EX-99.1 2 ex_707064.htm EXHIBIT 99.1 ex_707064.htm

Exhibit 99.1

 

intestnews.jpg

 

804 East Gate Drive, Suite 200, Mount Laurel, NJ 08054

 

for immediate release 

 

inTEST Reports 4% Revenue Growth for Second Quarter 2024

 

 

●

Revenue increased 4% year-over-year and 14% sequentially to a record $34.0 million due to the acquisition of Alfamation
 

●

Market diversification strategy helped to offset continued weakness in semiconductor industry
 

●

Orders1 improved 15% sequentially to $26.2 million; excluding Alfamation, orders improved 10% sequentially
 

●

Earnings per diluted share was $0.02 while adjusted earnings per diluted share2 was $0.08
 

●

Rightsizing actions result in $1.2 million of annualized savings to be realized beginning in the third quarter
 

●

Adjusts 2024 guidance to reflect ongoing market conditions

 

MT. LAUREL, NJ – August 2, 2024 -- inTEST Corporation (NYSE American: INTT), a global supplier of innovative test and process technology solutions for use in manufacturing and testing in key target markets which include automotive/EV, defense/aerospace, industrial, life sciences, security, and semiconductor (“semi”), today announced financial results for the quarter ended June 30, 2024. Results include Alfamation S.p.A. (“acquisition” or “Alfamation”) from the date of the acquisition, which was March 12, 2024. Alfamation is included in the Electronic Test division.

 

Nick Grant, President and CEO, commented, “While we are focused on innovating with new products, expanding our channels to market and adding new customers, we are nonetheless facing challenging market headwinds that now appear to be more persistent than we had anticipated earlier this year. We benefitted from the addition of Alfamation in the quarter which contributed $9.7 million in revenue. This was an unusually strong quarter for the acquisition given the timing of the sizeable backlog we acquired. We are very pleased with the integration progress and the synergies we are already beginning to realize. The teams are working on several opportunities with technology sharing and cross selling across our businesses. The addition of Alfamation more than offset the weakness in the semiconductor industry, and specifically the dramatic slowdown in the front-end semi market that we have experienced this year. Sales in the semi market were down 46%, or $8.7 million, year-over-year and 32%, or $4.8 million sequentially.”

 

He added, “We continue to see weak order levels in front-end semi as we believe the industry in the near term has sufficient capacity for silicon carbide production. Our long-term view on the growth in silicon carbide adoption remains intact. Encouragingly, back-end semi seems to be stabilizing. Nonetheless, given ongoing broader market conditions, we are taking actions to reduce costs and better align the businesses with current order levels. Thus far we have executed on $1.2 million in annualized cost reductions that we expect to begin to be realized in the second half of the year. We are also continuing to identify further opportunities to reduce costs, drive operational efficiencies and improve working capital. The weak level of orders in the quarter and less visibility into a second half recovery has resulted in resetting expectations for 2024.”

 

1 Orders and backlog are key performance metrics. See “Key Performance Indicators” below for important disclosures regarding inTEST’s use of these metrics.
2 Adjusted earnings per diluted share is a non-GAAP financial measure. Further information can be found under “Non-GAAP Financial Measures.” See also the reconciliations of GAAP financial measures to non-GAAP financial measures that accompany this press release.

 

-MORE-

inTEST Reports 4% Revenue Growth for Second Quarter 2024

Page 2 of 12

August 2, 2024

 

Second Quarter 2024 Review (see revenue by market and by segments in accompanying tables)

 

   

Three Months Ended

  

($ in 000s)

                  

Change

            

Change

  
   

6/30/2024

    

6/30/2023

    

$

    

%

    

3/31/2024

    

$

    

%

  

Revenue

   $ 33,991     $ 32,558     $ 1,433       4.4 %   $ 29,824     $ 4,167       14.0 %

Gross profit

   $ 13,797     $ 15,030     $ (1,233 )     -8.2 %   $ 13,076     $ 721       5.5 %

Gross margin

    40.6 %     46.2 %                     43.8 %                

Operating expenses (incl. intangible amort.)

   $ 13,461     $ 11,686     $ 1,775       15.2 %   $ 12,584     $ 877       7.0 %

Operating income

   $ 336     $ 3,344     $ (3,008 )     -90.0 %   $ 492     $ (156 )     -31.7 %

Operating margin

    1.0 %     10.3 %                     1.6 %                

Net earnings

   $ 230     $ 2,793     $ (2,563 )     -91.8 %   $ 662     $ (432 )     -65.3 %

Net margin

     0.7 %     8.6 %                     2.2 %                

Earnings per diluted share (“EPS”)

   $ 0.02     $ 0.24     $ (0.22 )     -91.7 %   $ 0.05     $ (0.03 )     -60.0 %

Adjusted net earnings (Non-GAAP)3

   $ 959     $ 3,227     $ (2,268 )     -70.3 %   $ 1,162     $ (203 )     -17.5 %

Adjusted EPS (Non-GAAP)2

   $ 0.08     $ 0.28     $ (0.20 )     -71.4 %   $ 0.10     $ (0.02 )     -20.0 %

Adjusted EBITDA (Non-GAAP)2

   $ 2,154     $ 4,795     $ (2,641 )     -55.1 %   $ 1,811     $ 343       18.9 %

Adjusted EBITDA margin (Non-GAAP)2

     6.3 %     14.7 %                     6.1 %                

 

 

Compared with the prior-year period, second quarter revenue increased $1.4 million. The acquisition contributed $9.7 million in revenue. Auto/EV revenue increased $9.2 million primarily due to the acquisition. This more than offset the $8.7 million decrease in sales to the semi market. Additionally, revenue in life sciences increased $1.1 million which also benefited from the acquisition. Industrial revenue increased
$0.6 million, or 22%, and helped to offset the $0.7 million combined decline in the defense/aerospace, security and other markets.

 

Sequentially, revenue increased by $4.2 million as revenue from Alfamation and improvements in defense/aerospace, life sciences, and security more than offset the $4.8 million decline in the semi market.

 

Gross margin was 40.6% in the second quarter, a 560-basis point contraction compared with the prior-year period primarily due to product mix, including the impact of the acquisition, and lower volume in the organic business affecting absorption rates. Operating expenses increased over the prior-year period primarily because of $2.4 million of incremental expenses attributable to Alfamation, including $0.4 million of amortization. Excluding the acquisition, operating expenses were down approximately $0.7 million reflecting lower bonus accruals, lower commission expense, cost reduction efforts and reduced corporate development expenses.

 

Higher interest expense from increased borrowings was somewhat offset by higher other income. Net earnings for the quarter were $0.2 million, or $0.02 per diluted share. Adjusted net earnings (Non-GAAP)3 were
$1.0 million, or $0.08 adjusted EPS (Non-GAAP) 2.

 

Balance Sheet and Cash Flow Review

 

During the quarter, the Company used $5.1 million in cash from operations which included annual bonus payments and higher cash tax requirement. Cash and cash equivalents at the end of the second quarter of 2024 were $20.4 million, down $6.9 million at the end of the first quarter of 2024. Capital expenditures were $0.3 million in the second quarter of 2024, similar to the prior-year period.

 

3 Adjusted net earnings, adjusted EPS, adjusted EBITDA, and adjusted EBITDA margin are non-GAAP financial measures. Further information can be found under “Non-GAAP Financial Measures.” See also the reconciliations of GAAP financial measures to non-GAAP financial measures that accompany this press release.

 

-MORE-

inTEST Reports 4% Revenue Growth for Second Quarter 2024

Page 3 of 12

August 2, 2024

 

At quarter end, total debt was $21.1 million, up $9.1 million from December 31, 2023. The increase from year end reflects the incremental debt inherited with the acquisition. The Company repaid approximately
$1.1 million in debt in the quarter. At June 30, 2024, the Company had $30 million available under its delayed draw term loan facility and no borrowings under the $10 million revolving credit facility. On May 2, 2024, the Company extended the maturity of its delayed draw term loan and revolving credit facility to May 2, 2031. In addition, the allowed window to draw on the term loan was extended to May 2, 2026.

 

Second Quarter 2024 Orders and Backlog1 (see orders by market in accompanying tables)

 

   

Three Months Ended

  

($ in 000s)

                  

Change

            

Change

  
   

6/30/2024

    

6/30/2023

    

$

    

%

    

3/31/2024

    

$

    

%

  

Orders

   $ 26,182     $ 31,431     $ (5,249 )     -16.7 %   $ 22,799     $ 3,383       14.8 %

Backlog (at quarter end)

  $ 47,672     $ 44,578     $ 3,094       6.9 %   $ 55,481     $ (7,809 )     -14.1 %

 

Second quarter orders of $26.2 million, including $3.2 million in orders attributable to the acquisition, declined 17% versus the prior-year period, but improved 15%, or $3.4 million, compared with the first quarter of 2024. The year-over-year decline reflects general softness across most markets including $3.7 million, or 25%, lower orders from the semi market. Orders from the industrial market were down $2.3 million, or 40%, against a strong comparable. Excluding the acquisition in both quarters, the 10%, or $2.0 million, sequential improvement reflects increases in back-end semi, industrial, life sciences, security and other markets more than offsetting weakness in automotive/EV.

 

Backlog at June 30, 2024, was $47.7 million and included $16.3 million of backlog associated with the acquisition. Approximately 50% of the backlog is expected to ship beyond the third quarter of 2024.

 

Third Quarter and Full Year 2024 Outlook

 

Revenue for the third quarter of 2024 is expected to be slightly lower than the second quarter while gross margin is expected to improve somewhat based on better mix. Third quarter 2024 operating expenses, including amortization, are expected to be similar to the second quarter. Intangible asset amortization is expected to be approximately $0.9 million pre-tax, or approximately $0.7 million after tax. Interest expense is expected to be approximately $220,000 for the quarter.

 

Third quarter 2024 EPS and adjusted EPS (Non-GAAP)2 are expected to be similar to the second quarter based on the same number of weighted average shares.

 

Including first half 2024 results, the Company has updated its full year 2024 expectations as follows:

 

(As of August 2, 2024)

Updated Guidance

Previous Guidance

Revenue

$128 million to $133 million

$140 million to $150 million

Gross margin

42% to 43%

44% to 46%

Operating expenses

$53 million to $54 million

$56 million to $58 million

Intangible asset amort expense

Approximately $3.3 million

Approximately $5 million

Intangible asset amort exp. After tax

Approximately $2.7 million

Approximately $4.1 million

Effective tax rate

17% to 19%

17% to 19%

Capital expenditures

1% to 2% of sales

1% to 2% of sales

 

-MORE-

inTEST Reports 4% Revenue Growth for Second Quarter 2024

Page 4 of 12

August 2, 2024

 

The foregoing guidance is based on management’s current views with respect to operating and market conditions and customers’ forecasts. It also assumes macroeconomic conditions remain unchanged through the end of the year. Actual results may differ materially from what is provided here today as a result of, among other things, the factors described under “Forward-Looking Statements” below. Further information about non-GAAP measures can be found under “Non-GAAP Financial Measures” and the reconciliations of GAAP financial measures to non-GAAP financial measures that accompany this press release.

 

Conference Call and Webcast

 

The Company will host a conference call and webcast today at 8:30 a.m. ET. During the conference call, management will review the financial and operating results and discuss inTEST’s corporate strategy and outlook. A question-and-answer session will follow. To listen to the live call, dial (201) 689-8263. In addition, the webcast and slide presentation may be found at intest.com/investor-relations.

 

A telephonic replay will be available from 12:30 p.m. ET on the day of the call through Friday, August 9, 2024. To listen to the archived call, dial (412) 317-6671 and enter replay pin number 13746896. The webcast replay can be accessed via the investor relations section of intest.com, where a transcript will also be posted once available.

 

About inTEST Corporation

 

inTEST Corporation is a global supplier of innovative test and process technology solutions for use in manufacturing and testing in key target markets including automotive/EV, defense/aerospace, industrial, life sciences, and security, as well as both the front-end and back-end of the semiconductor manufacturing industry. Backed by decades of engineering expertise and a culture of operational excellence, inTEST solves difficult thermal, mechanical, and electronic challenges for customers worldwide while generating strong cash flow and profits. inTEST’s strategy leverages these strengths to grow organically and with acquisitions through the addition of innovative technologies, deeper and broader geographic reach, and market expansion. For more information, visit www.intest.com.

 

Non-GAAP Financial Measures and Forward-Looking Non-GAAP Financial Measures

In addition to disclosing results that are determined in accordance with generally accepted accounting practices in the United States (“GAAP”), we also disclose non-GAAP financial measures. These non-GAAP financial measures consist of adjusted net earnings, adjusted earnings per diluted share (adjusted EPS), adjusted EBITDA, and adjusted EBITDA margin.

 

Definition of Non-GAAP Measures

The Company defines these non-GAAP measures as follows:

 

─

Adjusted net earnings is derived by adding acquired intangible amortization, adjusted for the related income tax expense (benefit), to net earnings.
 

─

Adjusted earnings per diluted share (adjusted EPS) is derived by dividing adjusted net earnings by diluted weighted average shares outstanding.
 

─

Adjusted EBITDA is derived by adding acquired intangible amortization, net interest expense, income tax expense, depreciation, and stock-based compensation expense to net earnings.
 

─

Adjusted EBITDA margin is derived by dividing adjusted EBITDA by revenue.

These results are provided as a complement to the results provided in accordance with GAAP. Adjusted net earnings and adjusted earnings per diluted share (adjusted EPS) are non-GAAP financial measures presented to provide investors with meaningful, supplemental information regarding our baseline performance before acquired intangible amortization charges as management believes this expense may not be indicative of our underlying operating performance. Adjusted EBITDA and adjusted EBITDA margin are non-GAAP financial measures presented primarily as a measure of liquidity as they exclude non-cash charges for acquired intangible amortization, depreciation and stock-based compensation. In addition, adjusted EBITDA and adjusted EBITDA margin also exclude the impact of interest income or expense and income tax expense or benefit, as management believes these expenses may not be indicative of our underlying operating performance.

 

-MORE-

inTEST Reports 4% Revenue Growth for Second Quarter 2024

Page 5 of 12

August 2, 2024

 

Management’s Use of Non-GAAP Measures

The non-GAAP financial measures presented in this press release are used by management to make operational decisions, to forecast future operational results, and for comparison with our business plan, historical operating results and the operating results of our peers. Reconciliations from net earnings and earnings per diluted share (EPS) to adjusted net earnings and adjusted earnings per diluted share (adjusted EPS) and from net earnings and net margin to adjusted EBITDA and adjusted EBITDA margin, are contained in the tables below.

 

Limitations of adjusted net earnings, adjusted earnings per diluted share (adjusted EPS), adjusted EBITDA, and adjusted EBITDA margin

Each of our non-GAAP measures have limitations as analytical tools. They should not be viewed in isolation or as a substitute for GAAP measures of earnings or cash flows. Limitations may include the cash portion of interest expense, income tax (benefit) provision, charges related to intangible asset amortization and stock-based compensation expense. These items could significantly affect our financial results.

 

Management believes these Non-GAAP financial measures are important in evaluating our performance, results of operations, and financial position. We use non-GAAP financial measures to supplement our GAAP results to provide a more complete understanding of the factors and trends affecting our business.

 

Adjusted net earnings, adjusted earnings per diluted share (adjusted EPS), adjusted EBITDA, and adjusted EBITDA margin are not alternatives to net earnings, earnings per diluted share or margin as calculated and presented in accordance with GAAP. As such, they should not be considered or relied upon as substitutes or alternatives for any such GAAP financial measure. We strongly urge you to review the reconciliations of adjusted net earnings, adjusted earnings per diluted share (adjusted EPS), adjusted EBITDA, and adjusted EBITDA margin along with our financial statements included elsewhere in this press release. We also strongly urge you not to rely on any single financial measure to evaluate our business. In addition, because adjusted net earnings, adjusted earnings per diluted share (adjusted EPS), adjusted EBITDA, and adjusted EBITDA margin are not measures of financial performance under GAAP and are susceptible to varying calculations, the adjusted net earnings, adjusted earnings per diluted share (adjusted EPS), adjusted EBITDA, and adjusted EBITDA margin measures as presented in this press release may differ from and may not be comparable to similarly titled measures used by other companies.

 

Forward-Looking Non-GAAP Financial Measures

This release includes certain forward-looking non-GAAP financial measures, including estimated adjusted earnings per diluted share (estimated adjusted EPS). We have provided these non-GAAP measures for future guidance for the same reasons that were outlined above for historical non-GAAP measures.

 

We have reconciled non-GAAP forward-looking estimated adjusted EPS to its most directly comparable GAAP measure. The reconciliation from estimated net earnings per diluted share (EPS) to estimated adjusted EPS is contained in the table below.

 

Key Performance Indicators

In addition to the foregoing non-GAAP measures, management uses orders and backlog as key performance metrics to analyze and measure the Company’s financial performance and results of operations. Management uses orders and backlog as measures of current and future business and financial performance, and these may not be comparable with measures provided by other companies. Orders represent written communications received from customers requesting the Company to provide products and/or services. Backlog is calculated based on firm purchase orders we receive for which revenue has not yet been recognized. Management believes tracking orders and backlog are useful as it often is a leading indicator of future performance. In accordance with industry practice, contracts may include provisions for cancellation, termination, or suspension at the discretion of the customer.

 

Given that each of orders and backlog are operational measures and that the Company’s methodology for calculating orders and backlog does not meet the definition of a non-GAAP measure, as that term is defined by the U.S. Securities and Exchange Commission, a quantitative reconciliation for each is not required or provided.

 

-MORE-

inTEST Reports 4% Revenue Growth for Second Quarter 2024

Page 6 of 12

August 2, 2024

 

Forward-Looking Statements

This press release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. These statements do not convey historical information but relate to predicted or potential future events and financial results, such as statements of the Company’s plans, strategies and intentions, or our future performance or goals, that are based upon management’s current expectations. These forward-looking statements can often be identified by the use of forward-looking terminology such as “believe,” “continuing,” “could,” “expects,” “guidance,” “may,” “outlook,” “will,” “should,” “plan,” “potential,” “forecasts,” “targets,” “estimates,” “opportunities,” or similar terminology. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements. Such risks and uncertainties include, but are not limited to, any mentioned in this press release as well as the Company’s ability to execute on its 5-Point Strategy, realize the potential benefits of acquisitions and successfully integrate any acquired operations, grow the Company’s presence in its key target and international markets, manage supply chain challenges, convert backlog to sales and to ship product in a timely manner; the success of the Company’s strategy to diversify its markets; the impact of inflation on the Company’s business and financial condition; indications of a change in the market cycles in the semi market or other markets served; changes in business conditions and general economic conditions both domestically and globally including rising interest rates and fluctuation in foreign currency exchange rates; changes in the demand for semiconductors; access to capital and the ability to borrow funds or raise capital to finance potential acquisitions or for working capital; changes in the rates and timing of capital expenditures by the Company’s customers; and other risk factors set forth from time to time in the Company’s Securities and Exchange Commission filings, including, but not limited to, the Annual Report on Form 10-K for the year ended December 31, 2023. Any forward-looking statement made by the Company in this press release is based only on information currently available to management and speaks to circumstances only as of the date on which it is made. The Company undertakes no obligation to update the information in this press release to reflect events or circumstances after the date hereof or to reflect the occurrence of anticipated or unanticipated events, except as required by law.

 

 

Contacts:

inTEST Corporation

Investors:

Duncan Gilmour

Deborah K. Pawlowski

Chief Financial Officer and Treasurer

Kei Advisors LLC

Tel: (856) 505-8999

dpawlowski@keiadvisors.com
 

Tel: (716) 843-3908

 

 

 

– FINANCIAL TABLES FOLLOW –

 

-MORE-

inTEST Reports 4% Revenue Growth for Second Quarter 2024

Page 7 of 12

August 2, 2024

 

inTEST CORPORATION

Consolidated Statements of Operations

(In thousands, except share and per share data)

(Unaudited)

 

   

Three Months Ended
June 30,

    

Six Months Ended
June 30,

  
   

2024

    

2023

    

2024

    

2023

  
                                 

Revenue

   $ 33,991     $ 32,558     $ 63,815     $ 64,477  

Cost of revenue

     20,194       17,528       36,942       34,395  

Gross profit

     13,797       15,030       26,873       30,082  
                                 

Operating expenses:

                                

Selling expense

     4,105       4,661       8,695       9,116  

Engineering and product development expense

     2,218       1,983       4,200       3,887  

General and administrative expense

     7,138       5,042       13,150       10,217  

Total operating expenses

     13,461       11,686       26,045       23,220  
                                 

Operating income

     336       3,344       828       6,862  

Interest expense

     (253 )     (176 )     (393 )     (358 )

Other income

     213       197       648       255  
                                 

Earnings before income tax expense

     296       3,365       1,083       6,759  

Income tax expense

     66       572       191       1,149  
                                 

Net earnings

   $ 230     $ 2,793     $ 892     $ 5,610  
                                 

Earnings per common share - basic

   $ 0.02     $ 0.25     $ 0.07     $ 0.51  
                                 

Weighted average common shares outstanding - basic

     12,234,599       11,241,183       12,130,480       10,998,456  
                                 

Earnings per common share - diluted

   $ 0.02     $ 0.24     $ 0.07     $ 0.49  
                                 

Weighted average common shares and common share equivalents outstanding - diluted

     12,330,280       11,696,569       12,244,289       11,392,617  

 

-MORE-

inTEST Reports 4% Revenue Growth for Second Quarter 2024

Page 8 of 12

August 2, 2024

 

inTEST CORPORATION

Consolidated Balance Sheets

(In thousands)

 

   

June 30,

    

December 31,

  
   

2024

    

2023

  
   

(Unaudited)

          

ASSETS

                

Current assets:

                

Cash and cash equivalents

  

$

20,370

    

$

45,260

  

Trade accounts receivable, net of allowance for credit losses of $416 and $474, respectively

    

30,066

      

18,175

  

Inventories

    

28,563

      

20,089

  

Prepaid expenses and other current assets

    

2,379

      

2,254

  

Total current assets

    

81,378

      

85,778

  

Property and equipment:

                

Machinery and equipment

    

8,900

      

7,118

  

Leasehold improvements

    

4,001

      

3,601

  

Gross property and equipment

    

12,901

      

10,719

  

Less: accumulated depreciation

    

(8,372

)

    

(7,529

)

Net property and equipment

    

4,529

      

3,190

  

Right-of-use assets, net

    

11,561

      

4,987

  

Goodwill

    

34,868

      

21,728

  

Intangible assets, net

    

27,058

      

16,596

  

Deferred tax assets

    

-

      

1,437

  

Restricted certificates of deposit

    

100

      

100

  

Other assets

    

1,060

      

1,013

  

Total assets

  

$

160,554

    

$

134,829

  
                 

LIABILITIES AND STOCKHOLDERS' EQUITY

                

Current liabilities:

                

Current portion of Term Note and other long-term debt

  

$

11,989

    

$

4,100

  

Current portion of operating lease liabilities

    

1,852

      

1,923

  

Accounts payable

    

8,281

      

5,521

  

Accrued wages and benefits

    

4,794

      

4,156

  

Accrued professional fees

    

1,100

      

1,228

  

Customer deposits and deferred revenue

    

5,485

      

3,797

  

Accrued sales commissions

    

804

      

1,055

  

Domestic and foreign income taxes payable

    

-

      

1,038

  

Other current liabilities

    

1,945

      

1,481

  

Total current liabilities

    

36,250

      

24,299

  

Operating lease liabilities, net of current portion

    

10,064

      

3,499

  

Term Note and other long-term debt, net of current portion

    

9,110

      

7,942

  

Contingent consideration

    

814

      

1,093

  

Deferred revenue, net of current portion

    

1,256

      

1,331

  

Deferred tax liabilities

    

1,790

      

-

  

Other liabilities

    

1,768

      

384

  

Total liabilities

    

61,052

      

38,548

  

Commitments and Contingencies

                

Stockholders' equity:

                

Preferred stock, $0.01 par value; 5,000,000 shares authorized; no shares issued or outstanding

    

-

      

-

  

Common stock, $0.01 par value; 20,000,000 shares authorized; 12,591,662 and 12,241,925 shares issued, respectively

    

126

      

122

  

Additional paid-in capital

    

57,660

      

54,450

  

Retained earnings

    

43,088

      

42,196

  

Accumulated other comprehensive earnings

    

(430

)

    

414

  

Treasury stock, at cost; 79,382 and 75,758 shares, respectively

    

(942

)

    

(901

)

Total stockholders' equity

    

99,502

      

96,281

  

Total liabilities and stockholders' equity

  

$

160,554

    

$

134,829

  

 

-MORE-

inTEST Reports 4% Revenue Growth for Second Quarter 2024

Page 9 of 12

August 2, 2024

 

inTEST CORPORATION

Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

 

   

Six Months Ended

June 30,

  
   

2024

    

2023

  

CASH FLOWS FROM OPERATING ACTIVITIES

                

Net earnings

  

$

892

    

$

5,610

  

Adjustments to reconcile net earnings to net cash provided by (used in) operating activities:

                

Depreciation and amortization

    

2,806

      

2,350

  

Provision for excess and obsolete inventory

    

306

      

266

  

Foreign exchange (gain) loss

    

13

      

(47

)

Amortization of deferred compensation related to stock-based awards

    

913

      

1,079

  

Discount on shares sold under Employee Stock Purchase Plan

    

15

      

14

  

Loss on disposal of property and equipment

    

19

      

98

  

Deferred income tax expense (benefit)

    

347

      

(685

)

Changes in assets and liabilities:

                

Trade accounts receivable

    

(5,693

)

    

(372

)

Inventories

    

1,966

      

(693

)

Prepaid expenses and other current assets

    

1,296

      

212

  

Other assets

    

(118

)

    

2

  

Operating lease liabilities

    

(765

)

    

(849

)

Accounts payable

    

(1,899

)

    

(1,607

)

Accrued wages and benefits

    

(681

)

    

(351

)

Accrued professional fees

    

(124

)

    

117

  

Customer deposits and deferred revenue

    

(861

)

    

625

  

Accrued sales commissions

    

(244

)

    

(266

)

Domestic and foreign income taxes payable

    

(851

)

    

(220

)

Other current liabilities

    

(94

)

    

76

  

Deferred revenue, net of current portion

    

(75

)

    

-

  

Other liabilities

    

(183

)

    

(17

)

Net cash (used in) provided by operating activities

    

(3,015

)

    

5,342

  
                 

CASH FLOWS FROM INVESTING ACTIVITIES

                

Acquisition of business, net of cash acquired

    

(18,727

)

    

-

  

Purchase of property and equipment

    

(656

)

    

(709

)

Net cash used in investing activities

    

(19,383

)

    

(709

)
                 

CASH FLOWS FROM FINANCING ACTIVITIES

                

Net proceeds from public offering of common stock

    

-

      

19,244

  

Proceeds from short-term borrowings

    

1,120

      

-

  

Repayments of long-term borrowings

    

(3,129

)

    

(2,050

)

Proceeds from stock options exercised

    

116

      

900

  

Proceeds from shares sold under Employee Stock Purchase Plan

    

84

      

83

  

Settlement of employee tax liabilities in connection with treasury stock transaction

    

(41

)

    

(74

)

Net cash (used in) provided by financing activities

    

(1,850

)

    

18,103

  
                 

Effects of exchange rates on cash

    

(642

)

    

123

  
                 

Net cash (used in) provided by all activities

    

(24,890

)

    

22,859

  

Cash, cash equivalents and restricted cash at beginning of period

    

45,260

      

14,576

  

Cash and cash equivalents at end of period

  

$

20,370

    

$

37,435

  
                 

 

-MORE-

inTEST Reports 4% Revenue Growth for Second Quarter 2024

Page 10 of 12

August 2, 2024

 

inTEST CORPORATION

 

Revenue by Market

(In thousands)

(Unaudited)

 

($ in 000s)

  

Three Months Ended

  
                                   

Change

                    

Change

  
   

6/30/2024

    

6/30/2023

    

$

    

%

    

3/31/2024

    

$

    

%

  

Revenue

                                                                                

Semi

   $ 10,124       29.8 %   $ 18,833       57.8 %   $ (8,709 )     -46.2 %   $ 14,967       50.2 %   $ (4,843 )     -32.4 %

Industrial

     3,415       10.0 %     2,806       8.6 %     609       21.7 %     4,187       14.0 %     (772 )     -18.4 %

Auto/EV

     10,735       31.6 %     1,542       4.7 %     9,193       596.2 %     3,958       13.3 %     6,777       171.2 %

Life Sciences

     2,194       6.5 %     1,135       3.5 %     1,059       93.3 %     653       2.2 %     1,541       236.0 %

Defense/Aerospace

     3,682       10.8 %     3,890       11.9 %     (208 )     -5.3 %     3,239       10.9 %     443       13.7 %

Security

     792       2.3 %     936       2.9 %     (144 )     -15.4 %     541       1.8 %     251       46.4 %

Other

     3,049       9.0 %     3,416       10.6 %     (367 )     -10.7 %     2,279       7.6 %     770       33.8 %
    $ 33,991       100.0 %   $ 32,558       100.0 %   $ 1,433       4.4 %   $ 29,824       100.0 %   $ 4,167       14.0 %

 

 

 

Orders by Market

(In thousands)

(Unaudited)

 

($ in 000s)

  

Three Months Ended

  
                                   

Change

                    

Change

  
   

6/30/2024

    

6/30/2023

    

$

    

%

    

3/31/2024

    

$

    

%

  

Orders

                                                                                

Semi

   $ 11,026       42.1 %   $ 14,721       46.9 %   $ (3,695 )     -25.1 %   $ 10,253       45.0 %   $ 773       7.5 %

Industrial

     3,485       13.4 %     5,756       18.3 %     (2,271 )     -39.5 %     3,093       13.5 %     392       12.7 %

Auto/EV

     4,721       18.0 %     3,276       10.4 %     1,445       44.1 %     4,041       17.7 %     680       16.8 %

Life Sciences

     1,025       3.9 %     609       1.9 %     416       68.3 %     698       3.1 %     327       46.8 %

Defense/Aerospace

     2,665       10.2 %     3,216       10.2 %     (551 )     -17.1 %     2,684       11.8 %     (19 )     -0.7 %

Security

     81       0.3 %     456       1.5 %     (375 )     -82.2 %     40       0.2 %     41       102.5 %

Other

     3,179       12.1 %     3,397       10.8 %     (218 )     -6.4 %     1,990       8.7 %     1,189       59.7 %
    $ 26.182       100.0 %   $ 31,431       100.0 %   $ (5,249 )     -16.7 %   $ 22,799       100.0 %   $ 3,383       14.8 %

 

 

-MORE-

inTEST Reports 4% Revenue Growth for Second Quarter 2024

Page 11 of 12

August 2, 2024

 

inTEST CORPORATION

 

Segment Data

(In thousands)

(Unaudited)

 

 

   

Three Months Ended

June 30,

    

Six Months Ended

June 30,

  
   

2024

    

2023

    

2024

    

2023

  

Revenue:

                                

Electronic Test

   $ 16,159     $ 10,993     $ 27,275     $ 21,364  

Environmental Technologies

     8,273       8,136       15,101       16,178  

Process Technologies

     9,559       13,429       21,439       26,935  

Total Revenue

   $ 33,991     $ 32,558     $ 63,815     $ 64,477  
                                 

Division operating income:

                                

Electronic Test

   $ 1,743     $ 2,641     $ 3,556     $ 5,219  

Environmental Technologies

     993       943       1,008       1,956  

Process Technologies

     970       2,592       2,931       5,268  

Total division operating income

     3,706       6,176       7,495       12,443  
                                 

Corporate expenses

     (2,473 )     (2,309 )     (5,175 )     (4,514 )

Acquired intangible amortization

     (897 )     (523 )     (1,492 )     (1,067 )

Interest expense

     (253 )     (176 )     (393 )     (358 )

Other income

     213       197       648       255  

Earnings before income tax expense

   $ 296     $ 3,365     $ 1,083     $ 6,759  

 

-MORE-

inTEST Reports 4% Revenue Growth for Second Quarter 2024

Page 12 of 12

August 2, 2024

 

inTEST CORPORATION

Reconciliation of Non-GAAP Financial Measures

(In thousands, except per share and percentage data)
(Unaudited)

 

Reconciliation of Net Earnings to Adjusted Net Earnings (Non-GAAP) and
Earnings Per Diluted Share to Adjusted EPS (Non-GAAP):

 

   

Three Months Ended

  
   

6/30/2024

    

6/30/2023

    

3/31/2024

  
                         

Net earnings

  $ 230     $ 2,793     $ 662  

Acquired intangible amortization

     897       523       595  

Tax adjustments

     (168 )     (89 )     (95 )

Adjusted net earnings (Non-GAAP)

  $ 959     $ 3,227     $ 1,162  
                         

Diluted weighted average shares outstanding

     12,330       11,697       12,158  

Earnings per diluted share:(1)

                        

Net earnings

   $ 0.02     $ 0.24     $ 0.05  

Acquired intangible amortization

     0.07       0.05       0.05  

Tax adjustments

     (0.01 )     (0.01 )     (0.01 )

Adjusted EPS (Non-GAAP)

  $ 0.08     $ 0.28     $ 0.10  

(1) Components may not add up to totals due to rounding.

 

Reconciliation of Net Earnings and Net Margin to Adjusted EBITDA (Non-GAAP) and
Adjusted EBITDA Margin (Non-GAAP):

 

   

Three Months Ended

  
   

6/30/2024

    

6/30/2023

    

3/31/2024

  
                         

Net earnings

   $ 230     $ 2,793     $ 662  

Acquired intangible amortization

     897       523       595  

Net interest (income) expense

     41       43       (193 )

Income tax expense

     66       572       125  

Depreciation

     356       259       273  

Non-cash stock-based compensation

     564       605       349  

Adjusted EBITDA (Non-GAAP)

  $ 2,154     $ 4,795     $ 1,811  

Revenue

     33,991       32,558       29,824  

Net margin

     0.7 %     8.6 %     2.2 %

Adjusted EBITDA margin (Non-GAAP)

     6.3 %     14.7 %     6.1 %

 

 

Reconciliation of Third Quarter 2024 Estimated Earnings Per Diluted Share to
Estimated Adjusted EPS (Non-GAAP):

 

 

Estimated
   

Estimated earnings per diluted share

~$0.02 

    Estimated acquired intangible amortization

~0.07 

    Estimated tax adjustments

~(0.01)

Estimated adjusted EPS (Non-GAAP)

~$0.08

 

###