Slide 1: inTEST Corporation Q4 2022 Financial Results Conference Call
inTEST Corporation Q4 2022 Financial Results Conference Call Nick Grant, President and CEO Duncan Gilmour, CFO March 3, 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 ➢ Solid execution by our results-driven team delivered record 5-Point Strategy performance in 2022 ▪ Integrated three strategic acquisitions ▪ Expanded customer base and increased channel partners ▪ Innovated in collaboration with our customers and suppl
Slide 4: Revenue
Revenue ($ in millions) ➢ Record Q4 revenue up $10.0 million, or 45% y/y $32.4 $29.6 $30.8 ▪ Organic revenue (non-GAAP)(1) of $28.6 million grew 28% y/y $24.1 $22.4 ▪ Included $3.8 million of acquired revenue ➢ Strong demand across all technology offerings and end-markets Q4 21 Q1 22 Q2 22 Q3 22 Q4
Slide 5: Gross Profit and Margin
Gross Profit and Margin ($ in millions) Quarters $15.0 ➢ Sequentially, Q4 margin improved 100 bp to $13.5 $13.9 46.2% from 45.2% driven by higher volume and $11.0 $10.3 beneficial product mix ➢ Year over year, Q4 gross profit increased $4.6 million, or 45% 46.3% 45.7% 45.8% 45.2% 46.2% Q4 21 44.7% Q
Slide 6: Operating Expenses
Operating Expenses Investing in people and marketing to support 5-Point Strategy for Growth ($ in millions) Operating expenses as a % of sales ➢ As percent of revenue, operating expenses 45.0% 42.4% 36.6% 34.9% 33.8% declined to 33.8% in Q4 2022 versus 45.0% in the prior year and 34.9% in the prior
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) $0.34 Quarters $5.3 $0.28 $0.30 $4.5 $0.25 $4.2 $0.23 $3.2 $0.20 $2.5 $2.1 $2.1 $0.12 $1.4 $0.07 $0.6 $0.05 $0.3 $0.03 6.1%
Slide 8: Capital Structure and Cash Flow
Capital Structure and Cash Flow ($ in millions) Capitalization Cash Flow Year Ended 12/31/22 9/30/22 12/31/22 12/31/21 Cash and cash equivalents $ 13.4 $ 8.9 Net cash provided by (used $ (1.4) $ 10.8 Restricted cash $ 1.1 $ 1.1 in) operating activities Short term investments $ - $ 3.5 Capital expend
Slide 9: Orders and Backlog
Orders and Backlog ($ in millions) Orders $40.5 $32.7 ➢ Q4 orders up 3% y/y with increases across all end $30.5 $31.3 $25.1 markets except in semi ▪ Book-to-bill(1) of 0.97x ▪ Decline in semi as Q4 2021 benefitted from a $10.0 million front-end, long-term order Q4 21 Q1 22 Q2 22 Q3 22 Q4 22 ▪ Sequen
Slide 10: 2023 Expectations
2023 Expectations ➢ Executing 5-Point Strategy to continue driving growth 5-Point Strategy ➢ 2023 Q1 Guidance(1) ▪ Q1 revenue: $30 million to $32 million ▪ Q1 gross margin: ~45% ▪ Q1 operating expenses: $11.1 million to $11.3 million Global & Innovation & Market • Q1 amortization (after tax) ~$450,0
Slide 11: Executing to Plan
Executing to Plan ($ in millions) ~$200 to $250 Potential Future Acquisitions $125 - $130 $117 $85 $54 ∕∕ 2020 2021 2022 2023E 2025E Actual Revenue Estimated Revenue(1) (1) Estimated 2025 revenue, including estimated revenue from future potential acquisitions, is based on management’s current views
Slide 12: Scale Expected to Drive Operating Leverage
Scale Expected to Drive Operating Leverage ($ in millions) Division Operating Income(1) Adjusted EBITDA(2) Net Earnings (Unaudited) ~ $40 + ~ $30 + $22 ~ $20 + $19 $16 $12 $8 $7 22% 19% ~20% 14% 14% ~15% 9% 7% ~10% ∕∕ ∕∕ ∕∕ 2021 2022 2025E (3) 2021 2022 2025E (3) 2021 2022 2025E(3) (1) See segment r
Slide 13: Execution on Track with Plan
Execution on Track with Plan Strong demand for inTEST’s innovative technologies and engineering expertise Diversified end markets with strong secular growth drivers Growing customer base, deepening customer reach and expanding geographically Financial flexibility to execute growth strategy Executing
Slide 14: Conference Call Playback Info Upcoming Events
Conference Call Playback Info ➢ Replay Number: (412) 317-6671 passcode: 13735047 ➢ Telephone replay available through March 10, 2023 ➢ Webcast / Presentation / Replay available at ir.intest.com ➢ Transcript, when available, at ir.intest.com Upcoming Events ➢ March 23, 2023 Sidoti Small Cap Conferenc
Slide 15: Supplemental Information
inTEST Corporation Q4 2022 Financial Results Conference Call Supplemental Information March 3, 2023
Slide 16: Reconciliation of Revenue to Organic Revenue (Non-GAAP)
Reconciliation of Revenue to Organic Revenue (Non-GAAP) ($ in thousands) Three Months Ended December 31, December 31, Change 2022 2021 $ % Total revenue $ 32,405 $ 22,358 $ 10,047 44.9% (1) Less: acquired revenue (3,778) n/a Organic revenue (Non-GAAP) $ 28,627 $ 22,358 $ 6,269 28.0% Years Ended Dece
Slide 17: Reconciliation of Net Earnings to Adjusted Net Earnings and Adjusted 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 12/31/2021 3/31/2022 6/30/2022 9/30/2022 12/31/2022 12/31/2021 12/31/2022
Slide 18: Reconciliation of Net Earnings to Adjusted EBITDA (Quarterly)
Reconciliation of Net Earnings to Adjusted EBITDA (Non-GAAP) and Adjusted EBITDA Margin (Non-GAAP) ($ in thousands) Three Months Ended 12/31/2021 3/31/2022 6/30/2022 9/30/2022 12/31/2022 Net earnings $ 287 $ 577 $ 2,116 $ 2,524 $ 3,244 Acquired intangible amortization 522 782 765 595 552 Interest ex
Slide 19: Reconciliation of Net Earnings to Adjusted EBITDA (Annual)
Reconciliation of Net Earnings to Adjusted EBITDA (Non-GAAP) and Adjusted EBITDA Margin (Non-GAAP) ($ in thousands) Years Ended December 31, 2019 2020 2021 2022 Net earnings (loss) $ 2,322 $ (895) $ 7,283 $ 8,461 Acquired intangible amortization 1,257 1,233 1,440 2,694 Interest expense - 33 89 600 I
Slide 20: Reconciliation of First Quarter 2023 Estimated EPS to Adjusted EPS
Reconciliation of First Quarter 2023 Estimated Earnings Per Share – Diluted to Estimated Adjusted Earnings Per Share – Diluted (Non-GAAP) Low High Estimated earnings per share – diluted $ 0.21 $ 0.26 Estimated acquired intangible amortization 0.05 0.05 Estimated tax adjustments (0.01) (0.01) Estimat
Slide 21: Segment Reporting
Segment Reporting ($ in thousands) Beginning in the first quarter of 2022, the Company made a change to its reportable segments from two reportable segments to three reportable segments – Electronic Test, Environmental Technologies and Process Technologies. These segments, which operate as Divisions