Slide 1: Q2 2023 Financial Results Conference Call
inTEST Corporation Q2 2023 Financial Results Conference Call Nick Grant, President and CEO Duncan Gilmour, CFO August 4, 2023
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation 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, suc
Slide 3: Execution of 5-Point Strategy Driving Results
Execution of 5-Point Strategy Driving Results ➢ Record quarterly revenue of $32.6 million, up 10% y/y 5-Point Strategy ➢ Q2 net earnings of $2.8 million, up 32% y/y ➢ Continued execution of 5-Point Strategy for Growth Global & Innovation & ▪ Driving y/y growth in sales, operating income, net earning
Slide 4: Revenue
Revenue ($ in millions) $32.4 $32.6 ➢ Record Q2 revenue of $32.6 million, up $31.9 $30.8 $3.0 million, or 10.1% y/y $29.6 ➢ Strong demand across most markets and technology offerings ▪ Continued strong shipments in front-end semi related Q2 22 Q3 22 Q4 22 Q1 23 Q2 23 to Silicon Carbide (SiC) crystal
Slide 5: Gross Profit and Margin
Gross Profit and Margin ($ in millions) Quarters $15.0 $15.1 $15.0 ➢ Q2 gross margin of 46.2% improved 40 bps y/y $13.5 $13.9 ▪ Reflects better product mix and improved pricing ▪ Sequential decline primarily due to changes in mix 45.8% 45.2% 46.2% 47.2% 46.2% ➢ Q2 gross profit of $15.0 million incre
Slide 6: Operating Expenses
Operating Expenses Investing in people and marketing to support 5-Point Strategy for Growth ($ in millions) Operating expenses as a % of sales ➢ Q2 operating expenses as a percent of revenue 36.6% 34.9% 33.8% 36.1% 35.9% improved to 35.9% versus 36.6% in Q2 2022 $11.5 $11.7 ▪ Demonstrates operating
Slide 7: Earnings and Adjusted EBITDA
Earnings and Adjusted EBITDA ($ in millions, except per share data) Net Earnings and Adjusted EBITDA/ (1) EPS and Adjusted EPS (Non-GAAP) Adjusted EBITDA Margin (Non-GAAP)(1) Quarters $0.34 $5.3 $0.30 $0.29 $4.8 $4.8 $0.28 $0.28 $4.5 $0.25 $0.25 $4.2 $0.23 $0.24 $0.20 $3.2 $2.5 $2.8 $2.8 $2.1 14.2%
Slide 8: Capital Structure and Cash Flow
Capital Structure and Cash Flow ($ in millions) Year Capitalization Cash Flow Three Months Ended Ended 6/30/23 3/31/23 6/30/23 6/30/22 12/31/22 Cash and cash equivalents $ 37.4 $ 15.4 Net cash provided by (used in) operating $ 2.9 $ (2.3) $ (1.4) Restricted cash $ 0.0 $ 0.5 activities Total debt $ 1
Slide 9: Orders and Backlog
Orders and Backlog(1) ($ in millions) ➢ Q2 orders up 2% sequentially Orders $40.5 ▪ Strength in orders from security, defense/aerospace, automotive/EV, industrial and other markets $32.7 $31.4 $31.3 $30.8 ▪ Chillers for testing and production of high-powered traction inverters used in EVs ▪ Inductio
Slide 10: Updating Outlook for 2023
Updating Outlook for 2023 ➢ Third Quarter Outlook(1) 5-Point Strategy ▪ Revenue: similar to Q2 ▪ Gross margin: ~46% ▪ Operating expenses: similar to Q2 • Amortization (after tax) ~$430,000 Global & Innovation & ▪ Interest expense: ~$175,000 Market Differentiation Expansion ▪ Effective tax rate: 16%
Slide 11: Executing to Plan
Executing to Plan ($ in millions) ~$200 to $250 Potential Future Acquisitions $127 - $131 $117 $85 $54 ∕∕ 2020 2021 2022 2023E 2025E Actual Revenue Estimated Revenue(1) (1) Estimated 2025 revenue, including estimated revenue from future potential acquisitions, is based on management’s current views
Slide 12: Driving Scale to Deliver Growth in Earnings
Driving Scale to Deliver Growth in Earnings ($ in millions) Division Operating Income(1) Adjusted EBITDA(2) Net Earnings ~ $40 + ~ $30 + $22 ~ $20 + $19 $16 $12 $8 $7 22% 19% ~20% 14% 14% ~15% 9% 7% ~10% ∕∕ ∕∕ ∕∕ 2021 2022 2025E (3) 2021 2022 2025E (3) 2021 2022 2025E(3) (1) See segment reporting in
Slide 13: Execution on Track with Plan
Execution on Track with Plan Strong demand for inTEST’s innovative technologies and engineering expertise Diversified end markets with strong secular growth drivers Growing customer base, deepening customer reach and expanding geographically Financial flexibility to execute growth strategy Executing
Slide 14: Conference Call Playback Info and Upcoming Events
Conference Call Playback Info ➢ Replay Number: (412) 317-6671 passcode: 13739637 ➢ Telephone replay available through August 11, 2023 ➢ Webcast / Presentation / Replay available at www.intest.com/investor-relations ➢ Transcript, when available, at www.intest.com/investor-relations Upcoming Events ➢
Slide 15: Supplemental Information
inTEST Corporation Q2 2023 Financial Results Conference Call Supplemental Information August 4, 2023
Slide 16: Reconciliation of Net Earnings to Adjusted Net Earnings and EPS
Reconciliation of Net Earnings to Adjusted Net Earnings (Non-GAAP) and Earnings Per Share – Diluted to Adjusted Earnings Per Share – Diluted (Non-GAAP) ($ in thousands, except per share amounts) Three Months Ended Years Ended 6/30/2022 9/30/2022 12/31/2022 3/31/2023 6/30/2023 12/31/2021 12/31/2022 N
Slide 17: Reconciliation of Net Earnings to Adjusted EBITDA (Quarterly)
Reconciliation of Net Earnings and Net Margin to Adjusted EBITDA (Non-GAAP) and Adjusted EBITDA Margin (Non-GAAP) ($ in thousands) Three Months Ended 6/30/2022 9/30/2022 12/31/2022 3/31/2023 6/30/2023 Net earnings $ 2,116 $ 2,524 $ 3,244 $ 2,817 $ 2,793 Acquired intangible amortization 765 595 552 5
Slide 18: Reconciliation of Net Earnings to Adjusted EBITDA (Annual)
Reconciliation of Net Earnings and Net Margin to Adjusted EBITDA (Non-GAAP) and Adjusted EBITDA Margin (Non-GAAP) ($ in thousands) Years Ended December 31, 2019 2020 2021 2022 Net earnings $ 2,322 $ (895) $ 7,283 $ 8,461 Acquired intangible amortization 1,257 1,233 1,440 2,694 Net interest expense -
Slide 19: Reconciliation of Third Quarter 2023 Estimated EPS
Reconciliation of Third Quarter 2023 Estimated Earnings Per Share – Diluted to Estimated Adjusted Earnings Per Share – Diluted (Non-GAAP) Low High Estimated earnings per share – diluted $ 0.20 $ 0.24 Estimated acquired intangible amortization 0.04 0.04 Estimated tax adjustments (0.01) (0.01) Estimat
Slide 20: Segment Reporting
Segment Reporting ($ in thousands) Quarter Ended Year Ended 6/30/2022 9/30/2022 12/31/2022 3/31/2023 6/30/2023 12/31/2021 12/31/2022 Electronic Test $ 9,797 $ 10,408 $ 11,236 $ 10,371 $ 10,993 $ 32,509 $ 40,219 Environmental Technologies 7,507 7,631 8,041 8,042 8,136 26,896 30,172 Process Technologi