Slide 1: We're Not Just Semi…We Make Things HOT & COLD Where It Matters
We’re Not Just Semi…We Make Things HOT & COLD Where It Matters James Pelrin Q2 2018 President & CEO April 1– June 30, 2018 Hugh T. Regan, Treasurer & CFO
Slide 2: Safe Harbor Statement
Safe Harbor Statement This presenta,on contains forward-looking statements within the meaning of the Securi,es Act of 1933 and the Securi,es Exchange Act of 1934. These statements are based upon management’s current expecta,ons, and are subject to risks, uncertain,es and other factors that may cause
Slide 3: Non-GAAP Results
Non-GAAP Results In addi,on to disclosing results that are determined in accordance with GAAP, we also disclose non-GAAP performance measures. These non-GAAP performance measures include adjusted net earnings and adjusted net earnings per diluted share. Adjusted net earnings is derived by adding acq
Slide 4: Investment Thesis
Investment Thesis § Deliver high-margin engineered products for test and process applicaHons in Semi, Auto, Consumer Electronics, Defense/Aerospace, Telecom, and Industrial markets § Deliver profits and generate cash even during cyclical/seasonal ATE downturns § Profits for 8 consecu-ve years § Annual
Slide 5: inTEST Transformed
inTEST Transformed § Seasoned CEO with extensive industry experience and operaHonal experience taking the helm § Proven ability to opHmize revenue and generate cash § Extensive M&A experience with different technologies and industries § Successful risk managers with a carefully structured acquisiHon
Slide 6: Executive Team
Executive Team § Led by highly qualified team of execuHves with extensive industry experience and a track record of managing profitable businesses to opHmize operaHons. § All businesses showed revenue growth in 2017 and have been opHmized. GeneraHng cash…on average 15% return. Jim Pelrin – President &
Slide 7: M&A Team
M&A Team § M&A: successfully driving expansion of addressable markets, product offerings and customer base. Jim Pelrin – President & CEO Hugh Regan – Secretary, Treasurer and CFO Roger Campbell – Vice President OperaHons Frank Coladonato – Vice President Finance Laura Ferrante – Director Corporate De
Slide 8: Strategic M&A Enhances Growth
Strategic M&A Enhances Growth § Technology investments and successful acquisiHon track record have led to new Ambrell markets and customers, addiHonal revenue Thermal Products opportuniHes, and margin expansion Thermonics Thermal § Extensive M&A screening process to Products idenHfy transacHon oppor
Slide 9: inTEST Organization
inTEST Organization § TEST SOLUTIONS – Electrical Mechanical Semiconductor (EMS) and Thermal Test (iTS) soluHons for Automated Test Equipment (Semi) applicaHons within the semiconductor and industrial manufacturing markets § PROCESS SOLUTIONS – Advanced inducHon heaHng soluHons for joining and formi
Slide 10: Ambrell Significantly Enhances Market Opportunity
Ambrell Significantly Enhances Market Opportunity $620M Annual Market Semi Market Semiconductor $100MM Non-Semi Market Automo,ve Aerospace/Defense Industrial + Machinery $520MM + Consumer + Food & Beverage Telecommunica,ons Semi Non-Semi 10 www.inTEST.com
Slide 11: Ambrell Significantly Diversifies End Markets
Ambrell Significantly Diversifies End Markets • Revenue segmentaHon before and ajer Ambrell acquisiHon Pre-Ambrell AcquisiHon Post-Ambrell AcquisiHon 25% 50% 50% 75% Semi Non-Semi Semi Non-Semi 11 www.inTEST.com
Slide 12: Ambrell Adds Process Solutions Revenues
Ambrell Adds Process Solutions Revenues (We’re Not Just Semi Anymore) Pre-Ambrell AcquisiHon Post-Ambrell AcquisiHon 33% 67% 100% Test Solu,ons Process Solu,ons Test Solu,ons Process Solu,ons 12 www.inTEST.com
Slide 13: Serving Diverse Markets
Serving Diverse Markets Semi Aerospace / Defense Hardware to interface Temperature systems deliver with testers to cryogenic temperatures to develop and test AutomoHve simulate the extreme semiconductors condiHons of space Infotainment systems electronics undergo criHcal temperature tesHng to ensure
Slide 14: Serving Diverse Markets
Serving Diverse Markets Industrial Manufacturing Industrial Equipment Thermal equipment Ultra-low temperatures delivers focused heaHng provide cooling to TelecommunicaHons for forging and joining condiHon fuel for jet metals engine tesHng Thermal sources used for test and producHon of opHcal cables
Slide 15: Market Mix – Focus on Growth Markets
Market Mix – Focus on Growth Markets Telecom Industrial Defense / Aero Automo,ve Others TTM Bookings ATE $ 40.2M 54% Telecom 8.4 11% Industrial 20.0 27% ATE Defense / Aero 4.5 6% Automo,ve 0.6 1% Others 0.9 1% Total Bookings $74.6M 15 www.inTEST.com
Slide 16: ATE-Related Market
ATE-Related Market Share ThermoStreams for Thermal Semiconductor Test 70% Manipulator 10% Docking 20% EMS Interface Products 30% 16 www.inTEST.com
Slide 17: Thermal Test Market (Non-ATE)
Thermal Test Market (Non-ATE) Environmental Test Market - $120 million* 10% estimated market share* § MobileTemp ThermoStreams § Thermal Chambers § Platforms * Based upon Frost & Sullivan “Worldwide Environmental Test Market: 2013” 17 www.inTEST.com
Slide 18: Thermal Process Market (Non-ATE)
Thermal Process Market (Non-ATE) Industrial Manufacturing Market - $400 million 5% estimated market share § EasyHeat® Induction Heating Systems § EKOHeat® Industrial Heating Systems 18 www.inTEST.com
Slide 19: Thermal Test Capabilities
Thermal Test Capabilities +932°F +500°C Missile Guidance Space Research Communica,on -60°C - 150°C -185°C - 350°C Satellite -65°C - 200°C Network Infrastructure -10°C - 60°C Custom Design Thermal Engine -301°F -65°C - 200°C Tensile Tes,ng LED Extended Life Test -185°C -40°C - 85°C -100°C - 200°C 19
Slide 20: Thermal Process Capabilities
Thermal Process Capabilities +5450°F 500 kW +3000°C Aerospace Automo,ve Annealing ammuni,on Hot heading, brazing, Brazing, metal-to-plas,c, casings annealing, shrink fihng curing, hardening 1-10 kW 1-100 kW 1-500 kW Food/Packaging Medical Cap sealing, Brazing, catheter ,pping, Oil and Gas roller hea,
Slide 21: Diverse Customer Base
Diverse Customer Base Top 10 Customers Contribute 41% of Total Sales (3/31/18) TI Foxconn OpHcal Hakuto LPE* Nextrom* Analog Devices NXP Semi Cypress Semi Raytheon Aixtron* *Ambrell Customer 21 www.inTEST.com
Slide 22: ATE Customers
ATE Customers END USER OEM 22 www.inTEST.com
Slide 23: Growing Non-ATE Test Customer Base
Growing Non-ATE Test Customer Base 23 www.inTEST.com
Slide 24: Growing Non-ATE Industrial Manufacturing Customer Base
Growing Non-ATE Industrial Manufacturing Customer Base 24 www.inTEST.com
Slide 25: Growth Drivers
Growth Drivers § AutomoHve electronics and advanced manufacturing processes – engine management, entertainment, communicaHons, collision avoidance § Mobile communicaHons – modules for smart phones, tablets, hand-held devices (Apple, Samsung, Qualcomm) § Consumer and industrial sensors § High-stress
Slide 26: Financial Overview
Financial Overview 26 www.inTEST.com
Slide 27: Operating Model
Operating Model 2014 2015 2016 2017 2018 YTD Gross Margin 49% 48% 51% 53% 50% SG&A 29% 31% 31% 30% 29% a a a Eng. & Prod. 9% 10% 9% 6% 7% Development Operating 14% 7% 11% 17% 14% Margin b b bc c a Includes due diligence and other acquisiHon related expenses: 2015 - $329K; 2016 - $456K; 2017 - $905K.
Slide 28: Financial Results
Financial Results $M REVENUE 19.4 18.9 GROSS MARGIN 17.4 15.9 14.2 55% 51% 47% 43% Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 2017 2018 2017 2018 60% NON SEMI as % REV ADJUSTED EPS $0.30 50% $0.20 40% 30% $0.10 20% $0.00 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 2017 2018 2017 2018 28 www.inTEST.com
Slide 29: Balance Sheet Highlights
Balance Sheet Highlights As of 3/31/2018 Cash & Cash Equivalents $14.4M Working Capital $17.6M Total Assets $65.4M Contingent Acquisition Liability $12.8M Long-Term Debt $ - Shareholder Equity $39.8M 29 www.inTEST.com
Slide 30: Q2 2018 Guidance (Provided May 3, 2018)
Q2 2018 Guidance (Provided May 3, 2018) Net Revenue $19.0M to $20.0M GAAP Net Earnings $0.20 to $0.24 diluted EPS Non- GAAP Adjusted Net Earnings $0.22 to $0.26 diluted EPS Gross Margin 51% to 52% Product Mix Q2’18 more favorable vs. Q1’18 Net income guidance is based upon current expecta-ons and ma
Slide 31: inTEST – We're Not Just Semi, We Make Things Hot & Cold
inTEST – We’re Not Just Semi, We Make Things Hot & Cold § Growth opportuniHes through focused acquisi,on strategy with a 50% revenue diversifica,on outside ATE market § Expansion of ver,cal markets outside of ATE market with thermal technologies § Highly leveraged P&L with no debt and significant borr
Slide 32: Investor Contacts
Investor Contacts inTEST Corporation Hugh T. Regan Treasurer & CFO h.regan.jr@intest.com Guerrant Associates Laura Guerrant-Oiye (808) 960-2642 lguerrant@guerrantir.com 32 www.inTEST.com