Intest Corporation · AMEX:INTT
Intest — Southwest IDEAS Conference 2024
35 slides from Intest's conference presentation, Nov 20, 2024
Slide 1: inTEST Corporation – Southwest IDEAS Conference
inTEST Corporation Southwest IDEAS Conference Nick Grant Duncan Gilmour President and CEO Chief Financial Officer NYSE American: INTT November 20, 2024
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 Nick Grant Duncan Gilmour President and CEO Chief Financial Officer and Treasurer 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
Slide 4: Transforming inTEST
Transforming inTEST Transition from Components to Solutions Provider 1 Shift to Diversified Markets with Long-term, Secular Tailwinds 2 Increase SAM with Multi-Billion Market Opportunity with Outsized Growth 3 New Organizational Structure Unlocking Potential 4 Strategic Acquisitions to Reinforce Gro
Slide 5: 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 ➢ Q3 TTM 2024 Revenue: $122M ➢ Industrial ▪ 43.7% Americas ➢ Automotive/EV ▪ 27.0%
Slide 6: 5-Point Strategy Drives Long-Term Value
5-Point Strategy Drives Long-Term Value ✓ Growth Driven by Geographic Expansion, ✓ Drive Innovation and Increasing Customer Base, Technological Differentiation Global & Innovation & Market Broader & Deeper Market Expansion Differentiation Penetration Strategic Acquisitions & Service & Partnerships S
Slide 7: Acquired Alfamation in March 2024
Acquired Alfamation in March 2024 FY23 Sales by Industry Segment FY23 Customer Concentration • Headquarters: Milan, Italy 7% Others, 16% • Sales and service center in 3% 3% Suzhou City, China 3% 1% 3% 48% • ~130 employees 5% 89% • Founder owned business 5% • Staying on to execute growth 17% plans Au
Slide 8: Expands Electronic Test Capabilities
Expands Electronic Test Capabilities Consistent with 5-Point Strategy for Growth Cultural fit as an innovative engineering and technology solutions provider Strategic Fit: expands test capabilities and footprint in Europe + Deepens market reach in auto/EV, life sciences & consumer electronics Best-i
Slide 9: Driving Market Leadership/Opportunities
Driving Market Leadership/Opportunities Targeting markets with strong, secular tailwinds inTEST Revenue by Market* $84.9M $123.3M $122.0M Q3 TTM 2023 2021 2024 Semi Industrial Auto/EV Defense/Aero Life Sciences Security Other *Excludes any potential future acquisitions 9 **Sources: IC Insights, Veri
Slide 10: Electronic Test Division
Electronic Test Division Engineering solutions for the toughest challenges in automated test 42% ➢ Growth drivers: semi mixed-signal/analog focused, strength in auto/EV market and growing presence in defense and life sciences ➢ Markets: back-end semi, auto/EV, industrial, life sciences, defense/aero
Slide 11: Environmental Technologies Division
Environmental Technologies Division Controlling environmental conditions in test, process and storage applications ➢ Growth drivers: strong position in back-end semi, expanding in defense/aero, industrial and auto/EV ▪ Thermal testing/processing solutions that provide precise temperature controls fo
Slide 12: Process Technologies Division
Process Technologies Division Technical expertise and customized solutions for industrial applications 34% ➢ Growth drivers: ▪ Technologies serve large, diverse and growing markets: semi front-end, auto/EV, defense/aerospace, security, life sciences and other varied applications ▪ Induction heating
Slide 13: Making M&A a Core Competency
Making M&A a Core Competency Completed four acquisitions since implementing 5-Point Strategy M&A Eco-System Disciplined M&A Process Acquire quality businesses to drive shareholder value Expand into fast growing markets Offer broader portfolio of solutions Strategy M&A Development Execution Drive fur
Slide 14: Success Building Our Vision
Success Building Our Vision Innovative Test and Process Technology Solutions Acquisition Strategy: Scaling Divisions Electronic Test ▪ Broader and complementary technology/applications ▪ Diversify outside of Semi market ▪ Deepen geographic market reach in Europe, Asia, Latin America ▪ Expand custome
Slide 15: Financial Overview
Financial Overview 15
Slide 16: Orders and Backlog
Orders and Backlog(1) ($ in millions) ORDERS ➢ Q3 orders up 4.5% y/y Years Quarters ▪ Includes $3.9 million from Alfamation $129.6 $116.6 ▪ $4.1 million increase in auto/EV, more than $101.9 $104.6 $26.9 $26.2 $28.1 doubled driven by Alfamation ▪ More investments directed to ICE(2) autos ▪ Def/aero
Slide 17: Revenue
Revenue ($ in millions) Years Quarters ➢ Q3 2024 revenue, decreased $0.7 million y/y ▪ $5.4 million from Alfamation $123.3 $122.0 $34.0 ▪ Auto/EV up $4.5 million, primarily from Alfamation $116.8 $30.9 $30.3 ▪ $7.1 million decline in semi sales $84.9 ▪ Industrial market up $1.1 million and other mar
Slide 18: Gross Profit and Margin
Gross Profit and Margin ($ in millions) Years Quarters ➢ Q3 gross margin of 46.3% expanded 570 bps compared with Q2 2024 ▪ Margin expansion driven by favorable product mix and cost actions $57.0 $53.4 $53.3 $14.4 $13.8 $14.0 ▪ Improved volume in higher margin $41.2 back-end semi business ➢ Y/Y gross
Slide 19: Operating Expenses
Operating Expenses Continuing to invest to support 5-Point Strategy for Growth ($ in millions) Operating expenses as a % of sales ➢ Q3 2024 operating expenses up $1.5 million versus Q3 2023 38.3% 36.6% 37.7% 41.7% 38.7% 39.6% 44.7% ▪ $2.3 million incremental operating expenses Years Quarters attribu
Slide 20: Earnings and Adjusted EBITDA
Earnings and Adjusted EBITDA(1) ($ in millions, except per share data) Net Earnings and Adjusted EBITDA/ (1) (1) EPS and Adjusted EPS Adjusted EBITDA Margin Quarters Quarters $3.8 $0.22 $0.19 $2.4 $2.3 $2.2 $0.10 $0.08 $0.04 $0.5 $0.02 $0.2 12.2% 6.3% 8.1% Q3 23 Q2 24 Q3 24 Q3 23 Q2 24 Q3 24 Years Y
Slide 21: Capital Structure and Cash Flow
Capital Structure and Cash Flow ($ in millions) Year Capitalization Cash Flow Three Months Ended Ended 9/30/24 12/31/23 9/30/24 9/30/23 12/31/23 Net cash provided by Cash and cash equivalents $ 18.0 $ 45.3 $ 4.2 $ 6.2 $ 16.2 operating activities Total debt $ 16.1 $ 12.0 Capital expenditures (0.5) (0
Slide 22: Capital Allocation Priorities
Capital Allocation Priorities Disciplined Approach To Capital Allocation, Flex with Market Conditions Return Organic Reduce M&A of Growth Debt Capital ✓ Invest in engineering, sales & marketing ✓ Innovate with new products and capabilities ✓ Maintain financial flexibility: Total debt / TTM adjusted
Slide 23: Tightened Outlook for 2024
Tightened Outlook for 2024 Fourth Quarter Outlook(1) 5-Point Strategy Revenue: $34 million to $37 million Gross margin: ~42% Operating expenses: ~$13.5 million Intangible asset amortization expense: ~$0.9 million Global & Innovation & Amortization (after tax): ~$0.7 million Market Differentiation In
Slide 24: Executing on our Strategy
Executing on our Strategy Limited visibility but signs of stabilization in targeted industries • Seeing gradual improvement in back-end semi • Solid demand from defense/aerospace • Front-end semi currently paused, but exciting long-term opportunity with unique induction heating solution for SiC, GaN
Slide 25: inTEST Corporation
inTEST Corporation Southwest IDEAS Conference Nick Grant Duncan Gilmour President and CEO Chief Financial Officer November 20, 2024
Slide 26: Supplemental Information
inTEST Corporation Supplemental Information
Slide 27: Competition
Competition Solutions / Markets Competitors Manipulators Advantest Corporation, Esmo AG, Reid-Ashman Manufacturing and Teradyne, Inc. Docking Hardware Advantest Corporation, Esmo AG, Reid-Ashman Manufacturing and Teradyne, Inc. Tester Interfaces Advantest Corporation, Esmo AG, Reid-Ashman Manufactur
Slide 28: Reconciliation of Net Earnings to Adjusted Net Earnings and EPS
Reconciliation of Net Earnings to Adjusted Net Earnings (Non-GAAP) and Earnings Per Diluted Share to Adjusted Earnings Per Diluted Share (Non-GAAP) ($ in thousands, except per share amounts) Three Months Ended 9/30/2023 12/31/2023 3/31/2024 6/30/2024 9/30/2024 Net earnings $ 2,277 $ 1,455 $ 662 $ 23
Slide 29: Reconciliation of Net Earnings to Adjusted Net Earnings and EPS
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 December 31, TTM Q3 2021 2022 2023 2024 Net earnings $ 7,283 $ 8,461 $ 9,342 $ 2,842 Acquired int
Slide 30: Reconciliation to Adjusted EBITDA (Quarterly)
Reconciliation of Net Earnings and Net Margin to Adjusted EBITDA (Non-GAAP) and Adjusted EBITDA Margin (Non-GAAP) ($ in thousands) Three Months Ended 9/30/2023 12/31/2023 3/31/2024 6/30/2024 9/30/2024 Net earnings $ 2,277 $ 1,455 $ 662 $ 230 $ 495 Acquired intangible amortization 515 513 595 897 944
Slide 31: Reconciliation to Adjusted EBITDA (Annual)
Reconciliation of Net Earnings and Net Margin to Adjusted EBITDA (Non-GAAP) and Adjusted EBITDA Margin (Non-GAAP) ($ in thousands) Years Ended December 31, TTM Q3 2021 2022 2023 2024 Net earnings $ 7,283 $ 8,461 $ 9,342 $ 2,842 Acquired intangible amortization 1,440 2,694 2,095 2,949 Net interest ex
Slide 32: Reconciliation of Q4 2024 Estimated EPS to Adjusted EPS
Reconciliation of Fourth Quarter 2024 Estimated Earnings Per Diluted Share to Estimated Adjusted Earnings Per Diluted Share (Non-GAAP) Q4 2024E Estimated earnings per diluted share ~$ 0.08 Estimated acquired intangible amortization ~ 0.08 Estimated tax adjustments ~ (0.02) Estimated adjusted earning
Slide 33: Segment Reporting (Quarterly)
Segment Reporting (Quarterly) ($ in thousands) Three Months Ended 9/30/2023 12/31/2023 3/31/2024 6/30/2024 9/30/2024 Electronic Test $ 11,547 $ 8,105 $ 11,116 $ 16,159 $ 15,481 Environmental Technologies 7,000 7,623 6,828 8,273 6,734 Process Technologies 12,394 12,156 11,880 9,559 8,057 Total Revenu
Slide 34: Segment Reporting (12-Months)
Segment Reporting (12-Months) ($ in thousands) Years Ended TTM 12/31/2022 12/31/2023 9/30/2024 Electronic Test $ 40,219 $ 41,016 $ 50,861 Environmental Technologies 30,172 30,801 29,458 Process Technologies 46,437 51,485 41,652 Total Revenue $ 116,828 $ 123,302 $ 121,971 % of % of % of divisional di
Slide 35: inTEST Corporation Investor Relations Contact
inTEST Corporation Southwest IDEAS Conference Investor Relations Contact: Deborah K. Pawlowski, Alliance Advisors IR 716-843-3908 dpawlowski@allianceadvisors.com NYSE American: INTT