Slide 1: inTEST Corporation Q3 2022 Financial Results Conference Call
inTEST Corporation Q3 2022 Financial Results Conference Call Nick Grant, President and CEO Duncan Gilmour, CFO November 4, 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: Demonstrating Success of 5-Point Strategy
Demonstrating Success of 5-Point Strategy ➢ Solid execution driving results 5-Point Strategy ▪ Maintaining focus on target markets ▪ Delivering reliable, highly engineered solutions ▪ Leveraging expanding sales presence ➢ Delivered record revenue of $30.8 million, 46% y/y growth Global & Market Inno
Slide 4: Revenue
Revenue ($ 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 $4.8 million of revenue Q3 21 Q4 21 Q1 22 Q2 22 Q3 22 ➢ Strong improvement across target markets ▪ Solid demand in
Slide 5: Gross Profit and Margin
Gross Profit and Margin ($ in millions) Quarters ➢ Q3 gross profit increased $3.5 million, $13.5 $13.9 or 34% y/y $10.4 $10.3 $11.0 ▪ Margin contraction vs. prior-year period result of less favorable product mix ➢ Sequentially, Q3 margin contracted slightly 49.2% 46.3% 45.7% 45.8% 45.2% ▪ Primary fa
Slide 6: Operating Expenses
Operating Expenses Investing in people and marketing to support 5-Point Strategy for Growth ($ in millions) Operating expenses as a % of sales ➢ 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 $1
Slide 7: Earnings and Adjusted EBITDA
Earnings and Adjusted EBITDA ($ 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 $2
Slide 8: Capital Structure and Cash Flow
Capital Structure and Cash Flow ($ 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 9: 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 10: 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 $10.9 million Market Differentiation Expansion ▪ Q4 int
Slide 11: Executing to Plan
Executing to Plan ($ in millions) ~$200 to $250 Potential Future Acquisitions ~$115 $85 $54 ∕∕ 2020 2021 2022E 2025E 11
Slide 12: Scale Expected to Drive Operating Leverage
Scale Expected to Drive Operating Leverage ($ 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% ($1) ∕∕ ∕∕ ∕∕ 2020 2021 2025E 2020 2021 2025E 2020 2021 2025E (1) Adjusted EBITDA is a non-GAAP financial
Slide 13: Execution on Track with Plan
Execution on Track with Plan Strong demand for inTEST’s innovative technologies and engineering expertise Diversified end markets with strong secular growth drivers Growing customer base, deepening customer reach and expanding geographically Financial flexibility to execute growth strategy Executing
Slide 14: Conference Call Playback Info and Upcoming Events
Conference Call Playback Info ➢ Replay Number: (412) 317-6671 passcode: 10171527 ➢ Telephone replay available through November 11, 2022 ➢ Webcast / Presentation / Replay available at ir.intest.com ➢ Transcript, when available, at ir.intest.com Upcoming Events ➢ Southwest IDEAS Conference on November
Slide 15: Supplemental Information
inTEST Corporation Q3 2022 Financial Results Conference Call Supplemental Information November 4, 2022
Slide 16: Organic Revenue Reconciliation
Organic Revenue Reconciliation ($ 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 17: 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 18: 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 19: 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 20: 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 20
Slide 21: 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,