inTest Corporation

Greetings and welcome to the Intest Corporation fourth quarter 2024 financial results. At this time, all participants are in listen-only mode. If anyone should require operator assistance, please press star zero on your telephone keypad. A question and answer session will follow the formal presentation. You may be placed into question queue at any time by pressing star one on your telephone keypad. As a reminder, this conference is being recorded. It's now my pleasure to introduce your host, Sean Southern. Please go ahead, Sean.

Good morning, everyone. We certainly appreciate your interest in Intest Corporation, and thank you for sharing your time with us today. Joining me on our call are Nick Grant, our President and Chief Executive Officer, and Duncan Gilmore, our Chief Financial Officer and Treasurer. You should have received the earnings release that 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, intest.com. Please turn to slide two as I 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, uncertainties, and other factors that could cause actual events to differ materially from what is stated here today. These risks, uncertainties, and other factors are provided in the earnings release, as well as other documents filed by the company with the Securities and Exchange Commission. These documents can be found on our website or at sec.gov. Also, as covered on slide three, management will refer to some non-GAAP financial measures. We believe these 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 four. Nick, I'll turn the call over to you.

Thank you, Sean, and good morning, everyone. Thanks for joining us for our fourth quarter 2024 earnings call. I'm pleased to report record fourth quarter revenue of $36.6 million. And notably, for 2024, we delivered our third consecutive year of record revenue at $130.7 million. So, I'd like to start by acknowledging the entire Intest team and expressing my sincere appreciation for their commitment to our strategy and their ongoing efforts across the globe. These efforts enabled the record revenue and strong operational results, further validating the effectiveness of our market and customer diversification strategy. as well as our focus on innovation. Full-year sales growth of 6% was driven by the $25 million contribution from the affirmation acquisition, as well as strong demand from our auto EV, defense aero, and life sciences markets. The combination of the acquisition and higher demand in these targeted markets more than offset the measurable 26% decline we experienced in SEMI. We believe that delivering growth against such a severe headwind in SEMI is proof of the success of our strategy to evolve in-test into a more diversified test and process technology solutions business. In fact, it was our innovative test solutions that delivered growth in both auto EV and defense aerospace for the year. Specifically, revenue growth in AutoEV was driven by the advanced testing technologies we acquired with Alphamation that are used to qualify infotainment systems for vehicles. We also saw increased demand for the technology we offer for testing battery packs that are used in various end products, not just EVs. Our flying probe automated test systems are used in battery pack testing, to support the megatrend of electrification of a broad variety of equipment such as electric boats and drones. Our systems are frequently preferred by customers because they provide tremendous flexibility and market-leading test coverage, which increases quality assurance and throughput. In the fourth quarter, we received several repeat orders for these systems, and we won back a customer who had returned after trying a competitive solution. While the pipeline of opportunities for this technology entering 2025 is healthy, we are carefully monitoring customer spending given the ever-changing tariff environment. For the quarter, our year-over-year core business sales growth in defense aero, semi-backend, and life sciences more than offset the decline in industrials. We also benefited from approximately 2 million in previously delayed shipments to life sciences, defense aero, and auto markets due to the logistic issues in the third quarter. Record sales to the defense aero market was driven by our innovative environmental and test technologies, which address the demanding requirements for these customers. Gross profit in the fourth quarter decreased sequentially, reflecting a $1.6 million charge to cost of goods sold related to purchase price accounting for the affirmation acquisition, as well as mix. Duncan will provide more details on the inventory step-up charge shortly. Let me now review orders and backlog on slide five. Fourth quarter orders increased 11% year over year. Back-end SEMI continued to show signs of improvement, offsetting persistent weakness related to our silicon carbide gallium nitride applications in the front end to drive a $2.4 million increase in overall SEMI orders. The $1.7 million increase in orders for auto EV included $1.1 million from alpha-mations. Demand in life sciences more than doubled to a record 2.3 million and reflected sizable orders for our induction heating solutions and multiple medical applications. Sequentially, orders were up 9%, marking our third consecutive quarter of improvement with strength in semi and life sciences. Auto EV demand slowed, reflecting continued softness in the end market. While orders for Defense Aero were down in the quarter, we continue to see strong interest for our solutions in this market. In the quarter, we received orders from multiple customers, including several prime defense contractors, commercial space companies, and NASA. Backlog at the end of 2024 was $39.5 million and included $7.4 million from AlphaMation. Backlog was $600,000 lower from the prior year period and down $6 million sequentially, reflecting the timing of alpha-mation shipments. With that, let me now turn it over to Duncan to review the financials and outlook in more detail. Duncan, over to you.