INTT -- some tidbits from my 2 hour meeting with the CFO on 7/8/10 in no particular order...
1. They keep no finished goods on hand. Everything produced is shipped that same day. When I was there I saw at least 4 crates that was being shipped "that day" that had $50,000 to $100,000 in product each one. And it was a slow day considering the holiday week a lot of employees used vacation time.
2. Gross profit margin goal = 50%
3. Pre-announcement of earnings is July 27. Earnings is August 11.
4. 80% of sales are shipped to Southeast Asia.
5. They were involved with the testing of the iphone 4 semiconductor chip.
6. They are in the process of finalizing a deal to move the main facility up the road which will save around $300k/year in rent and energy costs. There will be zero cost of the move because they get the first 3 months of rent free which will cover the moving cost. They are working on a similar cost-savings deal with two other facilities (Boston and San Jose, CA) -- main reason is taking advantage of the steep discounts commercial real estate is offering these days. They can upgrade to a better facility in a "better neighborhood" while saving big bucks and getting their move essentially paid for.
7. Their manufacturing margins are around 70%. Their 3rd party margins are around 50%. Occasionally they get projects where they essentially "broker" a deal and do very little with it and have very little cost other than to be the middle man. They really like these projects because it's quick and easy money. As an example, they may buy for $140,000 and sell for $280,000 in a small deal. However, it wasn't clear to me why their margins last quarter were less than 50% when their manufacturing margins are 70% Perhaps that includes things like liability insurance which they mentioned they only have on manufacturing vs. don't on 3rd party. I should have asked. I will send a follow up question to him.
8. Manufacturing capacity without having to add employees is around $20 million per quarter. Capacity can be increased by adding more employees without adding manufacturing space. Also 3rd party deals has no capacity since they involve very little work.
9. One of their two biggest competitors (Microhandling?) went belly up in 2009. This should or did give them more market share and is good for at least the short term.
10. Operations themselves were rather small and simple, yet super high-tech, to my untrained eye. Headquarters were excessively humble (dead grass, fence badly in need of painting, parking lot pavement very beat up, etc.) which he expressed to me was the result of them not wanting to spend one dime on anything unless it helps their bottom line in some way. Their customers don't care one iota about the headquarters so they do the bare minimum of upkeep. My comment -- reminds me of what Peter Lynch liked about Taco Bell in the early days before it became a household name. Humble headquarters is a good sign that management is very good at keeping costs down in every area.
News 
Market Data 
Discover 
