inTEST First Quarter 2022 Revenue Up 23% Year-over-Year and Up 8% Sequentially, Demonstrating Solid Execution of 5-Point Strategy

Conference Call and Webcast

The Company will host a conference call and webcast today at 8:30 am 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: https://ir.intest.com/.

A telephonic replay will be available from 11:30 am ET on the day of the call through Friday, May 13, 2022. To listen to the archived call, dial (412) 317-6671 and enter replay pin number 13728796 or access the webcast replay via the Company’s website. A transcript will also be posted to the website once available.

About inTEST Corporation

inTEST Corporation is a global supplier of innovative test and process solutions for use in manufacturing and testing in target markets which include automotive, 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

In addition to disclosing results that are determined in accordance with GAAP, we also disclose non-GAAP financial measures. These non-GAAP financial measures consist of adjusted net earnings (loss), adjusted earnings (loss) per diluted share, adjusted EBITDA, and adjusted EBITDA margin. Adjusted net earnings (loss) is derived by adding acquired intangible amortization, adjusted for the related income tax expense (benefit), to net earnings (loss). Adjusted earnings (loss) per diluted share is derived by dividing adjusted net earnings (loss) by diluted weighted average shares outstanding. Adjusted EBITDA is derived by adding acquired intangible amortization, interest expense, income tax expense, depreciation, and stock-based compensation expense to net earnings (loss). 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 (loss) and adjusted earnings (loss) per diluted share are non-GAAP financial measures presented to provide investors with meaningful, supplemental information regarding our baseline performance before acquired intangible amortization charges as 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 these expenses may not be indicative of our underlying operating performance. 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 (loss) and earnings (loss) per diluted share to adjusted net earnings (loss) and adjusted earnings (loss) per diluted share and from net earnings (loss) to adjusted EBITDA and adjusted EBITDA margin, are contained in the tables below. The non-GAAP financial measures discussed in this press release may not be comparable to similarly titled measures used by other companies. The presentation of non-GAAP financial measures is not meant to be considered in isolation, as a substitute for, or superior to, financial measures or information provided in accordance with GAAP.

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 “believes,” “expects,” “intends,” “may,” “will,” “should,” “plans,” “projects,” “forecasts,” “outlook,” “anticipates,” “targets,” “estimates,” 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 the life sciences, security, industrial 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; the impact of the COVID-19 pandemic on the Company’s business, liquidity, financial condition and results of operations; 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; changes in the demand for semiconductors; 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, 2021. 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.

– FINANCIAL TABLES FOLLOW –

 

inTEST CORPORATION

Consolidated Statements of Operations

(In thousands, except share and per share data)

(Unaudited)

 

 

 

Three Months Ended
March 31,

 

 

 

2022

 

 

2021

 

 

 

 

 

 

 

 

 

 

Revenue

 

$

24,081

 

 

$

19,556

 

Cost of revenue

 

 

13,068

 

 

 

10,035

 

Gross profit

 

 

11,013

 

 

 

9,521

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

Selling expense

 

 

3,456

 

 

 

2,403

 

Engineering and product development expense

 

 

1,924

 

 

 

1,322

 

General and administrative expense

 

 

4,831

 

 

 

3,161

 

Restructuring and other charges

 

 

-

 

 

 

55

 

Total operating expenses

 

 

10,211

 

 

 

6,941

 

 

 

 

 

 

 

 

 

 

Operating income

 

 

802

 

 

 

2,580

Other expense

 

 

(147

)

 

 

(2

)

 

 

 

 

 

 

 

 

 

Earnings before income tax expense

 

 

655

 

 

 

2,578

Income tax expense

 

 

78

 

 

 

366

 

 

 

 

 

 

 

 

 

Net earnings

 

$

577

 

 

$

2,212

 

 

 

 

 

 

 

 

 

Earnings per common share – basic

 

$

0.05

 

 

$

0.21

Weighted average common shares outstanding – basic

 

 

10,617,271

 

 

 

10,329,449

 

 

 

 

 

 

 

 

 

 

Earnings per common share – diluted

 

$

0.05

 

 

$

0.21

Weighted average common shares and common share equivalents outstanding – diluted

 

 

10,842,592

 

 

 

10,525,826

 

 

inTEST CORPORATION

Consolidated Balance Sheets

(In thousands)

 

 

 

March 31,

 

 

December 31,

 

 

 

2022

2021

 

 

 

(Unaudited)

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

17,211

 

 

$

21,195

 

Trade accounts receivable, net of allowance for doubtful accounts of $212 and $213, respectively

 

 

17,292

 

 

 

16,536

 

Inventories

 

 

14,913

 

 

 

12,863

 

Prepaid expenses and other current assets

 

 

1,853

 

 

 

1,483

 

Total current assets

 

 

51,269

 

 

 

52,077

 

Property and equipment:

 

 

 

 

 

 

 

 

Machinery and equipment

 

 

5,801

 

 

 

5,733

 

Leasehold improvements

 

 

3,193

 

 

 

3,001

 

Gross property and equipment

 

 

8,994

 

 

 

8,734

 

Less: accumulated depreciation

 

 

(6,190

)

 

 

(6,046

)

Net property and equipment

 

 

2,804

 

 

 

2,688

 

Right-of-use assets, net

 

 

5,657

 

 

 

5,919

 

Goodwill

 

 

21,863

 

 

 

21,448

 

Intangible assets, net

 

 

20,905

 

 

 

21,634

 

Restricted certificates of deposit

 

 

100

 

 

 

100

 

Other assets

 

 

336

 

 

 

39

 

Total assets

 

$

102,934

 

 

$

103,905

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Current portion of Term Note

 

$

4,100

 

 

$

4,100

 

Current portion of operating lease liabilities

 

 

1,444

 

 

 

1,371

 

Accounts payable

 

 

5,896

 

 

 

4,281

 

Accrued wages and benefits

 

 

2,898

 

 

 

4,080

 

Accrued professional fees

 

 

527

 

 

 

1,048

 

Customer deposits and deferred revenue

 

 

5,425

 

 

 

6,038

 

Accrued sales commission

 

 

842

 

 

 

863

 

Domestic and foreign income taxes payable

 

 

1,625

 

 

 

2,024

 

Other current liabilities

 

 

1,390

 

 

 

1,267

 

Total current liabilities

 

 

24,147

 

 

 

25,072

 

Operating lease liabilities, net of current portion

 

 

4,876

 

 

 

5,248

 

Term Note, net of current portion

 

 

15,117

 

 

 

16,000

 

Deferred tax liabilities

 

 

941

 

 

 

1,379

 

Contingent consideration

 

 

1,369

 

 

 

930

 

Other liabilities

 

 

483

 

 

 

453

 

Total liabilities

 

 

46,933

 

 

 

49,082

 

 

 

 

 

 

 

 

 

 

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; 10,995,194 and 10,910,460 shares issued, respectively

 

 

110

 

 

 

109

 

Additional paid-in capital

 

 

30,358

 

 

 

29,931

 

Retained earnings

 

 

24,970

 

 

 

24,393

 

Accumulated other comprehensive earnings

 

 

767

 

 

 

594

 

Treasury stock, at cost; 33,077 shares

 

 

(204

)

 

 

(204

)

Total stockholders' equity

 

 

56,001

 

 

 

54,823

 

Total liabilities and stockholders' equity

 

$

102,934

 

 

$

103,905

 

 

inTEST CORPORATION

Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

 

 

 

Three Months Ended
March 31,

 

 

 

2022

 

 

2021

 

CASH FLOWS FROM OPERATING ACTIVITIES

 

 

 

 

 

 

 

 

Net earnings

 

$

577

 

 

$

2,212

Adjustments to reconcile net earnings to net cash used in operating activities:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

1,279

 

 

 

740

 

Provision for excess and obsolete inventory

 

 

123

 

 

 

39

 

Foreign exchange loss

 

 

40

 

 

 

8

 

Amortization of deferred compensation related to stock-based awards

 

 

372

 

 

 

269

 

Loss on disposal of property and equipment

 

 

-

 

 

 

22

 

Proceeds from sale of demonstration equipment, net of gain

 

 

19

 

 

 

7

 

Deferred income tax benefit

 

 

(438

)

 

 

(9

)

Changes in assets and liabilities:

 

 

 

 

 

 

 

 

Trade accounts receivable

 

 

(832

)

 

 

(5,082

)

Inventories

 

 

(2,177

)

 

 

(783

)

Prepaid expenses and other current assets

 

 

(374

)

 

 

212

 

Other assets

 

 

(8

)

 

 

(8

)

Accounts payable

 

 

1,592

 

 

 

1,235

 

Accrued wages and benefits

 

 

(1,179

)

 

 

103

Accrued professional fees

 

 

(520

)

 

 

(261

)

Customer deposits and deferred revenue

 

 

(608

)

 

 

799

Accrued sales commission

 

 

(20

)

 

 

232

 

Operating lease liabilities

 

 

(346

)

 

 

(343

)

Domestic and foreign income taxes payable

 

 

(395

)

 

 

335

Other current liabilities

 

 

40

 

 

(57

)

Other liabilities

 

 

60

 

 

(7

)

Net cash used in operating activities

 

 

(2,795

)

 

 

(337

)

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES

 

 

 

 

 

 

 

 

Purchase of property and equipment

 

 

(335

)

 

 

(388

)

Net cash used in investing activities

 

 

(335

)

 

 

(388

)

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES

 

 

 

 

 

 

 

 

Repayments of Term Note

 

 

(883

)

 

 

-

 

Proceeds from shares sold under Employee Stock Purchase Plan

 

 

56

 

 

 

-

 

Proceeds from stock options exercised

 

 

-

 

 

 

717

Net cash provided by (used in) financing activities

 

 

(827

)

 

 

717

 

 

 

 

 

 

 

 

 

Effects of exchange rates on cash

 

 

(27

)

 

 

(74

)

 

 

 

 

 

 

 

 

 

Net cash used in all activities

 

 

(3,984

)

 

 

(82

)

Cash and cash equivalents at beginning of period

 

 

21,195

 

 

 

10,277

 

Cash and cash equivalents at end of period

 

$

17,211

 

 

$

10,195

 

 

 

 

 

 

 

 

 

Cash payments for:

 

 

 

 

 

 

 

 

Domestic and foreign income taxes

 

$

966

 

 

$

41

 

inTEST CORPORATION

Revenue by Market

(In thousands)

(Unaudited)

 

($ in 000s)

Three Months Ended

Change

Change

3/31/2022

12/31/2021

$

%

3/31/2021

$

%

Revenue

Semi

$

13,390

55.6

%

$

12,284

54.9

%

$

1,106

9.0

%

$

13,320

68.1

%

$

70

0.5

%

Industrial

 

2,799

11.6

%

 

2,172

9.7

%

 

627

28.9

%

 

1,427

7.3

%

 

1,372

96.1

%

Auto/EV

Life Sciences

Defense/Aerospace

Security

Other

 

 

 

 

 

2,756

699

1,493

574

2,370

11.4

2.9

6.2

2.4

9.8

%

%

%

%

%

 

 

 

 

 

2,697

409

1,322

693

2,781

12.1

1.8

5.9

3.1

12.4

%

%

%

%

%

 

 

 

 

 

59

290

171

(119)

(411)

2.2

70.9

12.9

-17.2

-14.8

%

%

%

%

%

 

 

 

 

 

1,327

643

1,252

-

1,587

6.8

3.3

6.4

0.0

8.1

%

%

%

%

%

 

 

 

 

 

1,429

56

241

574

783

107.7

8.7

19.2

NM

49.3

%

%

%

 

%

$

24,081

100.0

%

$

22,358

100.0

%

$

1,723

7.7

%

$

19,556

100.0

%

$

4,525

23.1

%

 

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