inTEST Reports $29.8 Million in Revenue for First Quarter 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.

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,” 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.

– FINANCIAL TABLES FOLLOW –


inTEST CORPORATION Consolidated Statements of Operations *(In thousands, except share and per share data)* (Unaudited)

	Three Months Ended March 31,
	2024			2023

Revenue	$	29,824		$	31,919
Cost of revenue		16,748			16,867
Gross profit		13,076			15,052

Operating expenses:
Selling expense		4,590			4,455
Engineering and product development expense		1,982			1,904
General and administrative expense		6,012			5,175
Total operating expenses		12,584			11,534

Operating income		492			3,518
Interest expense		(140	)		(182	)
Other income		435			58

Earnings before income tax expense		787			3,394
Income tax expense		125			577

Net earnings	$	662		$	2,817

Earnings per common share – basic	$	0.06		$	0.26

Weighted average common shares outstanding – basic		12,026,361			10,755,729

Earnings per common share – diluted	$	0.05		$	0.25

Weighted average common shares and common share equivalents outstanding – diluted		12,158,297			11,088,664

inTEST CORPORATION Consolidated Balance Sheets *(In thousands)* (Unaudited)

	March 31,			December 31,
	2024			2023
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	27,331		$	45,260
Trade accounts receivable, net of allowance for credit losses of $426 and $474, respectively		22,859			18,175
Inventories		31,331			20,089
Prepaid expenses and other current assets		3,868			2,254
Total current assets		85,389			85,778
Property and equipment:
Machinery and equipment		8,639			7,118
Leasehold improvements		3,932			3,601
Gross property and equipment		12,571			10,719
Less: accumulated depreciation		(7,800	)		(7,529	)
Net property and equipment		4,771			3,190
Right-of-use assets, net		6,270			4,987
Goodwill		33,278			21,728
Intangible assets, net		28,819			16,596
Deferred tax assets		-			1,437
Restricted certificates of deposit		100			100
Other assets		900			1,013
Total assets	$	159,527		$	134,829

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of Term Note and other long-term debt	$	9,629		$	4,100
Current portion of operating lease liabilities		2,017			1,923
Accounts payable		11,395			5,521
Accrued wages and benefits		6,482			4,156
Accrued professional fees		883			1,228
Customer deposits and deferred revenue		5,596			3,797
Accrued sales commissions		1,116			1,055
Domestic and foreign income taxes payable		509			1,038
Other current liabilities		2,026			1,481
Total current liabilities		39,653			24,299
Operating lease liabilities, net of current portion		4,644			3,499
Term Note and other long-term debt, net of current portion		10,808			7,942
Contingent consideration		822			1,093
Deferred revenue, net of current portion		1,210			1,331
Deferred tax liabilities		1,126			-
Other liabilities		1,947			384
Total liabilities		60,210			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; 12,566,024 and 12,241,925 shares issued, respectively		125			122
Additional paid-in capital		56,954			54,450
Retained earnings		42,858			42,196
Accumulated other comprehensive earnings		311			414
Treasury stock, at cost; 78,515 and 75,758 shares, respectively		(931	)		(901	)
Total stockholders' equity		99,317			96,281
Total liabilities and stockholders' equity	$	159,527		$	134,829

inTEST CORPORATION Consolidated Statements of Cash Flows *(In thousands)* (Unaudited)

	Three Months Ended March 31,
	2024			2023
CASH FLOWS FROM OPERATING ACTIVITIES
Net earnings	$	662		$	2,817
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization		1,282			1,176
Provision for excess and obsolete inventory		176			135
Foreign exchange gain		(28	)		(18	)
Amortization of deferred compensation related to stock-based awards		349			474
Discount on shares sold under Employee Stock Purchase Plan		8			8
Proceeds from sale of demonstration equipment, net of gain		19			6
Deferred income tax expense (benefit)		226			(404	)
Changes in assets and liabilities:
Trade accounts receivable		(982	)		291
Inventories		(396	)		(2,038	)
Prepaid expenses and other current assets		508			(740	)
Other assets		(22	)		2
Operating lease liabilities		(447	)		(423	)
Accounts payable		1,311			403
Accrued wages and benefits		939			(654	)
Accrued professional fees		(342	)		(142	)
Customer deposits and deferred revenue		(782	)		921
Accrued sales commissions		66			(221	)
Domestic and foreign income taxes payable		(406	)		864
Other current liabilities		70			43
Deferred revenue, net of current portion		(121	)		-
Other liabilities		(15	)		(16	)
Net cash provided by operating activities		2,075			2,484

CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of business, net of cash acquired		(18,904	)		-
Purchase of property and equipment		(340	)		(334	)
Net cash used in investing activities		(19,244	)		(334	)

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from short-term borrowings		273			-
Repayments of long-term borrowings		(1,181	)		(1,025	)
Proceeds from shares sold under Employee Stock Purchase Plan		46			40
Proceeds from stock options exercised		18			165
Settlement of employee tax liabilities in connection with treasury stock transaction		(30	)		(33	)
Net cash used in financing activities		(874	)		(853	)

Effects of exchange rates on cash		114			71

Net cash provided by (used in) all activities		(17,929	)		1,368
Cash, cash equivalents and restricted cash at beginning of period		45,260			14,576
Cash, cash equivalents and restricted cash at end of period	$	27,331		$	15,944

inTEST CORPORATION Revenue by Market *(In thousands)* (Unaudited)

($ in 000s)	Three Months Ended
									Change									Change
	3/31/2024				3/31/2023				$			%		12/31/2023				$			%
Revenue
Semi	$	14,967	50.2	%	$	17,683	55.4	%	$	(2,716	)	-15.4	%	$	10,743	38.5	%	$	4,224		39.3	%
Industrial		4,187	14.0	%		3,137	9.8	%		1,050		33.5	%		5,911	21.2	%		(1,724	)	-29.2	%
Auto/EV		3,958	13.3	%		2,597	8.1	%		1,361		52.4	%		3,981	14.3	%		(23	)	-0.6	%
Life Sciences		653	2.2	%		1,513	4.8	%		(860	)	-56.8	%		878	3.1	%		(225	)	-25.6	%
Defense/Aerospace		3,239	10.9	%		2,839	8.9	%		400		14.1	%		2,416	8.7	%		823		34.1	%
Security		541	1.8	%		966	3.0	%		(425	)	-44.0	%		819	3.0	%		(278	)	-33.9	%
Other		2,279	7.6	%		3,184	10.0	%		(905	)	-28.4	%		3,136	11.2	%		(857	)	-27.3	%
	$	29,824	100.0	%	$	31,919	100.0	%	$	(2,095	)	-6.6	%	$	27,884	100.0	%	$	1,940		7.0	%

Orders by Market *(In thousands)* (Unaudited)

($ in 000s)	Three Months Ended
									Change									Change
	3/31/2024				3/31/2023				$			%		12/31/2023				$			%
Orders
Semi	$	10,253	45.0	%	$	18,346	59.5	%	$	(8,093	)	-44.1	%	$	13,295	48.3	%	$	(3,042	)	-22.9	%
Industrial		3,093	13.5	%		4,142	13.5	%		(1,049	)	-25.3	%		3,445	12.5	%		(352	)	-10.2	%
Auto/EV		4,041	17.7	%		2,044	6.6	%		1,997		97.7	%		1,822	6.6	%		2,219		121.8	%
Life Sciences		698	3.1	%		1,936	6.3	%		(1,238	)	-63.9	%		877	3.2	%		(179	)	-20.4	%
Defense/Aerospace		2,684	11.8	%		1,977	6.4	%		707		35.8	%		5,161	18.8	%		(2,477	)	-48.0	%
Security		40	0.2	%		212	0.7	%		(172	)	-81.1	%		65	0.2	%		(25	)	-38.5	%
Other		1,990	8.7	%		2,167	7.0	%		(177	)	-8.2	%		2,858	10.4	%		(868	)	-30.4	%
	$	22,799	100.0	%	$	30,824	100.0	%	$	(8,025	)	-26.0	%	$	27,523	100.0	%	$	(4,724	)	-17.2	%

inTEST CORPORATION Segment Data *(In thousands)* (Unaudited)

	Three Months Ended March 31,
	2024			2023
*Revenue:*
Electronic Test	$	11,116		$	10,371
Environmental Technologies		6,828			8,042
Process Technologies		11,880			13,506
Total revenue	$	29,824		$	31,919
*Division operating income:*
Electronic Test	$	1,813		$	2,578
Environmental Technologies		15			1,013
Process Technologies		1,961			2,676
Total division operating income		3,789			6,267

Corporate expenses		(2,702	)		(2,205	)
Acquired intangible amortization		(595	)		(544	)
Interest expense		(140	)		(182	)
Other income		435			58
Earnings before income tax expense	$	787		$	3,394

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
	3/31/2024		3/31/2023		12/31/2023

Net earnings	$662		$2,817		$1,455
Acquired intangible amortization	595		544		513
Tax adjustments	(95	)	(92	)	(58	)
Adjusted net earnings (Non-GAAP)	$1,162		$3,269		$1,910

Diluted weighted average shares outstanding	12,158		11,089		12,122
Earnings per diluted share: ⁽¹⁾
Net earnings	$0.05		$0.25		$0.12
Acquired intangible amortization	0.05		0.05		0.04
Tax adjustments	(0.01	)	(0.01	)	─
Adjusted EPS (Non-GAAP)	$0.10		$0.29		$0.16
(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
	3/31/2024		3/31/2023		12/31/2023

Net earnings	$662		$2,817		$1,455
Acquired intangible amortization	595		544		513
Net interest expense (income)	(193	)	169		(340	)
Income tax expense	125		577		111
Depreciation	273		245		255
Non-cash stock-based compensation	349		474		424
Adjusted EBITDA (Non-GAAP)	$1,811		$4,826		$2,418
Revenue	29,824		31,919		27,884
Net margin	2.2	%	8.8	%	5.2	%
Adjusted EBITDA margin (Non-GAAP)	6.1	%	15.1	%	8.7	%

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

	Low		High

Estimated earnings per diluted share	$0.00		$0.06
Estimated acquired intangible amortization	0.12		0.12
Estimated tax adjustments	(0.02	)	(0.02	)
Estimated adjusted EPS (Non-GAAP)	$0.10		$0.16

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