inTEST Reports Record Revenue of $30.8 Million and 16%

inTEST Reports Record Revenue of $30.8 Million and 16% Year-over-Year Growth in Net Income for Third Quarter 2022

Fourth quarter operating expenses are expected to run at approximately $10.7 million to $10.9 million. This estimated level of quarterly expense includes intangible asset amortization, which is expected to be approximately $560,000 pre-tax, or approximately $465,000 after tax. Interest expense is expected to be approximately $190,000 for the quarter and the effective tax rate is expected to be approximately 16% to 17% for the year.

Fourth quarter 2022 EPS (GAAP) is expected to be in the range of $0.20 to $0.25 while adjusted EPS (Non-GAAP) is expected to be in the range of $0.25 to $0.30.

The foregoing guidance is based on management’s current views with respect to operating and market conditions and customers’ forecasts. It also assumes macroeconomic conditions remain unchanged through the end of the year. Actual results may differ materially from what is provided here today as a result of, among other things, the factors described under “Forward-Looking Statements” below. Further information about non-GAAP measures can be found under “Non-GAAP Financial Measures” and the reconciliations of GAAP financial measures to non-GAAP financial measures that accompany this press release.

Conference Call and Webcast

The Company will host a conference call and webcast today at 8:30 a.m. ET. During the conference call, management will review the financial and operating results and discuss inTEST’s corporate strategy and outlook. A question-and-answer session will follow. To listen to the live call, dial (412) 317-6026. In addition, the webcast and slide presentation may be found at https://ir.intest.com.

A telephonic replay will be available from 11:30 a.m. ET on the day of the call through Friday, November 11, 2022. To listen to the archived call, dial (412) 317-6671 and enter replay pin number 10171527 or access the webcast replay via the Company’s website. A transcript will also be posted to the website once available.

About inTEST Corporation

inTEST Corporation is a global supplier of innovative test and process solutions for use in manufacturing and testing in key target markets which include automotive, defense/aerospace, industrial, life sciences, and security, as well as both the front-end and back-end of the semiconductor manufacturing industry. Backed by decades of engineering expertise and a culture of operational excellence, inTEST solves difficult thermal, mechanical, and electronic challenges for customers worldwide while generating strong cash flow and profits. inTEST’s strategy leverages these strengths to grow organically and with acquisitions through the addition of innovative technologies, deeper and broader geographic reach, and market expansion. For more information, visit www.intest.com.

Non-GAAP Financial Measures

In addition to disclosing results that are determined in accordance with GAAP, we also disclose non-GAAP financial measures. These non-GAAP financial measures consist of organic revenue, adjusted net earnings (loss), adjusted earnings (loss) per diluted share, adjusted EBITDA, and adjusted EBITDA margin. Organic revenue is derived by excluding revenue generated by acquired businesses in the first twelve months of ownership from total revenue. Adjusted net earnings (loss) is derived by adding acquired intangible amortization, adjusted for the related income tax expense (benefit), to net earnings (loss). Adjusted earnings (loss) per diluted share is derived by dividing adjusted net earnings (loss) by diluted weighted average shares outstanding. Adjusted EBITDA is derived by adding acquired intangible amortization, interest expense, income tax expense, depreciation, and stock-based compensation expense to net earnings (loss). Adjusted EBITDA margin is derived by dividing adjusted EBITDA by revenue. These results are provided as a complement to the results provided in accordance with GAAP. Organic revenue is a non-GAAP financial measure presented to provide investors the understanding of the performance of the core business excluding the contributions of acquisitions in the first twelve months of ownership. Adjusted net earnings (loss) and adjusted earnings (loss) per diluted share are non-GAAP financial measures presented to provide investors with meaningful, supplemental information regarding our baseline performance before acquired intangible amortization charges as this expense may not be indicative of our underlying operating performance. Adjusted EBITDA and adjusted EBITDA margin are non-GAAP financial measures presented primarily as a measure of liquidity as they exclude non-cash charges for acquired intangible amortization, depreciation and stock-based compensation. In addition, adjusted EBITDA and adjusted EBITDA margin also exclude the impact of interest income or expense and income tax expense or benefit, as these expenses may not be indicative of our underlying operating performance. The non-GAAP financial measures presented in this press release are used by management to make operational decisions, to forecast future operational results, and for comparison with our business plan, historical operating results and the operating results of our peers. Reconciliations from revenue to organic revenue, net earnings (loss) and earnings (loss) per diluted share to adjusted net earnings (loss) and adjusted earnings (loss) per diluted share and from net earnings (loss) to adjusted EBITDA and adjusted EBITDA margin, are contained in the tables below. The non-GAAP financial measures discussed in this press release may not be comparable to similarly titled measures used by other companies. The presentation of non-GAAP financial measures is not meant to be considered in isolation, as a substitute for, or superior to, financial measures or information provided in accordance with GAAP.

Forward-Looking Statements

This press release 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, such as statements of the Company’s plans, strategies and intentions, or our future performance or goals, that are based upon management's current expectations. These forward-looking statements can often be identified by the use of forward-looking terminology such as “believes,” “expects,” “intends,” “may,” “will,” “should,” “plans,” “projects,” “forecasts,” “outlook,” “anticipates,” “targets,” “estimates,” or similar terminology. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements.

Such risks and uncertainties include, but are not limited to, any mentioned in this press release as well as the Company’s ability to execute on its 5-Point Strategy, realize the potential benefits of acquisitions and successfully integrate any acquired operations, grow the Company’s presence in its key target and international markets, manage supply chain challenges, convert backlog to sales and to ship product in a timely manner; the success of the Company’s strategy to diversify its markets; the impact of inflation on the Company’s business and financial condition; the impact of the COVID-19 pandemic on the Company’s business, liquidity, financial condition and results of operations; indications of a change in the market cycles in the semi market or other markets served; changes in business conditions and general economic conditions both domestically and globally including rising interest rates and fluctuation in foreign currency exchange rates; changes in the demand for semiconductors; access to capital and the ability to borrow funds or raise capital to finance potential acquisitions or for working capital; changes in the rates and timing of capital expenditures by the Company’s customers; and other risk factors set forth from time to time in the Company’s Securities and Exchange Commission filings, including, but not limited to, the Annual Report on Form 10-K for the year ended December 31, 2021. Any forward-looking statement made by the Company in this press release is based only on information currently available to management and speaks to circumstances only as of the date on which it is made. The Company undertakes no obligation to update the information in this press release to reflect events or circumstances after the date hereof or to reflect the occurrence of anticipated or unanticipated events.

– FINANCIAL TABLES FOLLOW –

inTEST CORPORATION Consolidated Statements of Operations *(In thousands, except share and per share data)* (Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2022			2021			2022			2021

Revenue	$	30,771		$	21,144		$	84,423		$	62,520
Cost of revenue		16,873			10,749			45,964			31,642
Gross profit		13,898			10,395			38,459			30,878

Operating expenses:
Selling expense		4,009			2,841			11,498			7,849
Engineering and product development expense		1,866			1,334			5,649			4,012
General and administrative expense		4,864			3,620			14,623			10,550
Restructuring and other charges		-			51			-			303
Total operating expenses		10,739			7,846			31,770			22,714

Operating income		3,159			2,549			6,689			8,164
Other income (expense)		(120	)		(17	)		(425	)		2

Earnings before income tax expense		3,039			2,532			6,264			8,166
Income tax expense		515			357			1,047			1,170

Net earnings	$	2,524		$	2,175		$	5,217		$	6,996

Earnings per common share - basic	$	0.24		$	0.21		$	0.49		$	0.67

Weighted average common shares outstanding - basic		10,695,867			10,496,188			10,655,469			10,422,851

Earnings per common share - diluted	$	0.23		$	0.20		$	0.48		$	0.65

Weighted average common shares and common share equivalents outstanding - diluted		10,864,540			10,792,290			10,840,644			10,694,351

inTEST CORPORATION Consolidated Balance Sheets *(In thousands)*

	September 30,			December 31,
	2022			2021
ASSETS	(Unaudited)
Current assets:
Cash and cash equivalents	$	8,901		$	21,195
Restricted cash		1,137			-
Short term investments		3,494			-
Trade accounts receivable, net of allowance for doubtful accounts of $209 and $213, respectively		21,134			16,536
Inventories		21,092			12,863
Prepaid expenses and other current assets		1,871			1,483
Total current assets		57,629			52,077
Property and equipment:
Machinery and equipment		6,334			5,733
Leasehold improvements		3,217			3,001
Gross property and equipment		9,551			8,734
Less: accumulated depreciation		(6,482	)		(6,046	)
Net property and equipment		3,069			2,688
Right-of-use assets, net		5,017			5,919
Goodwill		21,394			21,448
Intangible assets, net		18,894			21,634
Restricted certificates of deposit		100			100
Other assets		598			39
Total assets	$	106,701		$	103,905

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of Term Note	$	4,100		$	4,100
Current portion of operating lease liabilities		1,430			1,371
Accounts payable		8,183			4,281
Accrued wages and benefits		3,537			4,080
Accrued professional fees		886			1,048
Customer deposits and deferred revenue		5,077			6,038
Accrued sales commissions		1,164			863
Domestic and foreign income taxes payable		1,335			2,024
Other current liabilities		1,386			1,267
Total current liabilities		27,098			25,072
Operating lease liabilities, net of current portion		4,196			5,248
Term Note, net of current portion		13,067			16,000
Deferred tax liabilities		217			1,379
Contingent consideration		1,238			930
Other liabilities		464			453
Total liabilities		46,280			49,082
Commitments and Contingencies
Stockholders' equity:
Preferred stock, $0.01 par value; 5,000,000 shares authorized; no shares issued or outstanding		-			-
Common stock, $0.01 par value; 20,000,000 shares authorized; 11,057,858 and 10,910,460 shares issued, respectively		111			109
Additional paid-in capital		31,516			29,931
Retained earnings		29,610			24,393
Accumulated other comprehensive earnings (loss)		(602	)		594
Treasury stock, at cost; 34,308 and 33,077 shares, respectively		(214	)		(204	)
Total stockholders' equity		60,421			54,823
Total liabilities and stockholders' equity	$	106,701		$	103,905

inTEST CORPORATION Consolidated Statements of Cash Flows *(In thousands)* (Unaudited)

	Nine Months Ended September 30,
	2022			2021
CASH FLOWS FROM OPERATING ACTIVITIES
Net earnings	$	5,217		$	6,996
Adjustments to reconcile net earnings to net cash provided by (used in) operating activities:
Depreciation and amortization		3,674			2,166
Provision for excess and obsolete inventory		307			154
Foreign exchange loss		107			36
Amortization of deferred compensation related to stock-based awards		1,373			1,094
Discount on shares sold under Employee Stock Purchase Plan		28			-
Loss on disposal of property and equipment		45			20
Deferred income tax benefit		(1,162	)		(221)
Changes in assets and liabilities:
Trade accounts receivable		(4,900	)		(3,874)
Inventories		(8,549	)		(2,051)
Prepaid expenses and other current assets		(907	)		(26)
Restricted certificates of deposit		-			40
Other assets		(1	)		(10)
Operating lease liabilities		(1,064	)		(918)
Accounts payable		3,947			1,425
Accrued wages and benefits		(527	)		942
Accrued professional fees		(153	)		52
Customer deposits and deferred revenue		(827	)		1,697
Accrued sales commissions		310			366
Domestic and foreign income taxes payable		(672	)		302
Other current liabilities		35			(60)
Other liabilities		61			(7)
Net cash provided by (used in) operating activities		(3,658	)		8,123

CASH FLOWS FROM INVESTING ACTIVITIES
Refund of final working capital adjustment related to Acculogic		371			-
Purchase of property and equipment		(1,043	)		(577)
Purchase of short-term investments		(3,494	)		-
Net cash used in investing activities		(4,166	)		(577)

CASH FLOWS FROM FINANCING ACTIVITIES
Repayments of Term Note		(2,933	)		-
Proceeds from stock options exercised		38			1,019
Proceeds from shares sold under Employee Stock Purchase Plan		148			-
Shares redeemed into treasury stock		(10	)		-
Net cash provided by (used in) financing activities		(2,757	)		1,019

Effects of exchange rates on cash		(576	)		(99)

Net cash provided by (used in) all activities		(11,157	)		8,466
Cash, cash equivalents and restricted cash at beginning of period		21,195			10,277
Cash, cash equivalents and restricted cash at end of period	$	10,038		$	18,743

Cash payments for:
Domestic and foreign income taxes	$	2,926		$	1,053

inTEST CORPORATION Revenue by Market *(In thousands)* (Unaudited)

($ in 000s)	Three Months Ended
									Change										Change
	9/30/2022				6/30/2022				$			%		9/30/2021				$			%
Revenue
Semi	$	19,170	62.3	%	$	16,409	55.5	%	$	2,761		16.8	%	$	13,656	64.6	%	$	5,514		40.4	%
Industrial		2,130	6.9	%		2,930	9.9	%		(800	)	-27.3	%		2,191	10.4	%		(61	)	-2.8	%
Auto/EV		1,621	5.3	%		3,594	12.2	%		(1,973	)	-54.9	%		1,339	6.3	%		282		21.1	%
Life Sciences		1,715	5.6	%		1,169	3.9	%		546		46.7	%		715	3.4	%		1,000		139.9	%
Defense/Aerospace		1,914	6.2	%		1,423	4.8	%		491		34.5	%		947	4.5	%		967		102.1	%
Security		871	2.8	%		794	2.7	%		77		9.7	%		6	0.0	%		865		NM
Other		3,350	10.9	%		3,252	11.0	%		98		3.0	%		2,290	10.8	%		1,060		46.3	%
	$	30,771	100.0	%	$	29,571	100.0	%	$	1,200		4.1	%	$	21,144	100.00	%	$	9,627		45.5	%
NM: not meaningful

Orders by Market *(In thousands)* (Unaudited)

($ in 000s)	Three Months Ended
									Change									Change
	9/30/2022				6/30/2022				$			%		9/30/2021				$			%
Orders
Semi	$	19,181	58.7	%	$	26,732	66.0	%	$	(7,551	)	-28.2	%	$	13.365	63.2	%	$	5,816		43.5	%
Industrial		2,309	7.1	%		2,366	5.8	%		(57	)	-2.4	%		2,329	11.0	%		(20	)	-0.9	%
Auto/EV		2,870	8.8	%		2,750	6.8	%		120		4.4	%		2,161	10.2	%		709		32.8	%
Life Sciences		927	2.8	%		1,535	3.8	%		(608	)	-39.6	%		195	0.9	%		732		375.4	%
Defense/Aerospace		3,149	9.6	%		1,897	4.7	%		1,252		66.0	%		1,174	5.6	%		1,975		168.2	%
Security		1,072	3.3	%		989	2.4	%		83		8.4	%		71	0.3	%		1,001		NM
Other		3,172	9.7	%		4,249	10.5	%		(1,077	)	-25.3	%		1,853	8.8	%		1,319		71.2	%
	$	32,680	100.0	%	$	40,518	100.0	%	$	(7,838	)	-19.3	%	$	21,148	100.0	%	$	11,532		54.5	%
NM: not meaningful

inTEST CORPORATION

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