Intest Corporation · AMEX:INTT
Intest — Southwest IDEAS Conference 2022
32 slides from Intest's conference presentation, Nov 16, 2022
Slide 1: inTEST Corporation – Southwest IDEAS Conference
inTEST Corporation Southwest IDEAS Conference Nick Grant Duncan Gilmour President and CEO Chief Financial Officer November 16, 2022
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: Unlocking The Potential
Unlocking The Potential Vision To be the supplier of choice for innovative test and process technology solutions Leverage our deep industry knowledge & expertise to develop and deliver high quality, Mission innovative customer solutions and superior support for complex global challenges Nick Grant,
Slide 4: Transforming inTEST
Transforming inTEST Supplier of Choice for Innovative Test and Process Technology Solutions Robust long-term growth strategy Emphasis on diversified growth markets Electronic and acquisitions Test 34% Process Q3’22 TTM Technologies Clear, consistent, continuous investor and Revenue 39% employee comm
Slide 5: 5-Point Strategy Drives Long-Term Value
5-Point Strategy Drives Long-Term Value ➢ Grow Top-Line Through Geographic ➢ Drive Innovation and and Market Expansion Technological Differentiation ▪ Further penetrate existing markets with Global & ▪ Leverage expertise to deliver highly-valued Innovation & infrastructure investments Market Differe
Slide 6: Strong Foundation For Growth
Strong Foundation For Growth inTEST: Known for Highly-Engineered, Customer-Driven Solutions Growing and Diversified Markets Blue-Chip Global Customer Global Presence Blue-Chip Global Customer Base Base ➢ Semiconductor ➢ TTM Q322 Revenue: $106.8M ➢ Industrial ▪ 35.4% APAC ➢ Automotive/EV ▪ 43.6% Amer
Slide 7: Serving Large and Diverse Markets
Serving Large and Diverse Markets ($ in millions) inTEST $2.0B+ SAM* Entering 2022 Electronic Environmental Process Test Technologies Technologies ~$350M ~$680M ~$1.3B+ Serviceable Addressable Markets (SAM) $150 $200 $180 $500 $310 $1B+ Semi Test In-Circuit Test Thermal Test Cold Chain Induction Ima
Slide 8: Driving Market Leadership/Opportunities
Driving Market Leadership/Opportunities Targeting markets with strong, secular tailwinds inTEST Revenue by Market* Expected 5-Year Markets Market Growth** Served 3% to 6% Semi Markets Industrial 3% to 6% Defense/Aero 3% to 6% 2021 2022E 2025E Targeted Growth Markets Auto/EV 5% to 8% Life Science 6%
Slide 9: Electronic Test
Electronic Test Engineering solutions for the toughest challenges in automated test ➢ Market footprint expands beyond Semi to include Industrial, Auto/EV, Life Sciences and Defense/Aero ➢ Bringing automation/integration to back-end semi test; solutions enable testers to work with virtually all handl
Slide 10: Environmental Technologies
Environmental Technologies Creating and controlling environmental conditions in test, process and storage applications ➢ Born in Semi, product standardization and acquisitions broadened markets significantly: ▪ Life Sciences cold chain solutions serves vaccine development, medical advancements and c
Slide 11: Process Technologies
Process Technologies Technical expertise and customized solutions for industrial applications ➢ Addressable market expands through product development, global lab extension and acquisitions: ▪ Induction heating and recently acquired Videology camera applications combine to serve large, diverse and g
Slide 12: Making M&A a Core Competency
Making M&A a Core Competency M&A Eco-System Deal Focus Acquire quality businesses to drive shareholder value Expand into fast growing markets Offer broader portfolio of solutions Strategy M&A Development Execution Drive further market diversification M&A Eco- Enhance value-added technology System Co
Slide 13: M&A / Corporate Development
M&A / Corporate Development Significant progress made in year one of strategy deployment Completed three acquisitions (4th Quarter 2021) Disciplined M&A process in place from target investigation to integration Focus on expanding technologies, geographies and markets served Building a strong M&A eco
Slide 14: Financial Overview
Financial Overview 14
Slide 15: Revenue
Revenue ($ in millions) $30.8 $29.6 ➢ Q3 record revenue up $9.6 million, or 46% y/y $24.1 $21.1 $22.4 ▪ Organic revenue (non-GAAP)(1) of $26.0 million grew 23% y/y ▪ Acquisitions added $4.8 million of revenue Q3 21 Q4 21 Q1 22 Q2 22 Q3 22 ➢ Strong improvement across target markets ▪ Solid demand in
Slide 16: Gross Profit and Margin
Gross Profit and Margin ($ in millions) Quarters ➢ Q3 gross profit increased $3.5 million, $13.5 $13.9 or 34% y/y $10.4 $10.3 $11.0 ▪ Margin contraction vs. prior-year period result of less favorable product mix ➢ Sequentially, Q3 margin contracted slightly 49.2% 46.3% 45.7% 45.8% 45.2% ▪ Primary fa
Slide 17: Operating Expenses
Operating Expenses Investing in people and marketing to support 5-Point Strategy for Growth ($ in millions) Operating expenses as a % of sales ➢ Q3 operating expenses up $2.9 million y/y 37.1% 45.0% 42.4% 36.6% 34.9% ▪ Impacted by $2.4 million in incremental expenses from acquisitions $10.8 $10.7 $1
Slide 18: Earnings and Adjusted EBITDA
Earnings and Adjusted EBITDA ($ in millions, except per share data) ➢ Demonstrating operating leverage as the Adjusted EBITDA and Margin(1) organization scales to further drive earnings power Quarters ➢ Adjusted EPS reflects $492,000 (after tax) of $4.5 $4.2 acquired intangible amortization. $3.4 $2
Slide 19: Capital Structure and Cash Flow
Capital Structure and Cash Flow ($ in millions) Capitalization Year Cash Flow Nine Months Ended Ended 9/30/22 6/30/22 9/30/22 9/30/21 12/31/21 Cash and cash equivalents $ 8.9 $ 10.5 Net cash provided by Restricted cash $ 1.1 $ -- (used in) operating $ (3.7) $ 8.1 $ 10.8 activities (GAAP) Short term
Slide 20: Orders and Backlog
Orders and Backlog ($ in millions) Orders $40.5 ➢ Orders up 55% y/y with strong demand from nearly $32.7 $30.5 all end markets $25.1 $21.1 ▪ Book-to-bill of 1.06x ▪ Acquisitions added to demand especially in security and defense ▪ Semi front-end and back-end orders strengthened Q3 21 Q4 21 Q1 22 Q2
Slide 21: Q4 2022 Expectations
Q4 2022 Expectations ➢ Executing 5-Point Strategy to continue driving growth 5-Point Strategy ➢ 2022 Q4 Guidance(1) ▪ Q4 revenue: $30 million to $32 million ▪ Q4 gross margin: ~45% Global & Innovation & ▪ Q4 operating expenses: $10.7 million to $10.9 million Market Differentiation Expansion ▪ Q4 int
Slide 22: Executing to Plan
Executing to Plan ($ in millions) ~$200 to $250 Potential Future Acquisitions ~$115 $85 $54 ∕∕ 2020 2021 2022E 2025E 22
Slide 23: Scale Expected to Drive Operating Leverage
Scale Expected to Drive Operating Leverage ($ in millions) Division Operating Income* Adjusted EBITDA1 Net Income (Loss) ~ $40 + ~ $30 + ~ $20 + $19 $12 $7 $7 $1 13% 22% ~20% 2% 14% ~15% 9% ~10% ($1) ∕∕ ∕∕ ∕∕ 2020 2021 2025E 2020 2021 2025E 2020 2021 2025E 1 Adjusted EBITDA is a non-GAAP financial m
Slide 24: Execution on Track with Plan
Execution on Track with Plan Strong demand for inTEST’s innovative technologies and engineering expertise Diversified end markets with strong secular growth drivers Growing customer base, deepening customer reach and expanding geographically Financial flexibility to execute growth strategy Executing
Slide 25: inTEST Corporation
inTEST Corporation Southwest IDEAS Conference Nick Grant Duncan Gilmour President and CEO Chief Financial Officer November 16, 2022
Slide 26: Supplemental Information
Supplemental Information 26
Slide 27: Organic Revenue Reconciliation
Organic Revenue Reconciliation ($ in thousands) Three Months Ended Change Change 9/30/2022 6/30/2022 $ % 9/30/2021 $ % Total revenue (GAAP) $ 30,771 $ 29,571 $ 1,200 4.1% $ 21,144 $ 9,627 45.5% Less: Revenue from acquired (4,754) (5,221) (467) -8.9% - 4,754 NM businesses(1) Organic revenue (Non-GAAP
Slide 28: Adjusted Net Earnings Reconciliation
Adjusted Net Earnings Reconciliation ($ in thousands) Three Months Ended 9/30/2021 12/31/2021 3/31/2022 6/30/2022 9/30/2022 Net earnings (GAAP) $ 2,175 $ 287 $ 577 $ 2,116 $ 2,524 Acquired intangible amortization 309 522 782 765 595 Tax adjustments (4) (10) (93) (162) (103) Adjusted net earnings (No
Slide 29: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation ($ in thousands) Three Months Ended 9/30/2021 12/31/2021 3/31/2022 6/30/2022 9/30/2022 Net earnings (GAAP) $ 2,175 $ 287 $ 577 $ 2,116 $ 2,524 Acquired intangible amortization 309 522 782 765 595 Interest expense 4 83 137 133 166 Income tax expense 357 (51) 78 454 515
Slide 30: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation ($ in thousands) Year/TTM 2019 2020 2021 TTM Q3 2022 Net earnings (GAAP) $ 2,322 $ (895) $ 7,283 $ 5,504 Acquired intangible amortization 1,257 1,233 1,440 2,664 Interest expense - 33 89 519 Income tax expense 282 (336) 1,119 996 Depreciation 685 630 666 736 Non-cash s
Slide 31: Adjusted EPS Reconciliation
Adjusted EPS Reconciliation Estimated Q4 2022 Guidance Low High Estimated earnings per share – diluted (GAAP) $ 0.20 $ 0.25 Estimated acquired intangible amortization 0.06 0.06 Estimated tax adjustments (0.01) (0.01) Estimated adjusted earnings per share – diluted (Non-GAAP) $ 0.25 $ 0.30 31
Slide 32: Segment Reporting
Segment Reporting Reclassification of 2021 ($ in thousands) Quarter Ended Year Ended 9/30/2021 12/31/2021 3/31/2022 6/30/2022 9/30/2022 12/31/2021 Electronic Test $ 8,103 $ 6,851 $ 8,778 $ 9,797 $ 10,408 $ 32,509 Environmental Technologies 6,875 7,176 6,993 7,507 7,631 26,896 Process Technologies 6,