intt20230331

intt20230331_10q.htm

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2023 or

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 1-36117

inTEST Corporation
(Exact Name of Registrant as Specified in its Charter)

Delaware
(State or other jurisdiction of incorporation or organization)

22-2370659
(I.R.S. Employer Identification Number)

804 East Gate Drive, Suite 200
Mt. Laurel, New Jersey 08054
(Address of principal executive offices, including zip code)

(856) 505-8800
(Registrant's Telephone Number, including Area Code)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class
Common Stock, par value $0.01 per share

Trading Symbol

INTT

Name of Each Exchange on Which Registered
NYSE American

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer" "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐	Accelerated filer ☐
Non-accelerated filer ☒	Smaller reporting company ☒
Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes ☐ No ☒

Number of shares of Common Stock, $0.01 par value, outstanding as of the close of business on May 1, 2023: 11,131,366

inTEST CORPORATION

TABLE OF CONTENTS

		Page
PART I.	FINANCIAL INFORMATION

*Item 1.*	*Financial Statements*

	Consolidated Balance Sheets as of March 31, 2023 (Unaudited) and December 31, 2022	1
	Unaudited Consolidated Statements of Operations for the three months ended March 31, 2023 and 2022	2
	Unaudited Consolidated Statements of Comprehensive Earnings for the three months ended March 31, 2023 and 2022	3
	Unaudited Consolidated Statements of Stockholders' Equity for the three months ended March 31, 2023 and 2022	4
	Unaudited Consolidated Statements of Cash Flows for the three months ended March 31, 2023 and 2022	5
	Notes to Consolidated Financial Statements	6

*Item 2.*	*Management's Discussion and Analysis of Financial Condition and Results of Operations*	22

*Item 3.*	*Quantitative and Qualitative Disclosures About Market Risk*	29

*Item 4.*	*Controls and Procedures*	29

PART II.	OTHER INFORMATION

*Item 1.*	*Legal Proceedings*	29

*Item 1A.*	*Risk Factors*	29

*Item 2.*	*Unregistered Sales of Equity Securities and Use of Proceeds*	30

*Item 3.*	*Defaults Upon Senior Securities*	30

*Item 4.*	*Mine Safety Disclosures*	30

*Item 5.*	*Other Information*	30

*Item 6.*	*Exhibits*	30

*SIGNATURES*		31

PART I. FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS

inTEST CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)

	March 31,			December 31,
	2023			2022
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	15,428		$	13,434
Restricted cash		516			1,142
Trade accounts receivable, net of allowance for credit losses of $497 and $496, respectively		20,991			21,215
Inventories		24,489			22,565
Prepaid expenses and other current assets		2,445			1,695
Total current assets		63,869			60,051
Property and equipment:
Machinery and equipment		6,742			6,625
Leasehold improvements		3,424			3,242
Gross property and equipment		10,166			9,867
Less: accumulated depreciation		(6,959	)		(6,735	)
Net property and equipment		3,207			3,132
Right-of-use assets, net		5,506			5,770
Goodwill		21,636			21,605
Intangible assets, net		18,046			18,559
Deferred tax assets		684			280
Restricted certificates of deposit		100			100
Other assets		468			569
Total assets	$	113,516		$	110,066

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of Term Note	$	4,100		$	4,100
Current portion of operating lease liabilities		1,714			1,645
Accounts payable		7,801			7,394
Accrued wages and benefits		3,257			3,907
Accrued professional fees		743			884
Customer deposits and deferred revenue		5,448			4,498
Accrued sales commissions		1,249			1,468
Domestic and foreign income taxes payable		2,273			1,409
Other current liabilities		1,611			1,564
Total current liabilities		28,196			26,869
Operating lease liabilities, net of current portion		4,338			4,705
Term Note, net of current portion		11,017			12,042
Contingent consideration		1,042			1,039
Other liabilities		425			455
Total liabilities		45,018			45,110
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; 11,168,080 and 11,063,271 shares issued, respectively		112			111
Additional paid-in capital		32,673			31,987
Retained earnings		35,671			32,854
Accumulated other comprehensive earnings		289			218
Treasury stock, at cost; 36,329 and 34,308 shares, respectively		(247	)		(214	)
Total stockholders' equity		68,498			64,956
Total liabilities and stockholders' equity	$	113,516		$	110,066

See accompanying Notes to Consolidated Financial Statements.

-1-

inTEST CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share data)

(Unaudited)

	Three Months Ended March 31,
	2023			2022

Revenue	$	31,919		$	24,081
Cost of revenue		16,867			13,068
Gross profit		15,052			11,013

Operating expenses:
Selling expense		4,455			3,456
Engineering and product development expense		1,904			1,924
General and administrative expense		5,175			4,831
Total operating expenses		11,534			10,211

Operating income		3,518			802
Interest expense		(182	)		(137	)
Other income (expense)		58			(10	)

Earnings before income tax expense		3,394			655
Income tax expense		577			78

Net earnings	$	2,817		$	577

Earnings per common share – basic	$	0.26		$	0.05

Weighted average common shares outstanding – basic		10,755,729			10,617,271

Earnings per common share – diluted	$	0.25		$	0.05

Weighted average common shares and common share equivalents outstanding – diluted		11,088,664			10,842,592

See accompanying Notes to Consolidated Financial Statements.

-2-

inTEST CORPORATION
CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS
(In thousands)

(Unaudited)

	Three Months Ended March 31,
	2023			2022

Net earnings	$	2,817		$	577

Unrealized gain (loss) on interest rate swap agreement		(99	)		289
Foreign currency translation adjustments		170			(116	)

Comprehensive earnings	$	2,888		$	750

See accompanying Notes to Consolidated Financial Statements

-3-

inTEST CORPORATION
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(In thousands, except share data)

(Unaudited)

	Three Months Ended March 31, 2023

											*Accumulated*
						*Additional*					*Other*					*Total*
	*Common Stock*					*Paid-in*			*Retained*		*Comprehensive*		*Treasury*			*Stockholders'*
	*Shares*			*Amount*		*Capital*			*Earnings*		*Earnings*		*Stock*			*Equity*

Balance, January 1, 2023		11,063,271		$	111	$	31,987		$	32,854	$	218	$	(214	)	$	64,956

Net earnings		-			-		-			2,817		-		-			2,817
Other comprehensive earnings		-			-		-			-		71		-			71
Amortization of deferred compensation related to stock-based awards		-			-		474			-		-		-			474
Issuance of unvested shares of restricted stock		90,588			1		(1	)		-		-		-			-
Forfeiture of unvested shares of restricted stock		(13,271	)		-		-			-		-		-			-
Stock options exercised		25,200			-		165			-		-		-			165
Shares issued under Employee Stock Purchase Plan		2,292			-		48			-		-		-			48
Shares surrendered to satisfy tax liability at vesting of stock-based awards		-			-		-			-		-		(33	)		(33	)

Balance, March 31, 2023		11,168,080		$	112	$	32,673		$	35,671	$	289	$	(247	)	$	68,498

	Three Months Ended March 31, 2022

									*Accumulated*
					*Additional*				*Other*					*Total*
	*Common Stock*				*Paid-in*		*Retained*		*Comprehensive*		*Treasury*			*Stockholders'*
	*Shares*		*Amount*		*Capital*		*Earnings*		*Earnings*		*Stock*			*Equity*

Balance, January 1, 2022		10,910,460	$	109	$	29,931	$	24,393	$	594	$	(204	)	$	54,823

Net earnings		-		-		-		577		-		-			577
Other comprehensive earnings		-		-		-		-

SEC Form 10-Q filed by inTest Corporation