semi-revenue fell 32% or 4.8%, but revenue from alfamation more than offset that. Moving to slide six, gross margin of 40.6% for the quarter contracted 325 basis points sequentially, driven by product. On a year-over-year comparison, gross margin contraction was also significantly impacted by product mix, with lower volume on our higher margin semi-business being offset by lower margin revenue from the acquisition. On a trailing 12-months basis, our gross profit was 53.8 million, or 43.8% of sales, the drop reflecting the weakness in higher

Duncan Belmont: <unk> revenue fell 32% or $4 8 million.

Duncan Belmont: Revenue from Alpha nation more than offset that decline.

Duncan Gilmour: Moving to slide six, gross margin of 40.6% for the quarter contracted 325 basis points sequentially, driven by product mix. On a year-over-year comparison, gross margin contraction was also significantly impacted by product mix, with lower volume on our higher-margin semi-business being offset with lower-margin revenue from the acquisition. On a trailing 12-month basis, our gross profit was 53.8 million, or 43.8% of sales. The drop reflects the weakness in higher margin semi-sells. As you can see on slide seven, compared with the prior year, our operating expenses were up 1.8 million, as we incorporated a full quarter of the acquisition's operating expenses.

Duncan Belmont: Moving to slide six gross margin of 46% for the quarter, our contracted 325 basis points sequentially driven by product mix.

Duncan Belmont: On a year over year comparison gross margin contraction was also significantly impacted by product mix with lower volume on our higher margin semi business being offset with lower margin revenue from the acquisition.

Duncan Belmont: On a trailing 12 months basis gross profit was $53 8 million or 43, 8% of sales the drop reflecting the weakness in higher margin semi sales.

Duncan Gilmour: As you can see on slide seven, compared with the prior year, our operating expenses were up 1.8 million as we incorporated a full quarter of the acquisition's operating expenses. However, sequentially, cost reductions during the quarter lowered legacy business OPEX by nearly $1 million and partially offset the $2 million sequential increase from the acquisition.

Duncan Belmont: As you can see on slide seven compared with the prior year. Our operating expenses were up 1.8 million as we incorporated a full quarter of the acquisitions operating expenses.

Duncan Gilmour: Sequentially, cost reduction during the quarter lowered legacy business off-ex by nearly 1 million and partially offset the 2 million sequential increase from the acquisition. As a reminder, Q2 incorporated a full quarter of acquisition operating costs, whereas Q1 included just over two weeks. Sequentially, while operating expenses in total were up 870,000, as a percent of sales for the decline was 260 basis points to 39.6%.

Duncan Belmont: Sequentially cost reductions during the quarter lowered legacy business opex by nearly $1 million and partially offset the 2 million sequential increase from the acquisition as a reminder, Q2 incorporated a full quarter of acquisition operating costs, whereas Q1 included just over two weeks.

Duncan Gilmour: As a reminder, Q2 incorporated a full quarter of acquisition operating costs, whereas Q1 included just over two weeks. Sequentially, while operating expenses in total were up 870,000, as a percent of sales, the decline was 260 basis points to 39.6%. Turning to slide eight, you can see our bottom line and adjusted EBITDA results. For the quarter, net earnings were $230,000 or 2 cents per diluted share. Adjusted net earnings were $959,000 or $0.08 per diluted share. Adjusted EPS reflects adding back tax-affected acquired intangible amortisation. On an after-tax basis, our acquired intangible amortisation amounted to approximately $729,000 or about 6 cents per diluted share in the second quarter.

Duncan Belmont: <unk>.

Duncan Belmont: Sequentially, while operating expenses in total were up 870000 as a percent of sales to decline was 260 basis points.

Duncan Belmont: Nine 6%.

Duncan Gilmour: Turning to slide eight, you can see our bottom line and adjusted EBITDA results. For the quarter, net earnings were 230,000, or two cents per diluted share. Adjusted net earnings were 959,000, or 8 cents per diluted share. Adjusted EPS reflect adding back tax-affected acquired intangible amortization. On an aft of tax basis, our acquired intangible amortization amounted to approximately 729,000, or about 6 cents per diluted share in the second quarter. Adjusted EBITDA for Q2 was 2.2 million, representing a 6.3% adjusted EBITDA margin.

Duncan Belmont: Turning to slide eight you can see our bottom line and adjusted EBITDA results.

Duncan Belmont: For the quarter net earnings were 230000 or two cents per diluted share.

Duncan Belmont: Adjusted net earnings were 959000 or eight cents per diluted share adjusted EPS reflects adding back tax effected acquired intangible amortization on an after tax basis, our acquired intangible amortization amounted to approximately 729000 or about six.

Duncan Belmont: <unk> per diluted share in the second quarter.

Duncan Gilmour: Adjusted EBITDA for Q2 was $2.2 million, representing a 6.3% adjusted EBITDA margin. Slide 9 shows our capital structure and cash flow. With a ramp-up in shipments towards the end of the quarter, combined with cash outflows for 2023 bonus payments and first half 2024 estimated tax payments, we used $5.1 million in operating cash during the quarter. Capital expenditures in the second quarter were approximately $300,000, unchanged from the prior year period, and the resultant free cash outflow was $5.4 million.

Duncan Belmont: Adjusted EBITDA for Q2 was $2 2 million, representing a six 3% adjusted EBITDA margin.

Duncan Gilmour: Slide nine shows our capital structure and cash flow. With a ramping shipment towards the end of the quarter, combined with cash outflows for 2023 bonus payments and first half 2024 estimated tax payments, we used 5.1 million of operating cash during the quarter. Capital expenditures in the second quarter were approximately 300,000, unchanged from the prior year period, and the resultant free cash outflow was 5.4 million. Cash and equivalence at the end of the second quarter with 20.4 million, down 7 million from the trailing quarter, reflecting free cash outflow combined with net debt repayments and foreign exchange impacts.

Duncan Gilmour: Cash and equivalents at the end of the second quarter were 20.4 million, down 7 million from the trailing quarter, reflecting free cash outflow combined with net debt repayments and foreign exchange impact. We ended the quarter with total debt of $21.1 million, which reflects a total debt leverage ratio of 2.1x. During the quarter, we repaid approximately 1.1 million of debt.

Duncan Belmont: Slide nine shows our capital structure and cash flow.

Duncan Belmont: With a ramp in shipments towards the end of the quarter combined with cash outflows for 2023 bonus payments and first half 2020 for estimated tax payments, we used $5 1 million of operating cash during the quarter.

Duncan Belmont: Capital expenditures in the second quarter were approximately 300000 unchanged from the prior year period, and the resultant free cash outflow was $5 4 million.

Duncan Belmont: Cash and equivalents at the end of the second quarter with $20 4 million down 7 million from the trailing quarter, reflecting free cash flow combined with net debt repayments and foreign exchange impacts.

Duncan Gilmour: We ended the quarter with total debt of 21.1 million. This reflects a total debt leverage ratio of 2.1 x. During the quarter, we repaid approximately 1.1 million of debt. We continued to have 30 million available with our delayed draw, term loan, and incremental 10 million available under our revolver. As a reminder, in May we extended the maturity dates on these facilities by 4 years to May 2031, and the drawdown period was extended 2 years to May 2026.

Duncan Belmont: We ended the quarter with total debt of 21.1 million. This reflects a total debt leverage ratio of 2.1 ex <unk>.

Duncan Belmont: During the quarter, we repaid approximately $1 1 million of debt.

Duncan Gilmour: We continue to have 30 million available with our delayed draw term loan and incremental 10 million available under our revolver. As a reminder, in May, we extended the maturity date on these facilities by four years to May 2031, and the drawdown period was extended two years to May 2026. Turn to slide 10 as we review our outlook for 2024. For the third quarter, we are expecting revenue to be slightly lower than the second quarter, with gross margins improving somewhat.

Duncan Belmont: We continue to have 30 million available with our delayed draw term loan and an incremental 10 million available under our revolver. As a reminder, in may we extended the maturity dates on these facilities by four years to May 2031, and the drawdown period was extended two years to May 2026.

Duncan Gilmour: Turns to slide 10 as we review our outlook for 2024. For the third quarter, we are expecting revenue to be slightly lower than the second quarter, with gross margins improving somewhat. Third quarter operating expenses, including amortization, are expected to be similar to Q2. Total intangible asset amortization is expected to be approximately 900,000 and approximately 700,000 after tax, or about 6 cents per share. We are expecting EPS and adjusted EPS for the third quarter to be similar to the second quarter. As a reminder, we simply adjust for tax-effected amortization expense. We have updated our full-year outlook to reflect the market conditions and recent order trends Nick discussed.

Duncan Belmont: Turning to slide 10, as we review our outlook for 2024.

Duncan Belmont: For the third quarter, we are expecting revenue to be slightly lower than the second quarter with gross margins improving somewhat.

Duncan Gilmour: Third quarter operating expenses, including amortization, are expected to be similar to Q2. Total intangible asset amortization is expected to be approximately $900,000 and approximately $700,000 after tax, or about six cents per share. We are expecting EPS and adjusted EPS for the third quarter to be similar to the second quarter. As a reminder, we simply adjust for tax-affected amortization expense.

Duncan Belmont: Third quarter operating expenses, including amortization are expected to be similar to Q2.

Duncan Belmont: Total intangible asset amortization is expected to be approximately 900000 and approximately 700000 after tax what about six cents per share.

Duncan Belmont: We are expecting EPS and adjusted EPS for the third quarter to be similar to the second quarter. As a reminder, we simply adjust for tax effected amortization expense.

Nick Grant: We have updated our full-year outlook to reflect the market conditions and recent order trends Nick discussed. We now expect 2024 revenue to range from 128 to 133 million. Gross margin for 2024 is expected to be approximately 42 to 43%, with expected operating expenses of approximately £54 million. This includes intangible asset amortization expense of approximately $3.3 million, or $2.7 million on a tax-adjusted basis. Our expected effective tax rate remains at about 17 to 19 percent.

Duncan Belmont: We have updated our full year outlook to reflect the market conditions and recent order trends. Nick discussed we now expect 2020 for revenue to range from $128 million to $133 million.

Duncan Gilmour: We now expect 2024 revenue to range from 128 to 133 million. Gross margin for 2024 is expected to be approximately 42 to 43% with expected operating expenses of approximately 54 million. This includes intangible asset amortization expense of approximately 3.3 million, or 2.7 million on a tax adjusted basis. Our expected effective tax rate remains at about 17 to 19%. We still expect our capital expenditures in 2024 to run between 1 to 2% of sales.

Nick Grant: Gross margin for 2024 is expected to be approximately 42% to 43% with expected operating expenses of approximately $54 million.

Nick Grant: This includes intangible asset amortization expense of approximately $3 3 million or $2 7 million on a tax adjusted basis.

Speaker Change: I would have expected effective tax rate remains at the page 17% to 19%.

Nick Grant: We still expect our capital expenditures in 2024 to run between 1% to 2% of sales. As usual, our guidance does not include the potential impact from any non-operating expenses such as corporate development that may occur from time to time, nor does it include the potential impact from any additional acquisitions we may make. With that, if you will turn to slide 11, I will now turn the call back over to Nick.

Speaker Change: We still expect our capital expenditures in 2024 to run between one 2% of sales.

Duncan Gilmour: As usual, our guidance does not include the potential impact from any non-operating expenses, such as corporate development that may occur from time to time, nor does it include the potential impact from any additional acquisitions we may make.

Nick Grant: As usual our guidance does not include the potential impact from any non operating expenses such as corporate development that may occur from time to time, nor does it include the potential impact from any additional acquisitions, we may make with that if you'll turn to slide 11, I will now turn the call back over to Nick.

Nick Grant: With that, if you will turn to slide 11, I will now turn the call back over to Nick.

Nick Grant: Thanks, Duncan. In a tough macro environment, our team is keeping their head down and executing our plan. As noted, we continue to face some heavy headwinds in the semi market, notably the front-end segment.

Nick Grant: Thanks Duncan.

Nick Grant: In a tough macro environment, our team is keeping their heads down and executing our plan. As noted, we continue to face some heavy headwinds in the semi market, notably the front-end segment. As a result, our expectation is that demand for the front-end SEMI solution, supporting silicon carbide and gallium nitride, will remain subdued into 2025.

Nick Grant: In a tough macro environment, our team is keeping their head down in executing our plan.

Speaker Change: As noted we continue to face some heavy headwinds in the semi market, notably the front end segment.

Nick Grant: As a result, our expectation is that demand for the front end semi solutions supporting silicon carbide and gallium nitride will remain subdued into 2025. Accordingly, we have taken recent actions to right size the business, which should result in 1.2 million of annualized states.

Speaker Change: As a result, our expectation is that demand for the front end semi solutions supporting silicon carbide and gallium nitride will remain subdued into Tony 25.

Nick Grant: Accordingly, we have taken recent actions to right-size the business, which should result in $1.2 million of annualized savings. We continue to drive the teams to advance new product development, as well as execute competitive displacement programs to gain market share. In addition, I'm pleased with the amount of increased face time our sales teams are spending with customers. Increasing customer intimacy during slow times will only position us better when markets improve. In addition, our teams are constantly evaluating our go-to-market approach, pricing, competition, lead generation effectiveness, and the performance of our channel partners to drive growth.

Speaker Change: Accordingly, we have taken recent actions to rightsize the business, which should result in 1.2 million of annualized savings.

Nick Grant: meetings. We continue to drive the teams to advance new product development as well as execute competitive displacement programs to gain market share. In addition, I'm pleased with the amount of increased face time our sales teams are spending with customers. Increasing customer intimacy during slow times will only position us better when markets improve. In addition, our teams are constantly evaluating our go-to-market approach, pricing, competition, lead generation effectiveness, and the performance of our channel partners to drive growth. Our optimization efforts in these areas will never stop.

Speaker Change: We continue to drive the teams to advance new product development as well as execute competitive displacement programs to gain market share.

Speaker Change: In addition, I am pleased with the amount of increase face time, our sales teams are spending with customers increasing customer intimacy during slow times, while only position us better when markets improve.

Speaker Change: In addition, our teams are constantly evaluating our go to market approach pricing competition lead generation effectiveness and the performance of our channel partners to drive growth.

Nick Grant: Our optimization efforts in these areas will never stop. As mentioned, our diversification progress is serving us well, and I'm pleased with the headway the teams are making on the integration of AlphaMation and the synergies that are being captured. In addition, we remain active in M&A Pursuits, which would further expand our portfolio of solutions, allowing us to better serve our customers. I'm excited about it.

Speaker Change: Our optimization efforts in these areas will never stop as mentioned our diversification progress is serving us well and I'm pleased with the headway that teams are making on the integration of affirmation and the synergies that are being captured.

Nick Grant: As mentioned, our diversification progress is serving as well, and I'm pleased with the headway the teams are making on the integration of affirmation and the synergies that are being captured. In addition, we remain active on M&A pursuits, which would further expand our portfolio of solutions, allowing us to better serve our customers.

Speaker Change: In addition, we remain active on M&A pursuits, which would further expand our portfolio of solutions, allowing us to better serve our customers I'm excited about our future.

Nick Grant: I'm excited about our future.

Operator: With that operator, we can open the lines for questions. Thank you. We will now be conducting a question and answer session. If you'd like to ask a question, please press star 1 on your telephone keypad.

Unknown Executive: With that operator, we can open the lines for questions. Thank you.

Speaker Change: With that operator, we can open the lines for questions.

Speaker Change: Thank you.

Operator: Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove a question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the start button. One moment, please, while we poll for questions. The first question comes from Jaeson Schmidt with Lake Street Capital Markets. Please go ahead.

Unknown Executive: We will now be conducting a question and answer session. If you'd like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.

Speaker Change: We will now be conducting a question and answer session.

Speaker Change: If you'd like to ask a question. Please press star one on the telephone keypad.

Speaker Change: A confirmation tone will indicate your line is in the question queue you.

Speaker Change: You May press star two if you'd like to remove your question from the queue.

Speaker Change: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.

Unknown Executive: One moment, please, while we poll for questions.

Speaker Change: One moment, please why do we poll for questions.

Yeah.

Jason Schmidt: The first question comes from Jason Schmidt. With Lake Street Capital Markets, please go ahead. Hey guys, thanks for taking my questions. Just curious if you guys to talk about the linearity of orders in the quarter, just wondering if it was more just broad-based softness throughout the quarter or things sort of turquoise turn at a particular point.

Speaker Change: The first question comes from Jason Smith with Lake Street Capital markets. Please go ahead.

Jaeson Schmidt: Hey guys, thanks for taking my questions. I was just curious if you guys could talk about the linearity of orders in the quarter. I was wondering if it was more just broad-based softness throughout the quarter, or things sort of took a turn at a particular point.

Jason Smith: Hey, guys. Thanks for taking my questions. Just curious if you guys could talk about the linearity of orders in the quarter. Just wondering if it was more just broad based softness throughout the quarter are things sort of took a turn at a particular point.

Nick Grant: Hey, good morning, Jason. I would say our order pattern followed our typical patterns. We typically see in a quarter where the first month being relatively soft and then improving in the second and the third month being the strongest out there. I think that it's just the normal with the teams are able to close more of the deals towards the end of the quarter out there, and then the first month starts all slower, but optimistic that strength continues.

Nick Grant: Good morning, Jaeson. I would say our order pattern followed the typical patterns we typically see in a quarter where, you know, the first month being relatively soft, and then improving in the second, and the third month being the strongest out there. So You know, I think that is just kind of normal with the teams, you know, able to close more of the deals towards the end of the quarter out there, and then the first month starts off slower. But, you know, optimistic that Trent continues.

Speaker Change: Hey, good morning, Jason.

Speaker Change: I would say our order pattern followed our typical patterns, we typically see in a quarter, where the first month being relatively soft and then improving in the second and the third one being the strongest.

Speaker Change: <unk> out there so.

Speaker Change: You know I think that is just kind of a normal with the teams you know.

Speaker Change: Able to close more of the deals towards the end of the quarter out there and then the first months starts all slower but I'm.

Speaker Change: I'm optimistic that that trend continues.

Nick Grant: Okay, that makes sense. And then you noted some push out of deliveries, obviously impacting this year, but wondering if these customers have given you an indication on more specific delivery dates or if it's more just general, things have been pushed into 20.

unknown: Okay, that makes sense. And then you noted some push-back on deliveries, obviously impacting this year, but wondering if these customers have given you an indication of kind of more specific delivery dates, or if it's more just general, things have been pushed into 20.

Speaker Change: Okay that makes sense and then you noted some push out of deliveries obviously impacting this year, but wondering if these customers have given you an indication on kind of more specific delivery dates or if it's more just general things have been pushed into 'twenty.

Nick Grant: Jackson. Yeah, most of the pushing we've seen was out of Q2 and more into Q4, where they wanted before the end of the year there, and that haven't really seen much move into 2025. So yeah, it's still within the year out there.

Nick Grant: Yeah, most of the push pushing we've seen is out of Q2 and more into Q4, where they want it before the end of the year there, and they haven't really seen much move into 2025. Then, you know, so yeah, it's still within the year out there.

Speaker Change: Yeah, most of the the pushing pushing we've seen as was out of Q2 and more into Q4, where they want it before the end of the year out there that haven't really seen much move into 2025.

Speaker Change:

Speaker Change: So yeah, it's still within the year out there.

Unknown Executive: Gotcha.

Gotcha and just the last one for me and I'll jump back into queue. You noted automation integration is go isn't good track just curious if things are largely completed at this point or if there's some more lifting to be done.

Nick Grant: And just the last one for me, and I'll jump back into Q. You noted, Alformation integration is going to be track. Just curious if things are largely completed at this point, or if there's some more lifting to be done. Yeah, I know. I'd say progressing the integrations, progressing well as a comment it on, and you know, it's been three and a half while I'm coming on four months now. But yeah, we still got work to do to get these guys fully integrated. It just takes time and that, but really pleased with the progress we're making.

Nick Grant: And just the last one for me, and I'll jump back into Q. You noted automation integration is still in the works. Just curious if things are largely completed at this point, or if there's some more lifting to be done.

Nick Grant: Yeah, no, I'd say it's progressing. The integration is progressing well, as I commented on. And, you know, it's been three and a half, well, I'm coming on four months now. But yeah, we still have work to do to get these guys fully integrated. It just takes time and that, but I'm really pleased with the progress we're making. Okay.

Yeah, No I'd say, it's progressing the integration is progressing well as I commented on and you know its been three and a half oil coming on for months now, but yeah. We we still got work to do to get these guys fully integrated it just takes time and that but I'm really.

Speaker Change: Pleased with the progress we're making.

Unknown Executive: Okay, perfect. Thanks a lot, guys.

unknown: Okay, perfect. Thanks a lot, guys.

Speaker Change: Okay perfect. Thanks, a lot guys.

Unknown Executive: Thanks, Jaeson.

Thanks, Jason.

Unknown Executive: Thank you.

Speaker Change: Thank you.

Ted Jackson: The next question comes from Ted Jackson with Notland Securities. Please go ahead.

Ted Jackson: The next question comes from Ted Jackson with Northland Securities. Please go ahead. Good morning.

Speaker Change: The next question comes from Ted Jackson with Northland Securities. Please go ahead.

Ted Jackson: Good morning. Thanks for taking my questions. Hey, good morning, Ted. So my first question for you, on the $1.2 million in cost savings and the efforts you put there, can you put some meat on the bones in terms of how we'll see that, you know, find its way into the financial statements and the timeline for it, and then, Am I correct that, you know, kind of given the weaknesses and kind of front and semi that, you know, some of the efforts here are done around the, you know, the umbrella business that you guys have?

Unknown Executive: Good morning. Thanks for taking my questions.

Ted Jackson: Good morning, Thanks for taking my questions.

Unknown Executive: Hey, good morning, Ted.

Speaker Change: Hey, good morning, Ted.

Nick Grant: So my first question for you, on the 1.2 million in cost savings in the efforts you put there, can you put some meat on the bones in terms of how we'll see that, you know, find its way into the financial statements and the time length work? And then, am I correct that, you know, kind of given the weaknesses and kind of frontends to me that, you know, some of the efforts you're done around the, you know, the, the amber oil business that you guys have? Yeah, to answer the second part, yes, kind of tied to that part of the business, which we're highlighting, has certainly been softer than expected in terms of the linearity.

Speaker Change: So my first question for you on the $1 2 million in cost savings and the efforts you put there can you.

Speaker Change: Put some meat on the bones in terms of how we'll see that.

Speaker Change: Find its way into the financial statements and the timeline for it and then.

Speaker Change: Am I correct that you know kind of given the weakness is in kind of front end semi that you know some of the efforts here done around me.

Speaker Change: The ambarella <unk> business that you guys have.

Nick Grant: Yeah, to answer the second part, yes, kind of tied to that part of the business, which we're highlighting has certainly been softer than expected in terms of the linearity. I mean, that's commencing. So 1.2 million annualized. I mean, it's fairly linear, commencing Q3. We're not going to see a full impact in Q3, but a good portion of that, but that is an annualized linear number.

Speaker Change: Yeah to answer the second part, yes kind of tied to that part of the business, which we're highlighting it has certainly been softer than expected in terms of the linearity I mean, that's commencing so $1 2 million annualized.

Nick Grant: I mean, that's commencing. So 1.2 million annualized. I mean, it's fairly linear commencing Q3. We're not going to see a full impacting Q3, but a good portion of that. But that is an annualized linear number. Cool.

Speaker Change: I mean, it's fairly linear are commencing Q3, we're not going to see a full impact in Q3.

Speaker Change: But a good portion of that but that is an annualized linear number.

Speaker Change: Cool.

Ted Jackson: Number two, on the auto industry, you know, I mean, you can't, you did comment a bit about the, you know, it's slowed in terms of auto activity. How, when you get into the auto ED business, you know, and I mean, in your operating in it, how tied to your to, you know, like, Unit volume, if you would, is your business? You know, I mean, you've seen, you know, kind of a slowdown in terms of, call it, you know, consumer demand for autos.

Ted Jackson: Number two on auto industry. You know, I mean, you know, you did comment a bit about the, you know, that it's slowed in terms of auto activity, you know, activity. How, when you get into the auto ED business, you know, and, I mean, in your operating in it, how tied to your to, you know, like unit volume, if you would, is your business. You know, I mean, you've seen, you know, kind of a slowdown in terms of, you know, consumer demand for auto. There's, I mean, the press talks about like the slowdown in EDs all the time.

Speaker Change: Number two on the auto industry.

Speaker Change: You know you've got you did comment a bit about the.

Speaker Change: It slowed in terms of auto activity of activity.

Speaker Change: How when you get into the auto business, you know and I mean in your operating in it how tied to Europe to unit volume.

Ted Jackson: The press talks about the slowdown in EVs all the time, you know. I mean, is it like, as the auto industry's units ramp up, does that drive business for you? And as they go down, does it drive, you know, less business? I mean, I guess just kind of maybe a little color around like how to think.

Speaker Change: Volume. If you would is your business you know I mean, you've seen kind of a slowdown in terms of.

Speaker Change: Call it consumer demand for autos I mean, the press talks about like the slowdown in Evs. All the time I mean is it like is is the auto industry's units ramp up does that drive business for you and as they go down does it drive.

Nick Grant: You know, I mean, is it like, is as the auto industry's units ramp up? Does that drive business for you? And as they go down? Does it drive, you know, less?

Nick Grant: You know, I mean, is, you know, I guess just kind of maybe a little color around like how to think about that sector. Is a big sector for you now that you have this acquisition in, you know, in the fold. And, you know, kind of how to think about it from a macro is be, you know, kind of read the press. like that. Yeah, so as you can point it, Otto Levy is certainly a larger segment for us now with the affirmation on that. And you know, it really kind of varies across the businesses. The Otto portion associated with more of our process technologies is a mix of capacity expansion as well as efficiency upgrades of lines moving from traditional furnaces or welders to induction heating.

Speaker Change: Yes.

Speaker Change: You know me I guess, just kind of maybe a little color around like how to think about that sector has to be accepted for you now that you have this acquisition.

Speaker Change: In the fold and you know it.

Speaker Change: Kind of how to think about it from a macro kind of read the press and everything like that.

Nick Grant: Yeah, so as you pointed out, auto EV is certainly a larger segment for us now with the confirmation on that. And, you know, it really kind of varies across the businesses. The auto portion associated with more of our process technologies is a mix of capacity expansion as well as efficiency upgrades of lines moving from traditional furnaces or welders to induction heating. So we get a little bit of both there.

Speaker Change: Yeah. So as you pointed out <unk> is certainly a larger.

Speaker Change: Segment for US now with the information on that and you know it really kind of varies across the businesses.

Speaker Change: The auto.

Speaker Change: Portion associated with with more of our process technologies is a mix of of capacity expansion as well as <unk>.

Speaker Change: The efficiency upgrades of lines moving from traditional.

Speaker Change: Furnaces are welders to to Oh induction heating so when we get a little bit of both there and of course as demand is slower that's impacted.

Nick Grant: So we get a little bit of both there. And of course, as demand is slower, it's impacted the some of our, I would say our electronic tests platforms like our battery testers that we have with archaeologic. Those are our more geared towards production volumes out there. So you will see the more of a slowdown as demand in that space is impacted out there. And then from an automation perspective, most of their programs are tied around new product launches, model year, you know, upgrades on dash electronics and onboard computing systems and that. So not so much tied to an increase of the volumes on the cars, some of it there, but more of it's tied towards the next model year program and the release, et cetera, around those projects.

Nick Grant: And, of course, as demand is slower, it's impacted some of our electronic test platforms, like our battery testers that we have with AccuLogic. Those are more geared towards production volumes out there. So you will see more of a slowdown as demand in that space is impacted out there. And then from an AlphaMation perspective, most of their programs are tied around new product launches, model year upgrades on Dash electronics and onboard computing systems and that.

Speaker Change: The.

Speaker Change: Some of our I would say our electronic test platforms like our battery testers that we have with that logic. Those are are more geared towards production volumes.

Speaker Change: Out there so you will see see the.

Speaker Change: More of a slowdown as demand in that space.

Speaker Change: Is impacted out there and then from an affirmation perspective.

Speaker Change: Most of their programs are tied around new product launches.

Speaker Change: It'll year.

Speaker Change: Upgrades.

Speaker Change: Dash electronics, and onboard computing systems and that so not so much tied to our I'd say an increase of the.

Nick Grant: So not so much tied to, I'd say, an increase in volumes on the cars, some of it there, but more of it's tied to the next model year program and the release, et cetera, around those projects. So a little bit less volume-dependent, if you will.

Speaker Change: Volumes on the cars.

Speaker Change: Some of it there, but more of its tied towards the next model year program released et cetera around those projects a little bit less less volume dependent if you will.

Nick Grant: So a little bit less, less volume dependent, if you will.

Nick Grant: So if you were to look at, I mean, it's super interesting to me, but if we were to look in auto UV business, you know, in an obviously it's a moving target, but say, I don't know, I mean year to date, how much of the business is, you know, kind of tied to what's called product launches and things like that and how much of the business is tied more to, you know, production volume, if you would. Yeah, before automation, it was much more than the latter. I don't have exact numbers, but affirmations surely excuse us more towards the model year on that.

Ted Jackson: So if you were to look at, I mean, it's super interesting to me, but if we were to look at the auto EV business, you know, obviously it's a moving target, say I don't know. I mean, year to date, how much of the business is, you know, kind of tied to, let's call it, product launches and things like that? And how much of the business is tied more to, you know, production volume?

Speaker Change: So if you were to look at I mean, it's a super interesting to me, but a critical look in our auto business.

Speaker Change: And and obviously, it's a moving part let's say.

Speaker Change: I don't know I mean year to date how.

Speaker Change: How much of the businesses.

Speaker Change: Tied to let's call it product launches and things like that and how much of the business is tied more to <unk>.

Speaker Change: Production volume if you would.

Nick Grant: Yeah, before alfamation, it was much more the latter. And I don't have exact numbers, but alfamation, you know, surely skews us more towards the model year on that. So just at a high level, I would say it's got to be, you know, two thirds of model year releases. One third of production volume would be my gut feel. But I don't have hard numbers on that, Ted. Don't get any thoughts there. I think the two thirds rule makes sense.

Speaker Change: Yeah before al formation.

Speaker Change: Much more than the latter.

Speaker Change: And I don't have exact numbers, but al formations.

Shirley: Yeah, Shirley skews us more towards the the model year on that so just at a high level I would say is it's got to be you know two thirds a model year releases, one third production volume would be my gut feel but I don't have hard numbers on that Ted don't get any thoughts.

Nick Grant: So just at a high level, I would say it's got to be, you know, two thirds model year releases, one third, you know, production volume would be my gut feel, but I don't have hard numbers on that said. Don't get any thoughts.

Ted Jackson: Third I want I won't make it.

Ted Jackson: Okay, and then now my last question and maybe it's a little more fun. You know, on slide 11 on your presentation, you know, you highlighted, you know, a lot of diversification endeavors, you know, channel partner expansion, you know, automation customer synergies, and, you know, kind of space and green energy application expansion. And you know, that's interesting stuff, and you hit a little bit of it with some of the automation synergies in your presentation, but maybe take, you know, a couple of minutes and, you know, provide a little more color around each and some maybe some examples of some of the efforts on each of them.

Ted Jackson: Hum.

Ted Jackson: Okay, and then now my last question, and maybe it's a little more fun, you know, on slide 11 of your presentation, you highlighted a lot of diversification endeavors, you know, channel partner expansion, you know, affirmation customer synergies, and, you know, kind of space and green energy application expansion. And, you know, that's interesting stuff. And you hit a little bit of that with some of the affirmation synergies in your presentation.

Speaker Change: Okay and then my last my last question and maybe it's a little more fun.

Speaker Change: On slide 11 on your presentation.

Ted Jackson: You bet.

Speaker Change: You highlighted.

Speaker Change:

Speaker Change: A lot of diversification endeavors channel partner expansion affirmation customer synergies and kind of space in Green energy application expansion.

Speaker Change: Interesting stuff and you hit a little bit of it with some of the affirmation synergies in your presentation, but may be take.

Ted Jackson: But maybe take, you know, a couple of minutes and, you know, provide a little more color around each and some, maybe some examples of some of the efforts on each of them, since it's a, you know, it's, you know, it's an important part of the strategy for inTest. That's my last one. Thank you. Yeah.

Speaker Change: You know a couple of minutes and provide a little more color around each and some maybe some examples of some of the efforts on each of them. Since it's a you know it's you know.

Nick Grant: Since it's, you know, it's, you know, it's an important part of the strategy. That's the last one. Thank you. Yeah, sure. So geographic expansion, you know, and really aligning and building the channel partner network appropriately to ensure we got the proper coverage. You know, the teams have done a, I'd say, a great job really to start implementing more of a channel management, kind of channel accountability program really starting, you know, last year with, as we brought on some new leaders into the business there. And in this year, we've actually made a number of upgrades and channel partners out there.

Speaker Change: It's an important part of the strategy for Intest. That's my last one thank you.

Nick Grant: Yeah, sure. So, geographic expansion, you know, and really aligning and building the channel partner network appropriately to ensure we have the proper coverage. You know, the teams have done, I'd say, a great job, really, to start implementing more of a channel management, kind of channel accountability program, really starting, you know, last year with, as we brought on some new leaders into the business there. And this year, we've actually made a number of upgrades in channel partners out there.

Speaker Change: Yeah sure. So geographic expansion you know when really aligning.

Speaker Change: And building the channel partner network appropriately.

Speaker Change: Sure we got the proper coverage.

Speaker Change: The teams have done a I'd say.

Speaker Change: Great job really to start implementing more of a channel management.

Speaker Change: Kinda channel Accountability program really starting last year with.

Speaker Change: As we brought on some new leaders into the business there.

And this year, we've actually made a number of upgrades and channel partners out there so continuing to expand to ensure we're optimizing our go to market in certain areas there.

Nick Grant: So continuing to expand to ensure we're optimizing our go-to-market in certain areas there. The commercial space is an area we continue to see some success. Our image capture solutions are used in a number of, you know, space applications are at thermal testing chambers, seeing some nice activity there as well. And then from a green perspective, our induction heating teams done a nice job really targeting this message around, you know, induction being the green alternative to gas furnace, et cetera. And it's really gaining some traction out there. And we had some nice winds in that space.

Nick Grant: So, continuing to expand to ensure we're optimizing our go-to-market in certain areas. In the commercial space area, we continue to see some success. Our image capture solutions are used in a number of, you know, space applications.

Speaker Change: The commercial space is area, we continued to see some success our image.

Image capture solutions are used in a number of of space applications are.

Nick Grant: Our thermal testing chambers are seeing some nice activity there as well. And then from a green perspective, our induction heating team's done a nice job really targeting this message around, you know, induction being the green alternative to gas, furnace, etc. And it's really... gaining some traction out there, and we had some nice winds in that space. Our pipeline looks pretty healthy around these types of applications. But, you know, I would just say, in general, industrial, as a comment, has been sluggish, more so driven by the higher cost of capital, the clear project hurdles, delays in getting sign-offs on projects, etc., etc. But the programs are there, and I think we'll start seeing more of those flowing through here.

Speaker Change: Thermal.

Speaker Change: Testing.

Speaker Change: Chambers.

Speaker Change: Some nice activity there as well and then from a green perspective, our induction heating team's done a nice job really targeting this message around induction being the green alternative to gas.

Speaker Change: Gas furnace et cetera, and that's really it.

Speaker Change: Gaining some traction out there and we had some nice wins in that space our pipeline looks.

Nick Grant: Our pipeline looks pretty healthy around these type applications.

Speaker Change: Pretty healthy around these are these type applications, but you know.

Nick Grant: But, you know, I would just say in general, industrial as a common, it's been sluggish, more so driven by the higher cost of capital, you know, the clear project hurdles, delays, and getting to sign off some projects, et cetera, et cetera. But the programs are there, and I think we'll start seeing an alum. So you're more of those flowing through here. All right.

Speaker Change: I would just say in general industrial as the comment has been sluggish more so driven by.

Speaker Change: The higher cost of capital they need unclear Park project hurdles delays in getting sign off some projects et cetera, et cetera, but the programs are there and I think we'll start seeing them alone.

Speaker Change: Any more of those flowing through here.

Speaker Change: Okay.

Ted Jackson: All right. Hey, thank you very much for the time. I'll step out of line.

Ted Jackson: Hey, thank you very much for the time. I'll step that one. Thanks, dad.

Speaker Change: Alright, Thank you very much for the time I'll step out of line.

unknown: Yeah, thanks, Ted. Thank you. A Reminder

Ted Jackson: Yeah. Thanks Ted.

Unknown Executive: Thank you.

Speaker Change: Thank you.

Operator: A reminder to all participants that you may press star 1 to ask a question. There are no further questions at this time. I would like to turn the floor back over to Nick Grant for closing comments.

Unknown Executive: Reminded to all participants that you may press star one to ask a question.

Speaker Change: A reminder to all participants that you May press star one to ask a question.

Speaker Change: Okay.

Unknown Executive: There are no further questions at this time.

Speaker Change: There are no further questions at this time I would like to turn the floor back over to Nick Grant for closing comments.

Nick Grant: I would like to turn the floor back over to Nick Grant for closing comments. Thank you, Ziko. We appreciate you joining us today, and thank you for your time. We welcome the opportunity to answer any further questions you may have.

Nick Grant: Thank you Zico.

Nick Grant: We appreciate you joining us today and thank you for your time, and we welcome the opportunity to answer any further questions you may have. On slide 12, you can find the details regarding the replay of this call and a list of upcoming events we will be participating in. I hope to have a chance to meet with you at a conference or two. Thanks again for participating, and have a great day! Thank you. This concludes today's teleconference.

Nick Grant: We appreciate you joining us today and thank you for your time and we welcome the opportunity to answer any further questions you may have on.

Unknown Executive: On slide 12, you can find the details regarding the replay of this call and a list of upcoming events we will be participating in. I hope to have a chance to meet with you at a conference or two. Thanks again for participating, and have a great day. Thank you.

On Slide 12, you can find the details regarding the replay of this call and a list of upcoming events, we will be participating in.

I hope to have a chance to meet with you at a conference or two.

Nick Grant: Thanks, again for participating and have a great day.

Nick Grant: Thank you this.

Unknown Executive: This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation. ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶

Operator: This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.

Speaker Change: This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.

Speaker Change: [music].

unknown: BF-WATCH TV 2021