Slide 1: New Directions in Thermal Solutions
inTESTMARKETS Corporation New Directions in Thermal Solutions Robert Ma*hiessen Q2 2017 Pres., CEO & Exec. Chairman July 1 – September 30, 2017 Hugh T. Regan, Jr. Treasurer & CFO James Pelrin EVP & COO 1
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: inTEST Summary Metrics
inTEST Summary Metrics Symbol INTT Stock Price (09/01/17) $7.60 Trading Range (52 wk.) $3.65 - $9.50 Trailing PE (*m) 16.89 Market Cap $ 78M Shares Out 10.3M Revenue (*m) $51.2M EPS (*m) $ 0.45 Cash $7.6M Headcount 217 Founded 1981 3
Slide 4: inTEST Investment Thesis
inTEST Investment Thesis § Deliver specialty high-margin products for mission-criZcal applicaZons in non- ATE markets including: Auto, Consumer Electronics, Defense/Aerospace, Telecom, and Industrial § Provide customers yield improvement test solu0ons, which drive revenue growth § Deliver profits and
Slide 5: Accomplishing Our Goals – Why Ambrell
Accomplishing Our Goals – Why Ambrell ü Thermal related technology ü Non ATE ü 50% Market diversifica;on outside of ATE ü Known technology ü Wide scale base into industrial manufacturing sector ü Broader customer diversifica;on 5
Slide 6: inTEST Organization
inTEST Organization inTEST Thermal EMS Products inTEST Thermal Solu;ons Ambrell ATE & Non-ATE Industrial ATE Test Manufacturing 6
Slide 7: Serving a Variety of Markets
SERVING A VARIETY OF MARKETS Defense / Aerospace ATE Automo;ve Industrial Industrial Telecommunica;ons Equipment Manufacturing 7
Slide 8: Historical Served Markets - Test
Historical Served Markets - TEST : § Semiconductor Manufacturers – End Users (Test Facilities, Labs, Production Floor) § ATE Equipment Suppliers – OEM Non-ATE Markets: Automotive, consumer electronics, defense/aero, telecom, industrial 8
Slide 9: Markets Before Ambrell
inTEST Markets Before Ambrell ATE $100M Non-ATE $120M Total $220M Non ATE ATE Market 25% • Semiconductor ATE Non-ATE Market 75% • Telecommunica;ons Non-ATE Applica;ons • Automo;ve Percent of inTEST business • Defense/Aerospace • Industrial 9
Slide 10: Markets Post Ambrell
inTEST Markets Post Ambrell ATE $100M Non-ATE $520M Total $620M Non ATE 50% § Semiconductor ATE ATE § Automo;ve 50% § Defense/Aerospace § Telecommunica;ons § Industrial Percent of inTEST business § Medical § Consumer § Food & Beverage 10
Slide 11: Market Mix
Market Mix Telecom Custom applica;on of INTT Thermal Industrial Solu;ons drives growth in ver;cal Defense / Aero markets Automo;ve Others TTM Bookings ATE $ 31.5M 69% Telecom 7.4 16% Industrial 0.7 2% ATE Defense / Aero 3.7 9% Automo;ve 0.6 1% Others 1.4 3% Total Bookings $45.3M 11
Slide 12: inTEST Product Segments
inTEST Product Segments % of Revenue 2014 2015 2016 Thermal 56 62 59 Mechanical 27 19 21 17 19 20 Electrical Effec;ve January 1, 2017 the Mechanical and Electrical segments were aggregated into the EMS segment for repor;ng purposes. 12
Slide 13: Thermal EMS
ATE-Related Market Share ThermoStreams for Thermal Semiconductor Test 70% Manipulator 10% Docking 20% EMS Interface Products 30% 13
Slide 14: Thermal Products - Test
Thermal Products - Test Environmental Test Market - $120 million* 10% estimated market share* Growth through Non-ATE Test Applications • MobileTemp ThermoStreams • Thermal Chambers • Platforms * Based upon Frost & Sullivan “Worldwide Environmental Test Market: 2013” 14
Slide 15: Thermal Products – Industrial Manufacturing
Thermal Products – Industrial Manufacturing Industrial Manufacturing Market - $400 million 5% estimated market share • EasyHeat Induction Heating Systems • EKOHeat Industrial Heating Systems 15
Slide 16: Custom Test Solutions
inTEST Custom Test Solutions 16
Slide 17: Custom Test Solutions
inTEST Custom Test Solutions § Energy application for testing sensors and electronics § Three zone chamber allows independent temperature control across entire assembly § Satellite application for testing microwave amplifiers § Two-zone plate provides heat sink for power supply while simulating wave
Slide 18: Custom Thermal Test Solutions
inTEST Custom Thermal Test Solutions +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 -10
Slide 19: Industrial Manufacturing Solutions
inTEST Industrial Manufacturing Solutions 500 kW Ammuni;on Aerospace Automo;ve Annealing ammuni;on Hot heading, brazing, Brazing, metal-to-plas;c, casings annealing, shrink fiing curing, hardening 1-10 kW 1-100 kW 1-500 kW Food/Packaging Medical Oil and Gas Cap sealing, roller Brazing, catheter ;ppin
Slide 20: Diverse Customer Base
Diverse Customer Base Top 10 Customers Contribute 55% of Total Sales TI Cypress Semi Hakuto Naigaitec Teradyne Foxconn OpZcal Analog Devices ST Micro NXP Semi Xcerra During 2015-2016, over 40 ATE customers merged. 20
Slide 21: ATE Customers
ATE Customers © XILINX ALL PROGRAMMABLE XCerra ¥ EKADYNE} Re Nie SONY A CASCADE om °° = EE | OC ammeter MAXIM ee @BROADCOM Mict Foc US NEC & PHILIPS END usEpesilil (OEM 21 por /SOLUTIONS
Slide 22: Growing Non-ATE Test Customer Base
Growing Non-ATE Test Customer Base 22
Slide 23: Growing Non-ATE Industrial Manufacturing Customer Base
Growing Non-ATE Industrial Manufacturing Customer Base 23
Slide 24: Growth Drivers
Growth Drivers § Mobile communica;ons – modules for smart phones, tablets, hand-held devices (Apple, Samsung, Qualcomm) § Automo;ve electronics – engine management, entertainment, communica;ons, collision avoidance § Consumer / automo;ve sensors § High-stress environments (Defense/Aerospace) § Food
Slide 25: M&A Bolsters Growth Opportunities
M&A Bolsters Growth Opportunities § Technology investments and Ambrell Corp. successful acquisiZons lead Thermal Products to new markets, revenue Thermonics, Inc. Thermal Products & margin expansion Sigma Systems Thermal Products § 79% of 2016 revenues derived from M&A Intelogic Tech EMS Temptronic
Slide 26: Financial Overview
Financial Overview ” NYSE New York Stock Exchange
Slide 27: Operating Model
inTEST Operating Model 2011 2012 2013 2014 2015 2016 2017 YTD Gross margin 48% 44% 48% 49% 48% 51% 54% SG&A 25% 27% 29% 29% 31% 31% 29% a a a a Eng. & Prod 7% 9% 9% 9% 10% 9% 7% Dev. Operating 16% 8% 10% 14% 7% 11% 18% Margin b c c c a Includes due diligence and other acquisiZon related expenses: 20
Slide 28: Financial Results
Financial Results $M REVENUE 15.9 GROSS MARGIN 10.3 14.2 8.6 10.5 10.8 55% 51% 47% 43% Q1 Q2 Q3 Q4 Q1 Q2 Q1 Q2 Q3 Q4 Q1 Q2 2016 2017 2016 2017 NON SEMI as % REV 0.20 EPS 40% 0.10 20% 0.00 Q1 Q2 Q3 Q4 Q1 Q2 Q1 Q2 Q3 Q4 Q1 Q2 2016 2017 2016 2017 28
Slide 29: Gross Margin
inTEST Gross Margin GROSS MARGIN DRIVERS 55% 53% Improved CompeZZve Consolidated 51% Landscape Manufacturing 49% Manufacturing Product Mix Outsourcing 47% 45% OperaZonal NEW Products Efficiencies 43% 2012 2013 2014 2015 2016 2017 YTD 29
Slide 30: Balance Sheet Highlights
Balance Sheet Highlights As of 06/30/2017 9/30/16 Cash & Cash Equivalents $ 7.6M Working Capital $16.6M Total Assets $56.7M Contingent Acquisition Liability $ 2.3M Long-Term Debt $ - Shareholder Equity $41.6M 30
Slide 31: Q3 2017 Guidance
Q3 2017 Guidance (Provided August 3, 2017) § Net revenue ranging from $17.5M to $18.5M § Net earnings ranging from $0.12 to $0.16 diluted EPS § Gross margin ranging from 48% to 50% § Q3’17 product mix less favorable compared with Q2’17 § Net income guidance is based upon current expecta7ons and may
Slide 32: inTEST Positioned for Growth
inTEST Positioned for Growth § Growth opportuniZes 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 borrowing capacity to fund grow
Slide 33: Investor Contacts
Investor Contacts inTEST Corporation Hugh T. Regan Jr. Treasurer & CFO h.regan.jr@intest.com Guerrant Associates Laura Guerrant-Oiye (808) 960-2642 lguerrant@guerrantir.com 33