Slide 1: Third Quarter 2023 Financial Results Conference Call
inTEST Corporation Third Quarter 2023 Financial Results Conference Call Nick Grant, President and CEO Duncan Gilmour, CFO and November 3, 2023 Treasurer
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 5-Point Strategy ➢ Record quarterly revenue of $32.7 million, up 6% y/y ➢ Continued execution of 5-Point Strategy for Growth Global & ▪ Driving y/y growth in sales, operating income, net earnings and Market Innovation & Differentiation Adjusted EBITDA(1)
Slide 4: Revenue
Revenue ($ in millions) Years Quarters ➢ Record revenue in Q3 of $32.7 million, $129.5 up $1.9 million, or 6% y/y $116.8 $32.7 $30.8 $84.9 ➢ Y/Y quarterly comparison: $53.8 ▪ Strong sales across most markets and technology offerings 2020 2021 2022 TTM Q3 2022 Q3 2023 ▪ Defense/aerospace revenue incr
Slide 5: Gross Profit and Margin
Gross Profit and Margin ($ in millions) Years Quarters ➢ Q3 gross margin of 46.9% improved 170 bps y/y ▪ Reflects higher volume, favorable product mix, improved pricing, and continued focus on $60.4 productivity improvements $53.4 $15.3 $13.9 ▪ Sequential increase of 70 bps primarily due to more $41
Slide 6: Operating Expenses
Operating Expenses Investing in people and marketing to support 5-Point Strategy for Growth ($ in millions) Operating expenses as a % of sales ➢ Q3 operating expenses up $1.3 million y/y, and increased as a percent of sales to 47.0% 38.6% 36.6% 35.7% 34.9% 36.9% 36.9% Years Quarters ▪ Majority of Op
Slide 7: Earnings and Adjusted EBITDA (Non-GAAP)
Earnings and Adjusted EBITDA(1) (Non-GAAP) ($ in millions, except per share data) Net Earnings and Adjusted EBITDA/ (1) (1) EPS and Adjusted EPS (Non-GAAP) Adjusted EBITDA Margin (Non-GAAP) Quarters Quarters $0.28 $0.28 $4.5 $4.6 $0.23 $0.24 $3.0 $2.5 14.5% 14.0% Q3 22 Q3 23 Q3 22 Q3 23 Years Years
Slide 8: Capital Structure and Cash Flow
Capital Structure and Cash Flow ($ in millions) Year Capitalization Cash Flow Three Months Ended Ended 9/30/23 6/30/23 9/30/23 9/30/22 12/31/22 Net cash provided by Cash and cash equivalents $ 41.7 $ 37.4 $ 6.2 $ 1.4 $ (1.4) (used in) operating activities Total debt $ 13.1 $ 14.1 Capital expenditure
Slide 9: Orders and Backlog
Orders and Backlog(1) ($ in millions) Orders ➢ Q3 orders down 18% y/y, 15% sequentially Years Quarters $129.6 $120.4 ▪ Y/Y strength in orders from security and $101.9 $32.7 automotive/EV, partially offset lower demand from the semi and industrial markets $26.9 $59.7 ▪ Q/Q softer demand in the indust
Slide 10: Updating Outlook for 2023
Updating Outlook for 2023 ➢ Fourth Quarter Outlook(1) ▪ Revenue: $28 million to $30 million 5-Point Strategy ▪ Gross margin: ~45% ▪ Operating expenses: ~$11.7 million • Amortization (after tax) ~$430,000 ▪ Net interest income: similar to Q3 Global & Innovation & ▪ Effective tax rate: ~16% Market Dif
Slide 11: Executing to Plan
Executing to Plan ($ in millions) ~$200 to $250 0 25 0 t o2 Potential R 202 Future AG 0 %+C Acquisitions ~ 3 $125 - $127 $117 $85 $54 ∕∕ 2020 2021 2022 2023E 2025E Actual Revenue Estimated Revenue(1) (1) Estimated 2025 revenue, including estimated revenue from future potential acquisitions, is based
Slide 12: Driving Scale to Deliver Growth in Earnings
Driving Scale to Deliver Growth in Earnings ($ in millions) Division Operating Income(1) Adjusted EBITDA(2) Net Earnings ~ $40 + ~ $30+ ~ $20+ - $26 $19 $22 + $19 $16 $12 $12 $8 $7 22% 19% 20% ~20% 14% 14% 15% ~15% 9% 7% 9% ~10% TTM ∕∕ (3) TTM ∕∕ TTM ∕∕ 2021 2022 Q3 23 2025E 2021 2022 Q3 23 2025E (3
Slide 13: Execution on Track with Plan
Execution on Track with Plan Innovative technologies leveraging engineering expertise Diversified end markets with strong secular growth drivers Growing customer base, deepening customer reach and expanding geographically Financial flexibility to execute growth strategy Executing 5-Point Strategy an
Slide 14: Conference Call Playback Info and Upcoming Events
Conference Call Playback Info ➢ Replay Number: (412) 317-6671 passcode: 13741799 ➢ Telephone replay available through Friday, November 10, 2023 ➢ Webcast / Presentation / Replay available at www.intest.com/investor-relations ➢ Transcript, when available, at www.intest.com/investor-relations Upcoming
Slide 15: Supplemental Information
inTEST Corporation Third Quarter 2023 Financial Results Conference Call Supplemental Information November 3, 2023
Slide 16: Reconciliation of Net Earnings to Adjusted Net Earnings (Non-GAAP)
Reconciliation of Net Earnings to Adjusted Net Earnings (Non-GAAP) and Earnings Per Diluted Share to Adjusted Earnings Per Diluted Share (Non-GAAP) ($ in thousands, except per share amounts) Three Months Ended 9/30/2022 12/31/2022 3/31/2023 6/30/2023 9/30/2023 Net earnings $ 2,524 $ 3,244 $ 2,817 $
Slide 17: Reconciliation of Net Earnings to Adjusted Net Earnings (Non-GAAP)
Reconciliation of Net Earnings to Adjusted Net Earnings (Non-GAAP) and Earnings Per Diluted Share to Adjusted Earnings Per Diluted Share (Non-GAAP) ($ in thousands, except per share amounts) Years Ended 12/31/2020 12/31/2021 12/31/2022 TTM Q3 23 Net earnings $ (895) $ 7,283 $ 8,461 $ 11,820 Acquired
Slide 18: Reconciliation of Net Earnings to Adjusted EBITDA (Non-GAAP)
Reconciliation of Net Earnings and Net Margin to Adjusted EBITDA (Non-GAAP) and Adjusted EBITDA Margin (Non-GAAP) ($ in thousands) Three Months Ended 9/30/2022 12/31/2022 3/31/2023 6/30/2023 9/30/2023 Net earnings $ 2,524 $ 3,244 $ 2,817 $ 2,793 $ 2,966 Acquired intangible amortization 595 552 544 5
Slide 19: Reconciliation of Net Earnings to Adjusted EBITDA (Non-GAAP)
Reconciliation of Net Earnings and Net Margin to Adjusted EBITDA (Non-GAAP) and Adjusted EBITDA Margin (Non-GAAP) ($ in thousands) Years Ended December 31, 2020 2021 2022 TTM Q3 23 Net earnings (loss) $ (895) $ 7,283 $ 8,461 $ 11,820 Acquired intangible amortization 1,233 1,440 2,694 2,134 Net inter
Slide 20: Reconciliation of Estimated Earnings Per Diluted Share to Adjusted
Reconciliation of Third Quarter 2023 Estimated Earnings Per Diluted Share to Estimated Adjusted Earnings Per Diluted Share (Non-GAAP) Low High Estimated earnings per diluted share $ 0.08 $ 0.13 Estimated acquired intangible amortization 0.05 0.05 Estimated tax adjustments (0.01) (0.01) Estimated adj
Slide 21: Segment Reporting
Segment Reporting ($ in thousands) Quarter Ended Year Ended 9/30/2022 12/31/2022 3/31/2023 6/30/2023 9/30/2023 12/31/2021 12/31/2022 Electronic Test $ 10,408 $ 11,236 $ 10,371 $ 10,993 $ 11,547 $ 32,509 $ 40,219 Environmental Technologies 7,631 8,041 8,042 8,136 7,000 26,896 30,172 Process Technolog