Core Viewpoint - Momentum investing focuses on "buying high and selling higher" rather than traditional strategies of "buying low and selling high" [1] Group 1: Momentum Investing Strategy - Momentum investors often face challenges in determining the right entry point, as stocks may lose momentum when their valuations exceed future growth potential [2] - A safer approach involves investing in bargain stocks that exhibit recent price momentum, utilizing tools like the Zacks Momentum Style Score to identify such opportunities [3] Group 2: inTest Corporation (INTT) Analysis - inTest Corporation (INTT) has shown a four-week price change of 0.4%, indicating growing investor interest [4] - The stock has gained 17.4% over the past 12 weeks, with a beta of 1.55, suggesting it moves 55% more than the market [5] - INTT has a Momentum Score of A, indicating a favorable time to invest based on momentum [6] Group 3: Earnings Estimates and Valuation - INTT has received a Zacks Rank 2 (Buy) due to upward revisions in earnings estimates, which typically attract more investors [7] - The stock is trading at a Price-to-Sales ratio of 0.73, suggesting it is undervalued at 73 cents for each dollar of sales [7] Group 4: Additional Investment Opportunities - Besides INTT, there are other stocks that meet the criteria of the 'Fast-Paced Momentum at a Bargain' screen, presenting further investment opportunities [8] - Investors can explore over 45 Zacks Premium Screens tailored to different investing styles to identify potential winning stocks [9]

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents InTest Corporation's unaudited consolidated financial statements, including balance sheets, statements of operations, and cash flows, along with detailed notes on accounting policies and disclosures [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) Consolidated Balance Sheet Highlights (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :--------------------------------- | :------------ | :------------------ | | Cash and cash equivalents | $19,248 | $19,830 | | Trade accounts receivable, net | $23,349 | $29,495 | | Inventories | $27,610 | $26,837 | | Total current assets | $74,847 | $78,812 | | Total assets | $149,653 | $152,288 | | Total current liabilities | $30,958 | $31,948 | | Total liabilities | $47,061 | $52,498 | | Total stockholders' equity | $102,592 | $99,790 | [Unaudited Consolidated Statements of Operations](index=4&type=section&id=Unaudited%20Consolidated%20Statements%20of%20Operations) Consolidated Statements of Operations Highlights (in thousands, except per share data) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenue | $28,130 | $33,991 | $54,767 | $63,815 | | Gross profit | $11,973 | $13,797 | $23,029 | $26,873 | | Operating (loss) income | $(927) | $336 | $(3,808) | $828 | | Net (loss) earnings | $(503) | $230 | $(2,832) | $892 | | Basic (loss) earnings per share | $(0.04) | $0.02 | $(0.23) | $0.07 | | Diluted (loss) earnings per share | $(0.04) | $0.02 | $(0.23) | $0.07 | - Revenue for the three months ended June 30, 2025, decreased by **17.2%** year-over-year, and for the six months ended June 30, 2025, decreased by **14.2%** year-over-year[12](index=12&type=chunk) - The company reported a net loss of **$(503) thousand** for the three months and **$(2,832) thousand** for the six months ended June 30, 2025, compared to net earnings in the prior year periods[12](index=12&type=chunk) [Unaudited Consolidated Statements of Comprehensive Earnings (Loss)](index=5&type=section&id=Unaudited%20Consolidated%20Statements%20of%20Comprehensive%20Earnings%20(Loss)) Consolidated Statements of Comprehensive Earnings (Loss) Highlights (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net (loss) earnings | $(503) | $230 | $(2,832) | $892 | | Foreign currency translation adjustments | $3,266 | $(697) | $4,763 | $(786) | | Total other comprehensive earnings (loss) | $3,242 | $(741) | $4,704 | $(844) | | Comprehensive earnings (loss) | $2,739 | $(511) | $1,872 | $48 | [Unaudited Consolidated Statements of Stockholders' Equity](index=6&type=section&id=Unaudited%20Consolidated%20Statements%20of%20Stockholders'%20Equity) Stockholders' Equity Changes (in thousands, except share data) | Metric | Balance, January 1, 2025 | Net Loss | Other Comprehensive Earnings | Amortization of Deferred Compensation | Issuance of Unvested Shares | Forfeiture of Unvested Shares | Stock Options Exercised | ESPP Shares Issued | Shares Surrendered for Tax | Balance, June 30, 2025 | | :--------------------------------- | :----------------------- | :------- | :--------------------------- | :------------------------------------ | :-------------------------- | :---------------------------- | :---------------------- | :----------------- | :------------------------- | :--------------------- | | Common Stock (Shares) | 12,457,658 | — | — | — | 134,196 | (27,365) | 4,925 | 5,374 | — | 12,559,753 | | Common Stock (Amount) | $124 | — | — | — | $1 | — | — | — | — | $125 | | Additional Paid-in Capital | $57,658 | — | — | $858 | $(1) | — | $18 | $71 | — | $58,604 | | Retained Earnings | $45,087 | $(2,832) | — | — | — | — | — | — | — | $42,255 | | Accumulated Other Comprehensive Earnings (Loss) | $(2,137) | — | $4,704 | — | — | — | — | — | — | $2,567 | | Treasury Stock (Shares) | 79,382 | — | — | — | — | — | — | — | 2,695 | 82,077 | | Treasury Stock (Amount) | $(942) | — | — | — | — | — | — | — | $(17) | $(959) | | Total Stockholders' Equity | $99,790 | $(2,832) | $4,704 | $858 | — | — | $18 | $71 | $(17) | $102,592 | [Unaudited Consolidated Statements of Cash Flows](index=8&type=section&id=Unaudited%20Consolidated%20Statements%20of%20Cash%20Flows) Consolidated Statements of Cash Flows Highlights (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------- | :----------------------------- | :----------------------------- | | Net cash provided by (used in) operating activities | $4,847 | $(3,015) | | Net cash used in investing activities | $(691) | $(19,383) | | Net cash used in financing activities | $(5,602) | $(1,850) | | Effects of exchange rates on cash | $864 | $(642) | | Net cash used in all activities | $(582) | $(24,890) | | Cash and cash equivalents at end of period | $19,248 | $20,370 | - Net cash provided by operating activities significantly improved to **$4.8 million** in 2025 from a usage of **$(3.0) million** in 2024[21](index=21&type=chunk) - Net cash used in investing activities decreased substantially due to the absence of a major acquisition in 2025, compared to the Alfamation™ acquisition in 2024[21](index=21&type=chunk) [Notes to Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) [(1) NATURE OF OPERATIONS](index=9&type=section&id=(1)%20NATURE%20OF%20OPERATIONS) InTest Corporation is a global supplier of innovative test and process technology solutions across diverse markets, operating through three segments with a strategy to diversify and reduce dependence on the cyclical semiconductor market - InTest Corporation is a global supplier of innovative test and process technology solutions for manufacturing and testing across diverse markets[23](index=23&type=chunk) - The company operates through three reportable segments: Electronic Test, Environmental Technologies, and Process Technologies[23](index=23&type=chunk) - A key strategy is to diversify markets, product offerings, and customer base to reduce dependence on the volatile semiconductor market[26](index=26&type=chunk) [(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES](index=11&type=section&id=(2)%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This section details the company's significant accounting policies, including business combinations, asset valuation, revenue recognition, and stock-based compensation, noting no material impact from ASU 2023-07 and ongoing evaluation for other ASUs - Financial statements are prepared in conformity with U.S. GAAP, requiring management estimates and assumptions for various accounts[30](index=30&type=chunk) - Goodwill and intangible assets are accounted for under ASC Topic 350, with goodwill assessed for impairment annually and finite-lived intangibles amortized over their estimated useful lives[44](index=44&type=chunk)[45](index=45&type=chunk) - Revenue is recognized when performance obligations are satisfied and control of products or services is transferred to the customer[64](index=64&type=chunk) - The adoption of ASU 2023-07 (Segment Reporting) had no impact on consolidated financial statements, while ASU 2024-03 (Expense Disaggregation) and ASU 2023-09 (Income Tax Disclosures) are being evaluated for footnote disclosure impacts[90](index=90&type=chunk)[91](index=91&type=chunk)[93](index=93&type=chunk) [(3) ACQUISITION](index=24&type=section&id=(3)%20ACQUISITION) On March 12, 2024, InTest acquired Alfamation S.p.A. for approximately **$21.9 million**, aiming to expand its presence in auto/EV, life sciences, and consumer electronics, resulting in **$9.883 million** in goodwill and **$13.332 million** in identifiable intangible assets - Acquired Alfamation S.p.A. on March 12, 2024, a global provider of test and measurement solutions for auto/EV, life sciences, and specialty consumer electronics markets[96](index=96&type=chunk) - The aggregate purchase price was approximately **€20.0 million ($21.9 million)**, consisting of **$19.7 million** in cash and **187,432 shares** of common stock valued at **$2.1 million**[98](index=98&type=chunk) Alfamation™ Purchase Price Allocation (in thousands) | Asset/Liability | Amount | | :--------------------------------- | :----- | | Goodwill | $9,883 | | Identifiable intangible assets | $13,332 | | Tangible assets acquired and liabilities assumed | $(1,314) | | Total purchase price | $21,901 | - The acquisition is expected to deepen InTest's presence in auto/EV and life sciences, expand exposure in consumer electronics, and extend geographic reach in Europe[96](index=96&type=chunk) [(4) INVENTORIES](index=28&type=section&id=(4)%20INVENTORIES) Total inventories increased slightly to **$27.6 million** at June 30, 2025, from **$26.8 million** at December 31, 2024, primarily due to raw materials, with consistent excess and obsolete inventory charges year-over-year Inventories (in thousands) | Category | June 30, 2025 | December 31, 2024 | | :--------------------------------- | :------------ | :------------------ | | Raw materials | $16,932 | $16,109 | | Work in process | $5,108 | $5,940 | | Finished goods | $5,314 | $4,500 | | Total inventories | $27,610 | $26,837 | Excess and Obsolete Inventory Charges (in thousands) | Period | 2025 | 2024 | | :--------------------------------- | :--- | :--- | | Three Months Ended June 30 | $97 | $130 | | Six Months Ended June 30 | $304 | $306 | [(5) PROPERTY AND EQUIPMENT](index=28&type=section&id=(5)%20PROPERTY%20AND%20EQUIPMENT) Net property and equipment increased to **$4.7 million** at June 30, 2025, from **$4.5 million** at December 31, 2024, with depreciation expense consistent at **$0.6 million** for the six months ended June 30, 2025 Property and Equipment (in thousands) | Category | June 30, 2025 | December 31, 2024 | | :--------------------------------- | :------------ | :------------------ | | Machinery and equipment | $9,688 | $9,162 | | Leasehold improvements | $4,502 | $4,125 | | Gross property and equipment | $14,190 | $13,287 | | Less: accumulated depreciation | $(9,513) | $(8,830) | | Net property and equipment | $4,677 | $4,457 | Depreciation Expense (in thousands) | Period | 2025 | 2024 | | :--------------------------------- | :--- | :--- | | Three Months Ended June 30 | $314 | $356 | | Six Months Ended June 30 | $630 | $629 | [(6) GOODWILL AND INTANGIBLE ASSETS](index=28&type=section&id=(6)%20GOODWILL%20AND%20INTANGIBLE%20ASSETS) Goodwill increased to **$32.4 million** at June 30, 2025, primarily due to foreign currency translation, with total intangible assets, net, rising to **$26.6 million**, and expected amortization expense of **$1.7 million** for the remainder of 2025 and **$2.6 million** in 2026 Goodwill Carrying Value (in thousands) | Metric | Amount | | :--------------------------------- | :----- | | Balance - January 1, 2025 | $30,744 | | Impact of foreign currency translation adjustments | $1,693 | | Balance – June 30, 2025 | $32,437 | Intangible Assets, Net (in thousands) | Category | June 30, 2025 | December 31, 2024 | | :--------------------------------- | :------------ | :------------------ | | Finite-lived intangible assets | $16,128 | $16,201 | | Indefinite-lived intangible assets | $10,519 | $10,175 | | Total intangible assets | $26,647 | $26,376 | Estimated Annual Amortization Expense for Finite-Lived Intangible Assets (in thousands) | Year | Amount | | :--------------------------------- | :----- | | Remaining 2025 | $1,699 | | 2026 | $2,608 | | 2027 | $2,057 | [(7) FAIR VALUE MEASUREMENTS](index=31&type=section&id=(7)%20FAIR%20VALUE%20MEASUREMENTS) The company measures its interest rate swap using Level 2 inputs and contingent consideration liability using Level 3 inputs, with the Acculogic acquisition-related contingent consideration at **$872 thousand** at June 30, 2025, contingent on EV/battery sales - Interest rate swap agreement is measured at fair value using Level 2 inputs, while contingent consideration liability uses Level 3 inputs[115](index=115&type=chunk) - The contingent consideration liability, stemming from the Acculogic acquisition, is tied to EV or battery customer sales and has a maximum payout of **CAD $5.0 million (approx. $3.7 million)** through 2026[116](index=116&type=chunk) Fair Value Measurements (in thousands) | Item | June 30, 2025 (Total) | December 31, 2024 (Total) | | :--------------------------------- | :-------------------- | :------------------------ | | Interest rate swap | $58 | $117 | | Contingent consideration - current | $(431) | $(62) | | Contingent consideration - long term | $(441) | $(825) | [(8) ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES](index=33&type=section&id=(8)%20ACCRUED%20EXPENSES%20AND%20OTHER%20CURRENT%20LIABILITIES) Total accrued expenses and other current liabilities increased to **$9.9 million** at June 30, 2025, from **$9.5 million** at December 31, 2024, driven by other current liabilities, partially offset by decreased accrued wages and benefits Accrued Expenses and Other Current Liabilities (in thousands) | Category | June 30, 2025 | December 31, 2024 | | :--------------------------------- | :------------ | :------------------ | | Accrued wages and benefits | $4,609 | $5,420 | | Accrued professional fees | $1,360 | $1,294 | | Accrued sales commissions | $837 | $1,039 | | Accrued warranty | $978 | $802 | | Other current liabilities | $2,069 | $930 | | Total accrued expenses and other current liabilities | $9,853 | $9,485 | [(9) LEASES](index=34&type=section&id=(9)%20LEASES) Operating lease costs for the six months ended June 30, 2025, were **$1.3 million**, with a weighted average remaining lease term of **5.4 years** and total lease payments of **$12.2 million**, while the Alfamation™ acquisition increased ROU assets and operating lease liabilities by **$1.7 million** Operating and Short-Term Lease Costs (in thousands) | Period | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Operating lease cost | $641 | $509 | $1,294 | $960 | | Short-term lease cost | $2 | $4 | $6 | $7 | - The weighted average remaining lease term is **5.4 years**, with a weighted average discount rate of **6.7%** as of June 30, 2025[121](index=121&type=chunk) Maturities of Lease Liabilities (in thousands) | Year | Amount | | :--------------------------------- | :----- | | 2025 (remainder) | $1,410 | | 2026 | $2,529 | | 2027 | $2,334 | | 2028 | $1,696 | | 2029 | $1,583 | | Thereafter | $2,624 | | Total lease payments | $12,176 | - The Alfamation™ acquisition in March 2024 led to a non-cash increase of approximately **$1.7 million** in ROU assets and operating lease liabilities[122](index=122&type=chunk) [(10) DEBT](index=35&type=section&id=(10)%20DEBT) InTest has a Credit Facility with M&T Bank, including a **$50.5 million** Term Note and **$10.0 million** Revolving Facility, with **$30 million** available under the Term Note at June 30, 2025, and obtained a waiver for non-compliance with the fixed charge coverage ratio covenant until March 31, 2026, while assuming **$4.2 million** of debt from the Alfamation™ acquisition - The Credit Facility with M&T Bank includes a **$50.5 million** Term Note and a **$10.0 million** Revolving Facility, expiring May 2, 2031[125](index=125&type=chunk) - At June 30, 2025, **$30 million** was available under the Term Note, and no amounts were borrowed under the Revolving Facility[125](index=125&type=chunk) - The company was not in compliance with the fixed charge coverage ratio covenant (**0.80 to 1.0** vs. **1.25 to 1.0**) at June 30, 2025, but secured a waiver from M&T Bank until March 31, 2026[127](index=127&type=chunk)[128](index=128&type=chunk) Term Note Maturities (in thousands) | Year | Amount | | :--------------------------------- | :----- | | 2025 (remainder) | $2,050 | | 2026 | $3,842 | | Total remaining maturities of our Term Note | $5,892 | - Alfamation™ debt totaled **$4.2 million** at June 30, 2025, comprising fixed and variable rate term loans and short-term financing[132](index=132&type=chunk) [(11) REVENUE FROM CONTRACTS WITH CUSTOMERS](index=37&type=section&id=(11)%20REVENUE%20FROM%20CONTRACTS%20WITH%20CUSTOMERS) Consolidated revenue decreased by **14.2%** for the six months ended June 30, 2025, driven by declines in semi and auto/EV markets, with end user revenue decreasing and OEM/Integrator revenue seeing a larger decline, while contract liabilities increased to **$7.0 million** Revenue by Customer Type (in thousands) | Customer Type | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------- | :----------------------------- | :----------------------------- | | End user | $45,628 | $48,926 | | OEM/Integrator | $9,139 | $14,889 | | Total | $54,767 | $63,815 | Revenue by Product Type (in thousands) | Product Type | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------- | :----------------------------- | :----------------------------- | | Thermal test | $9,232 | $7,927 | | Thermal process | $10,828 | $20,798 | | Semiconductor test | $10,660 | $10,296 | | Video imaging | $4,346 | $3,804 | | Flying probe and in-circuit testers | $3,060 | $3,775 | | Alfamation™ products | $8,778 | $11,098 | | Service/other | $7,863 | $6,117 | | Total | $54,767 | $63,815 | Revenue by Market (in thousands) | Market | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------- | :----------------------------- | :----------------------------- | | Semi | $19,187 | $25,091 | | Auto/EV | $11,821 | $14,693 | | Defense/Aerospace | $6,406 | $6,921 | | Industrial | $6,807 | $7,602 | | Life Sciences | $3,074 | $2,847 | | Safety/Security | $1,462 | $1,333 | | Other | $6,010 | $5,328 | | Total | $54,767 | $63,815 | - Customer 'A' accounted for **11%** and **12%** of consolidated revenue for the three and six months ended June 30, 2025, respectively[137](index=137&type=chunk) Contract Liabilities (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :--------------------------------- | :------------ | :------------------ | | Total contract liabilities | $7,000 | $6,400 | [(12) EARNINGS (LOSS) PER SHARE](index=41&type=section&id=(12)%20EARNINGS%20(LOSS)%20PER%20SHARE) Weighted average common shares outstanding for basic and diluted EPS remained stable, with a significant number of potentially dilutive securities excluded from diluted EPS due to their anti-dilutive effect, reflecting the net loss reported Weighted Average Common Shares Outstanding | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Basic | 12,215,258 | 12,234,599 | 12,197,338 | 12,130,480 | | Diluted | 12,215,258 | 12,330,280 | 12,197,338 | 12,244,289 | - Average number of potentially dilutive securities excluded from diluted EPS calculation due to anti-dilutive effect: **662,167** for Q2 2025 and **769,896** for H1 2025[141](index=141&type=chunk) [(13) EQUITY](index=41&type=section&id=(13)%20EQUITY) The Board renewed the share repurchase plan on March 5, 2025, authorizing up to **$10.0 million** in common stock repurchases, with approximately **$9.0 million** available, and no repurchases made during the six months ended June 30, 2025 - Share repurchase plan renewed on March 5, 2025, authorizing up to **$10.0 million** in common stock repurchases[142](index=142&type=chunk) - Approximately **$9.0 million** was available for repurchases as of the renewal date[142](index=142&type=chunk) - No shares were repurchased under the plan during the six months ended June 30, 2025[261](index=261&type=chunk) [(14) STOCK-BASED COMPENSATION PLAN](index=41&type=section&id=(14)%20STOCK-BASED%20COMPENSATION%20PLAN) Total stock-based compensation expense for the six months ended June 30, 2025, was **$0.9 million**, with new stock options, restricted stock awards, and units granted, and several performance-based restricted stock awards forfeited due to non-achievement of criteria or employee termination Stock-Based Compensation Expense (in thousands) | Expense Category | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Cost of revenues | $45 | $37 | $83 | $68 | | Selling expense | $19 | $14 | $32 | $25 | | Engineering and product development expense | $10 | $8 | $(1) | $12 | | General and administrative expense | $361 | $505 | $744 | $808 | | Total | $435 | $564 | $858 | $913 | - Total compensation expense to be recognized in future periods is **$4.6 million**, with a weighted average period of **2.8 years**[146](index=146&type=chunk) Stock Option Activity (Six Months Ended June 30, 2025) | Metric | Number of Shares | Weighted Average Exercise Price | | :--------------------------------- | :--------------- | :------------------------------ | | Options outstanding, January 1, 2025 | 602,593 | $10.92 | | Granted | 310,086 | $7.74 | | Exercised | (4,925) | $3.69 | | Forfeited | (23,188) | $10.78 | | Options outstanding, June 30, 2025 | 884,566 | $9.85 | - Several performance-based restricted stock awards were forfeited in 2025 due to non-achievement of performance criteria or employee termination, totaling **37,823 shares** for the six months ended June 30, 2025[158](index=158&type=chunk)[159](index=159&type=chunk)[161](index=161&type=chunk)[162](index=162&type=chunk) [(15) EMPLOYEE STOCK PURCHASE PLAN](index=48&type=section&id=(15)%20EMPLOYEE%20STOCK%20PURCHASE%20PLAN) The ESPP allows eligible employees to purchase common stock at a **15% discount**, with **9,966 shares** purchased for the six months ended June 30, 2025, resulting in **$11 thousand** in compensation expense - The ESPP allows eligible employees to purchase common stock at a **15% discount** from the closing market price on the purchase date[166](index=166&type=chunk) ESPP Activity (Six Months Ended June 30) | Metric | 2025 | 2024 | | :--------------------------------- | :--- | :--- | | Shares purchased | 9,966 | 8,587 | | Total cost of shares | $60 | $84 | | Total discount (compensation expense) | $11 | $15 | [(16) RESTRUCTURING](index=48&type=section&id=(16)%20RESTRUCTURING) InTest initiated restructuring, including Videology Consolidation and Environmental Technologies leadership transition, expecting cash charges of **$425 thousand** for severance and **$200-$300 thousand** for facility consolidation, with total consolidated restructuring charges of **$529 thousand** for the six months ended June 30, 2025 - Restructuring includes the Videology Consolidation (Netherlands operations into US) and an Environmental Technologies leadership transition[168](index=168&type=chunk)[170](index=170&type=chunk) - Expected cash charges: **$425 thousand** for severance and termination benefits, and **$200-$300 thousand** for facility consolidation costs[171](index=171&type=chunk) Consolidated Restructuring Charges (in thousands) | Period | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | | :--------------------------------- | :------------------------------- | :----------------------------- | | Total consolidated restructuring charges | $216 | $529 | - The restructuring accrual was **$523 thousand** at June 30, 2025[173](index=173&type=chunk) [(17) EMPLOYEE BENEFIT PLANS](index=51&type=section&id=(17)%20EMPLOYEE%20BENEFIT%20PLANS) The company offers a 401(k) plan with discretionary employer matching contributions totaling **$0.6 million** for the six months ended June 30, 2025, and Alfamation™ employees are entitled to Trattamento di Fine Rapporto (TFR), a deferred compensation liability of **$1.6 million** at June 30, 2025 - The InTest Savings Plan is a defined contribution 401(k) plan with discretionary employer matching contributions[174](index=174&type=chunk) Discretionary Employer Matching Contributions (in thousands) | Period | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Matching contributions | $205 | $219 | $564 | $608 | - Alfamation™ employees in Italy are entitled to Trattamento di Fine Rapporto (TFR), a deferred compensation, with an accrual of **$1.6 million** at June 30, 2025[174](index=174&type=chunk) [(18) SEGMENT INFORMATION](index=51&type=section&id=(18)%20SEGMENT%20INFORMATION) InTest operates through three segments: Electronic Test, Environmental Technologies, and Process Technologies, selling products globally, with Electronic Test generating the highest revenue and operating income for the six months ended June 30, 2025, and foreign revenue accounting for **54%** of total revenue - The company's three operating segments are Electronic Test, Environmental Technologies, and Process Technologies[175](index=175&type=chunk) Revenue by Segment (Six Months Ended June 30, 2025, in thousands) | Segment | Revenue | | :--------------------------------- | :------ | | Electronic Test | $26,992 | | Environmental Technologies | $13,483 | | Process Technologies | $14,292 | | Consolidated | $54,767 | Division Operating Income (Loss) by Segment (Six Months Ended June 30, 2025, in thousands) | Segment | Operating Income (Loss) | | :--------------------------------- | :---------------------- | | Electronic Test | $2,241 | | Environmental Technologies | $356 | | Process Technologies | $606 | Revenue by Geographic Region (in thousands) | Region | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------- | :----------------------------- | :----------------------------- | | U.S. | $25,038 | $24,900 | | Foreign | $29,729 | $38,915 | | Total | $54,767 | $63,815 | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=56&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial condition and results of operations, highlighting key trends, critical accounting estimates, and a detailed comparison of financial performance, liquidity, capital resources, and the impact of recent accounting standards [Risk Factors and Forward-Looking Statements](index=56&type=section&id=Risk%20Factors%20and%20Forward-Looking%20Statements) - The report contains forward-looking statements based on management's current expectations and estimates, which involve risks and uncertainties[183](index=183&type=chunk) - Key risks include the ability to execute the VISION 2030 Strategy, grow in target markets, integrate acquisitions, manage semiconductor market cycles, ensure supply chain stability, and retain key personnel[186](index=186&type=chunk) [Overview](index=56&type=section&id=Overview) - InTest is a global supplier of innovative test and process technology solutions across various markets, including semi, auto/EV, defense/aerospace, industrial, life sciences, and safety/security[186](index=186&type=chunk) - The company's three reportable segments are Electronic Test, Environmental Technologies, and Process Technologies[187](index=187&type=chunk) - Consolidated gross margin can vary significantly due to changes in the mix of products sold, influenced by customer needs and varying gross margin levels across products[188](index=188&type=chunk) [Markets](index=58&type=section&id=Markets) - The semiconductor (semi) market has historically been the largest but is characterized by rapid technological change, competitive pricing, and cyclical patterns[189](index=189&type=chunk) - InTest aims to diversify its markets, product offerings, and customer base to reduce dependence on the volatile semi market, focusing on auto/EV, defense/aerospace, industrial, life sciences, and safety/security[189](index=189&type=chunk)[194](index=194&type=chunk) - Demand in the semi market is primarily driven by semiconductor manufacturers expanding or upgrading facilities, which depends on market demand for integrated circuits (ICs)[190](index=190&type=chunk) [Known Trends](index=60&type=section&id=Known%20Trends) - The company was not in compliance with the fixed charge coverage ratio covenant (**0.80 to 1.0**) at June 30, 2025, but secured a waiver from M&T Bank until March 31, 2026[196](index=196&type=chunk)[197](index=197&type=chunk) - Changes in global trade policy and tariffs could negatively impact demand, pricing, and costs, with approximately half of sales shipped to customers outside the U.S.[198](index=198&type=chunk)[258](index=258&type=chunk) - Supply chain risks include a sole-source capacitor supplier in Israel for Ambrell's induction heating products and a sole-source supplier in Belarus for Acculogic parts, now under sanctions, for which a new supplier has been qualified and OFAC/Global Affairs Canada licenses are pending for legacy parts[199](index=199&type=chunk)[200](index=200&type=chunk)[201](index=201&type=chunk)[202](index=202&type=chunk) [Critical Accounting Estimates](index=61&type=section&id=Critical%20Accounting%20Estimates) - No significant changes to critical accounting estimates as of June 30, 2025[205](index=205&type=chunk) - Critical estimates include inventories, long-lived assets, goodwill, identifiable intangibles, contingent consideration liabilities, and deferred income tax valuation allowances[205](index=205&type=chunk) [Results of Operations](index=61&type=section&id=Results%20of%20Operations) Revenue by Segment (in thousands) | Segment | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Electronic Test | $13,733 | $16,159 | $26,992 | $27,275 | | Environmental Technologies | $7,215 | $8,273 | $13,483 | $15,101 | | Process Technologies | $7,182 | $9,559 | $14,292 | $21,439 | | Total revenue | $28,130 | $33,991 | $54,767 | $63,815 | Revenue by Market (in thousands) | Market | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Semi | $10,192 | $10,124 | $19,187 | $25,091 | | Auto/EV | $5,862 | $10,735 | $11,821 | $14,693 | | Life Sciences | $1,386 | $2,194 | $3,074 | $2,847 | | Safety/Security | $898 | $792 | $1,462 | $1,333 | Orders by Market (in thousands) | Market | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Semi | $7,292 | $11,026 | $16,932 | $21,279 | | Auto/EV | $7,066 | $4,721 | $12,127 | $8,762 | | Life Sciences | $2,863 | $1,025 | $4,095 | $1,723 | | Safety/Security | $1,173 | $81 | $1,848 | $121 | - Gross margin improved by **200 basis points** to **42.6%** for the three months ended June 30, 2025, due to favorable product sales mix and cost reduction initiatives, but declined **10 basis points** to **42.0%** for the six months due to fixed cost absorption on lower volumes[212](index=212&type=chunk)[225](index=225&type=chunk) - Restructuring costs of **$216 thousand** and **$529 thousand** were recognized for the three and six months ended June 30, 2025, respectively, related to the Videology Consolidation and Environmental Transition[218](index=218&type=chunk)[230](index=230&type=chunk) [Liquidity and Capital Resources](index=68&type=section&id=Liquidity%20and%20Capital%20Resources) - Primary liquidity source is cash flow generated by operations, supplemented by the Credit Facility and potential equity issuance for long-term needs[233](index=233&type=chunk)[243](index=243&type=chunk) Cash and Working Capital (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :--------------------------------- | :------------ | :------------------ | | Cash and cash equivalents | $19,248 | $19,830 | | Working capital | $43,889 | $46,864 | - Net cash provided by operating activities for the six months ended June 30, 2025, was **$4.8 million**, a significant increase from **$(3.0) million** used in the prior year[244](index=244&type=chunk) - Net cash used in investing activities decreased by **$18.7 million** to **$(0.7) million** for the six months ended June 30, 2025, due to no acquisitions in the current period[245](index=245&type=chunk) - Net cash used in financing activities increased to **$(5.6) million** for the six months ended June 30, 2025, primarily due to repayments of short-term borrowings and long-term debt[246](index=246&type=chunk) [New or Recently Adopted Accounting Standards](index=70&type=section&id=New%20or%20Recently%20Adopted%20Accounting%20Standards) - Refer to Note (2) for information concerning the implementation and impact of new or recently adopted accounting standards[247](index=247&type=chunk) [Off-Balance Sheet Arrangements](index=71&type=section&id=Off-Balance%20Sheet%20Arrangements) - There were no material off-balance sheet arrangements during the three months ended June 30, 2025[248](index=248&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=71&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This disclosure is not required for a smaller reporting company - This disclosure is not required for a smaller reporting company[249](index=249&type=chunk) [Item 4. Controls and Procedures](index=71&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective as of June 30, 2025, with no material changes in internal control over financial reporting during the period - CEO and CFO concluded that disclosure controls and procedures were effective at the reasonable assurance level as of June 30, 2025[251](index=251&type=chunk) - No material changes in internal control over financial reporting occurred during the period covered by this report[252](index=252&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=71&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently involved in any material legal proceedings occurring in the ordinary course of business - The company is not currently involved in any material legal proceedings[254](index=254&type=chunk) [Item 1A. Risk Factors](index=72&type=section&id=Item%201A.%20Risk%20Factors) This section highlights adverse impacts of credit facility covenants on strategy, financial performance, and liquidity, especially given recent non-compliance, and addresses potential negative impacts from U.S. tariff policies and global retaliatory countermeasures on costs, supply chain, and customer purchasing - The company's credit facility covenants could adversely impact its ability to pursue strategy and affect financial performance and liquidity[256](index=256&type=chunk) - Non-compliance with the fixed charge coverage ratio covenant at June 30, 2025, was waived by M&T Bank until March 31, 2026, but requires consent for Revolving Facility use and a pledge of cash holdings[257](index=257&type=chunk) - U.S. tariff policies and potential global retaliatory countermeasures could increase costs, disrupt the supply chain, or affect customer purchasing activities, negatively impacting results of operations[258](index=258&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=73&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During the three months ended June 30, 2025, **2,049 shares** were surrendered by employees for tax withholdings, and while the share repurchase plan was renewed with **$9.0 million** available, no repurchases were made during the six months ended June 30, 2025 Shares Purchased (Three Months Ended June 30, 2025) | Period | Total Number of Shares Purchased | Average Price Paid Per Share | | :--------------------------------- | :----------------------------- | :--------------------------- | | April 1-30 | 1,951 | $6.31 | | May 1-31 | 98 | $6.41 | | June 1-30 | — | $ - | | Total | 2,049 | | - The share repurchase plan was renewed on March 5, 2025, authorizing up to **$10.0 million** in repurchases, with approximately **$9.0 million** available[260](index=260&type=chunk) - No repurchases were made under the Repurchase Plan during the six months ended June 30, 2025[261](index=261&type=chunk) [Item 3. Defaults Upon Senior Securities](index=73&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) There were no defaults upon senior securities during the reporting period - No defaults upon senior securities[262](index=262&type=chunk) [Item 4. Mine Safety Disclosures](index=73&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[263](index=263&type=chunk) [Item 5. Other Information](index=73&type=section&id=Item%205.%20Other%20Information) No directors or officers adopted or terminated Rule 10b5-1 trading arrangements during the second quarter, and the company entered into the Sixth Amendment to its Loan Agreement on August 5, 2025, waiving the Fixed Charge Coverage Ratio covenant until March 31, 2026, and pledging cash collateral - No directors or officers adopted or terminated a Rule 10b5-1 trading arrangement during the second quarter ended June 30, 2025[264](index=264&type=chunk) - The Sixth Amendment to the Loan Agreement, dated August 5, 2025, suspends compliance with the Fixed Charge Coverage Ratio covenant for periods ending June 30, 2025, through March 31, 2026[265](index=265&type=chunk) - In connection with the Sixth Amendment, the company pledged and granted M&T Bank a lien on certain cash collateral[265](index=265&type=chunk) [Item 6. Exhibits](index=75&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including the Sixth Amendment to the Loan Agreement, the Pledge and Assignment of Cash Collateral Account Agreement, and various certifications - Exhibits include the Sixth Amendment to the Amended and Restated Loan and Security Agreement and the Pledge and Assignment of Cash Collateral Account Agreement, both dated August 5, 2025[267](index=267&type=chunk) - Certifications from the Chief Executive Officer and Chief Financial Officer are also filed[267](index=267&type=chunk) SIGNATURES - The report is signed by Richard N. Grant, Jr., President and Chief Executive Officer, and Duncan Gilmour, Chief Financial Officer, Treasurer and Secretary, on August 7, 2025[271](index=271&type=chunk)

Core Insights - inTEST reported Q2 2025 results with adjusted earnings per share (Non-GAAP) of $0.03, exceeding the $(0.03) consensus, while revenue reached $28.1 million, slightly above the $28.0 million estimate, despite a 17.2% decline year-over-year [1][2] Financial Performance - Q2 2025 adjusted EBITDA was $1.3 million, marking a return to positive after a loss in the previous quarter [5] - Gross margin improved to 42.6%, up 2.0 percentage points from the previous year, driven by better product mix and cost containment [5][2] - Total orders increased by 6.0% year-over-year and 9.5% sequentially to $27.76 million, with significant growth in automotive/electric vehicle and life sciences sectors [6] Market and Product Focus - inTEST specializes in automated testing and processing technology for various sectors, including semiconductor, automotive, life sciences, and defense/aerospace [3] - The company is focusing on innovation and market diversification, with new products like the SCAiLX Edge AI platform and acquisitions such as Alfamation to drive growth [4] Segment Performance - Semiconductor revenue increased by 0.7% year-over-year to $10.2 million, but orders in this segment fell by 33.9% year-over-year, indicating cautious capital spending [7] - Automotive/EV revenue dropped by 50.0% year-over-year to $6.0 million, affected by customer order timing [7] - Life sciences orders surged by 179.3% year-over-year, reflecting strong performance in that segment [6] Operational Developments - The company is undergoing restructuring to enhance efficiency, with operating expenses projected between $12.6 million and $13.1 million for Q3 2025 [10] - Cash and undrawn term loan capacity stood at $19.2 million at the end of Q2 2025, despite a cash outflow of $2.8 million during the period [10] Future Outlook - Management projects Q3 2025 revenue in the range of $28 million to $30 million, indicating stable or slightly improved sales [12] - Key watch points include the recovery pace of semiconductor orders, execution of cost reductions, and progress in automotive/EV and life sciences segments [13]

Financial Data and Key Metrics Changes - Revenue for Q2 2025 was $28.1 million, with gross margins above 42% [7][13] - Net loss for the quarter was $500,000, or a loss of $0.04 per diluted share, while adjusted net earnings were $400,000, or a gain of $0.03 per diluted share [16] - Adjusted EBITDA for Q2 was $1.3 million [16] - Total debt was approximately $10.1 million at quarter end, reduced by $4.9 million year-to-date [17] Business Line Data and Key Metrics Changes - Orders for the quarter were nearly $28 million, reflecting a 10% sequential growth [10] - Auto EV demand increased by 40% to $7.1 million, while Life Sciences more than doubled to $2.9 million [10] - Safety and Security grew 74% to $1.2 million, but semi orders decreased by 24% sequentially [10] Market Data and Key Metrics Changes - Demand in the auto EV market increased significantly, while the semi market remained weak with a year-over-year decline of $3.7 million [11] - Backlog at June 30 was $37.9 million, flat over the last two quarters but down $9.8 million from the prior year [11] Company Strategy and Development Direction - The company is focused on driving innovation, market diversification, and geographic expansion as part of its Vision 2030 strategy [8][21] - The expansion of the manufacturing facility in Malaysia is expected to enhance market competitiveness and drive growth [9][21] Management's Comments on Operating Environment and Future Outlook - Management noted ongoing global economic and tariff uncertainties affecting customer investment in capital projects [6][21] - The customer pipeline is at an all-time high, indicating optimism for future capital spending [20][21] Other Important Information - The company has implemented cost-saving measures, including headcount reductions and operational restructuring, to improve long-term profitability [15][48] - The Malaysian facility is expected to generate $10 million to $15 million in revenue over time, supporting the Asian market [28][54] Q&A Session Summary Question: Is the recent defense order from a new customer? - The defense order is from an existing customer, following previous deliveries of prototype units [24][25] Question: How have customer order patterns been in the first six weeks of the quarter? - Order patterns have shown improvement, particularly in the automotive industry and defense space [26][27] Question: What is the capacity of the Malaysian facility? - The Malaysian facility is anticipated to support $10 million to $15 million in revenue over time [28] Question: Were the engineering challenges in Q1 related to defense? - The engineering challenges were primarily in industrial applications, not defense [31] Question: What are the expectations for the semi market in 2026? - A rebound in the semi market is expected in 2026, but the timing is still uncertain [33] Question: What is the outlook for life sciences orders? - There is a strong pipeline for continued orders in life sciences, driven by medical device electronics [35] Question: What are the leading indicators for order activity? - New products and a high customer pipeline are seen as positive indicators for future order activity [42][44] Question: How is the company managing operating expenses? - The company has reduced headcount and discretionary spending, with some savings expected to be temporary [46][48] Question: How will the Malaysian operations impact existing facilities? - The Malaysian facility aims to drive growth without significantly shifting operations from the U.S. [52][54]

Financial Performance - Orders increased by 6% year-over-year and 9.5% sequentially[13, 18] - Revenue decreased by $5.9 million year-over-year[25] - Revenue increased sequentially by $1.5 million[24] - Gross margin improved to 42.6%, a 200 bps increase year-over-year[30] - Reduced debt by $4.9 million during the first half of 2025, including $1.7 million in Q2[13, 50] Market Dynamics - Auto/EV sector orders increased by 39.6%, with Alfamation contributing $5.6 million[23] - Semiconductor sector orders decreased by $2.3 million and $3.7 million[23] - Industrial sales increased by 11%[29] Liquidity and Capital Structure - Cash and cash equivalents totaled $19.2 million as of June 30, 2025[49, 61] - Total debt was $10.1 million as of June 30, 2025[49] - Approximately $59 million in liquidity at June 30, 2025, including borrowing capacity[50] Future Outlook - Expects revenue to be $28 million to $30 million for Q3 2025[57] - Anticipates gross margin similar to Q2 2025[57] - Projects operating expenses of $12.6 million to $13.1 million for Q3 2025, excluding restructuring expenses[57]

分组1 - inTest Corporation (INTT) reported quarterly earnings of $0.03 per share, exceeding the Zacks Consensus Estimate of a loss of $0.04 per share, representing an earnings surprise of +175.00% [1] - The company posted revenues of $28.13 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 0.57%, but down from $33.99 million year-over-year [2] - inTest has surpassed consensus EPS estimates three times over the last four quarters and topped consensus revenue estimates two times in the same period [2] 分组2 - The stock has underperformed the market, losing about 19.3% since the beginning of the year compared to the S&P 500's gain of 7.1% [3] - The current consensus EPS estimate for the coming quarter is -$0.01 on revenues of $29.37 million, and -$0.09 on revenues of $115.84 million for the current fiscal year [7] - The Zacks Industry Rank for Electronics - Measuring Instruments is in the top 13% of over 250 Zacks industries, indicating a favorable outlook for the industry [8]

[Executive Summary & Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Highlights) [Second Quarter 2025 Highlights](index=1&type=section&id=Second%20Quarter%202025%20Highlights) InTest reported improved orders, expanded gross margin, and narrowed losses for Q2 2025, driven by strength in auto/EV and life sciences, despite ongoing economic uncertainties - Orders improved **6% year-over-year**, or **$1.6 million**, reflecting strength in auto/EV and life sciences, and grew **$2.4 million sequentially** as demand increased across all markets except semiconductor[4](index=4&type=chunk)[13](index=13&type=chunk) - Revenue increased **6% sequentially** to **$28.1 million**[4](index=4&type=chunk) - Total debt was further reduced by **$1.7 million** from March 31, 2025[4](index=4&type=chunk)[11](index=11&type=chunk) - Operating loss narrowed to **$0.9 million** and net loss to **$0.5 million**; Adjusted EBITDA was **$1.3 million**[4](index=4&type=chunk) [CEO Commentary](index=1&type=section&id=CEO%20Commentary) President and CEO Nick Grant highlighted the company's focus on executing its VISION 2030 Growth Strategy, driving innovation, market diversification, and geographic expansion amidst global economic uncertainties. He noted traction from new products, customer additions, and a record-high funnel of opportunities - The company remained focused on executing its VISION 2030 Growth Strategy, driving innovation, market diversification, and geographic expansion[3](index=3&type=chunk) - Recently introduced products continued to gain traction, new customers were added, and the channel network expanded[3](index=3&type=chunk) - Orders improved over both the prior year and trailing quarters, reflecting renewed purchasing among automotive customers, with Alfamation achieving its highest level of orders since joining InTest[3](index=3&type=chunk) - InTest's funnel of opportunities increased to a new all-time high, reinforcing confidence in target market fundamentals[3](index=3&type=chunk) [Financial Performance Review](index=3&type=section&id=Financial%20Performance%20Review) [Consolidated Financial Highlights](index=3&type=section&id=Consolidated%20Financial%20Highlights) The second quarter of 2025 saw sequential revenue growth and improved gross margin, though year-over-year comparisons showed declines in revenue and net earnings, with adjusted non-GAAP metrics reflecting a similar trend Three Months Ended June 30, 2025 vs. Prior Periods (in thousands) | Metric | June 30, 2025 | June 30, 2024 | Change ($) | Change (%) | March 31, 2025 | Change ($) (vs Q1) | Change (%) (vs Q1) | | :-------------------------------- | :------------ | :------------ | :--------- | :--------- | :------------- | :----------------- | :----------------- | | Revenue | $28,130 | $33,991 | $(5,861) | (17.2)% | $26,637 | $1,493 | 5.6% | | Gross profit | $11,973 | $13,797 | $(1,824) | (13.2)% | $11,056 | $917 | 8.3% | | Gross margin | 42.6% | 40.6% | | | 41.5% | | | | Operating (loss) income | $(927) | $336 | $(1,263) | n/m | $(2,881) | $1,954 | n/m | | Net (loss) earnings | $(503) | $230 | $(733) | n/m | $(2,329) | $1,826 | n/m | | Diluted EPS | $(0.04) | $0.02 | $(0.06) | (300.0)% | $(0.19) | $0.15 | 78.9% | | Adjusted net (loss) earnings (Non-GAAP) | $417 | $959 | $(542) | (56.5)% | $(1,389) | $1,806 | n/m | | Adjusted EPS (Non-GAAP) | $0.03 | $0.08 | $(0.05) | (62.5)% | $(0.11) | $0.14 | n/m | | Adjusted EBITDA (Non-GAAP) | $1,262 | $2,154 | $(892) | (41.4)% | $(887) | $2,149 | n/m | | Adjusted EBITDA margin (Non-GAAP) | 4.5% | 6.3% | | | (3.3%) | | | [Revenue and Gross Margin Analysis](index=3&type=section&id=Revenue%20and%20Gross%20Margin%20Analysis) Second quarter revenue saw sequential growth driven by semiconductor, industrial, defense/aerospace, and safety/security markets, offsetting declines in other areas. Year-over-year revenue decreased primarily due to auto/EV sales. Gross margin improved both sequentially and year-over-year due to higher volume, favorable product mix, and cost reductions - Sequentially, Q2 2025 revenue was up **$1.5 million** over Q1 2025, with sales increases in semi (**$1.2 million**), industrial (**$0.8 million**), defense/aerospace (**$0.8 million**), and safety/security (**$0.3 million**), outpacing declines in life sciences, auto/EV, and other markets[7](index=7&type=chunk) - Compared with the prior-year period, Q2 2025 revenue was down **$5.9 million**, primarily due to a **$4.9 million** decline in auto/EV sales, partially offset by increases in industrial, safety/security, and semi[8](index=8&type=chunk) - Gross margin increased **110 basis points sequentially** to **42.6%** based on higher volume and ongoing cost reductions, and improved **200 basis points year-over-year** due to favorable product mix and cost reduction efforts[8](index=8&type=chunk)[9](index=9&type=chunk) [Operating Expenses and Net Loss](index=3&type=section&id=Operating%20Expenses%20and%20Net%20Loss) Operating expenses decreased both sequentially and year-over-year due to cost reduction efforts, contributing to a narrowed net loss and positive adjusted net earnings for the quarter - Operating expenses decreased **$1.0 million sequentially** and **$0.6 million** from the prior-year period, primarily due to ongoing cost reduction efforts and reduced corporate development costs[9](index=9&type=chunk) - Net loss for Q2 2025 was **$0.5 million**, or **$(0.04) per diluted share**[10](index=10&type=chunk) - Adjusted net earnings (Non-GAAP) were **$0.4 million**, or **$0.03 adjusted EPS (Non-GAAP)**[10](index=10&type=chunk) [Balance Sheet and Cash Flow](index=5&type=section&id=Balance%20Sheet%20and%20Cash%20Flow) [Balance Sheet Overview](index=5&type=section&id=Balance%20Sheet%20Overview) InTest maintained a strong financial position by reducing total debt and securing a covenant waiver, while managing cash and available credit facilities - Cash and cash equivalents at June 30, 2025, were **$19.2 million**, a decrease of **$2.8 million** from the end of Q1 2025[11](index=11&type=chunk) - Total debt was reduced by **$1.7 million** from March 31, 2025, to **$10.1 million**[11](index=11&type=chunk) - The Company had **$30.0 million** available under its delayed draw term loan facility and no borrowings under the **$10.0 million** revolving credit facility[12](index=12&type=chunk) - A covenant waiver agreement was entered into with its U.S. based lender through Q1 2026, in exchange for pledging cash equal to U.S. debt outstanding (**$5.9 million** at June 30, 2025)[12](index=12&type=chunk) [Cash Flow Activities](index=5&type=section&id=Cash%20Flow%20Activities) During Q2 2025, the company utilized cash primarily for working capital investments and capital expenditures - The Company used **$0.7 million** in operations primarily for working capital investments during the quarter[11](index=11&type=chunk) - Capital expenditures were **$0.5 million** in the second quarter of 2025[11](index=11&type=chunk) [Orders and Backlog](index=5&type=section&id=Orders%20and%20Backlog) [Orders Performance](index=5&type=section&id=Orders%20Performance) Orders for Q2 2025 showed significant growth both year-over-year and sequentially, driven by strong performance in auto/EV, life sciences, and other industrial markets, despite a slowdown in the semiconductor market - Second quarter orders of **$27.8 million** grew **$1.6 million (6.0%)** versus the prior-year period and **$2.4 million (9.5%)** compared with the first quarter[13](index=13&type=chunk) - The year-over-year increase reflects strength in auto/EV, life sciences, industrial, and safety/security markets, while orders slowed in semi and defense/aerospace markets[13](index=13&type=chunk) - Sequentially, the **9.5% increase** in orders was primarily driven by auto/EV and life sciences, as well as safety/security, defense/aerospace, industrial, and other markets, outpacing the decline in semi[14](index=14&type=chunk) [Backlog Status](index=5&type=section&id=Backlog%20Status) The company's backlog at the end of Q2 2025 remained substantial, with a significant portion expected to ship beyond the immediate next quarter - Backlog at June 30, 2025, was **$37.9 million**, slightly below the March 31, 2025 level[14](index=14&type=chunk) - Approximately **50%** of the backlog is expected to ship beyond the third quarter of 2025[14](index=14&type=chunk) [Business Outlook](index=5&type=section&id=Business%20Outlook) [Third Quarter 2025 Guidance](index=5&type=section&id=Third%20Quarter%202025%20Guidance) InTest provided financial guidance for Q3 2025, forecasting revenue between $28 million and $30 million, with gross margin similar to Q2 and operating expenses in the range of $12.6 million to $13.1 million - Third quarter 2025 revenue is forecasted to be **$28 million to $30 million**[15](index=15&type=chunk) - Gross margin is expected to be similar to the second quarter[15](index=15&type=chunk) - Operating expenses are projected to be **$12.6 million to $13.1 million**, excluding approximately **$0.1 million** in Videology and other restructuring expenses[15](index=15&type=chunk) [Strategic Vision 2030 Progress](index=5&type=section&id=Strategic%20Vision%202030%20Progress) The company continues to advance its VISION 2030 Growth Strategy through customer acquisition, market expansion, and innovation, despite persistent weak market conditions, particularly in the digital/analog semi industry - Progress continues on the VISION 2030 Growth Strategy by adding new customers, expanding market reach, and innovating to drive value proposition[15](index=15&type=chunk) - Encouraged by wins in auto/EV, life sciences, and defense/aerospace[15](index=15&type=chunk) - Visibility remains limited amid persistently weak market conditions for capital investment, most notably in the digital/analog semi industry[15](index=15&type=chunk) - The company still expects to deliver growth quarter over quarter in 2025, albeit at a slower pace than originally anticipated[15](index=15&type=chunk) [Company Information & Disclosures](index=5&type=section&id=Company%20Information%20%26%20Disclosures) [About InTest Corporation](index=7&type=section&id=About%20InTest%20Corporation) InTest Corporation is a global supplier of innovative test and process technology solutions for manufacturing and testing across diverse key target markets, including semiconductor, automotive/EV, defense/aerospace, industrial, life sciences, and safety/security, pursuing growth organically and through acquisitions - InTest Corporation is a global supplier of innovative test and process technology solutions for manufacturing and testing[21](index=21&type=chunk) - Key target markets include semiconductor (front-end and back-end), automotive/EV, defense/aerospace, industrial, life sciences, and safety/security[21](index=21&type=chunk) - The growth strategy leverages engineering expertise and operational excellence to grow organically and with acquisitions through innovative technologies, geographic reach, customer penetration, and market expansion[21](index=21&type=chunk) [Non-GAAP Financial Measures](index=7&type=section&id=Non-GAAP%20Financial%20Measures) This section defines and explains the company's use of non-GAAP financial measures, including adjusted net earnings, adjusted EPS, adjusted EBITDA, and adjusted EBITDA margin, which are used to provide supplemental information regarding baseline performance and liquidity - Non-GAAP financial measures include adjusted net earnings, adjusted earnings per diluted share (adjusted EPS), adjusted EBITDA, and adjusted EBITDA margin[22](index=22&type=chunk) - Adjusted net earnings and adjusted EPS exclude acquired intangible amortization, restructuring costs, and inventory step-up charges, as management believes these may not be indicative of underlying operating performance[22](index=22&type=chunk) - Adjusted EBITDA and adjusted EBITDA margin are presented primarily as a measure of liquidity, excluding non-cash charges, restructuring costs, interest, and income tax[22](index=22&type=chunk) Reconciliation of Net Earnings to Adjusted Net Earnings (Non-GAAP) and EPS (Non-GAAP) (in thousands except per share amounts) | Metric | June 30, 2025 | June 30, 2024 | March 31, 2025 | | :-------------------------------- | :------------ | :------------ | :------------- | | Net (loss) earnings | $(503) | $230 | $(2,329) | | Acquired intangible amortization | $850 | $897 | $813 | | Restructuring costs | $216 | $— | $313 | | Tax effect of adjusting items | $(146) | $(168) | $(186) | | **Adjusted net earnings (loss) (Non-GAAP)** | **$417** | **$959** | **$(1,389)** | | Diluted weighted average shares outstanding | 12,246 | 12,330 | 12,179 | | **Adjusted EPS (Non-GAAP)** | **$0.03** | **$0.08** | **$(0.11)** | Reconciliation of Net Earnings and Net Margin to Adjusted EBITDA (Non-GAAP) and Adjusted EBITDA Margin (Non-GAAP) (in thousands except percentage data) | Metric | June 30, 2025 | June 30, 2024 | March 31, 2025 | | :-------------------------------- | :------------ | :------------ | :------------- | | Net (loss) earnings | $(503) | $230 | $(2,329) | | Acquired intangible amortization | $850 | $897 | $813 | | Net interest expense | $30 | $41 | $37 | | Income tax (benefit) expense | $(80) | $66 | $(460) | | Depreciation | $314 | $356 | $316 | | Restructuring costs | $216 | $— | $313 | | Stock-based compensation | $435 | $564 | $423 | | **Adjusted EBITDA (Non-GAAP)** | **$1,262** | **$2,154** | **$(887)** | | Revenue | $28,130 | $33,991 | $26,637 | | Net margin | (1.8%) | 0.7% | (8.7%) | | **Adjusted EBITDA margin (Non-GAAP)** | **4.5%** | **6.3%** | **(3.3%)** | [Key Performance Indicators](index=7&type=section&id=Key%20Performance%20Indicators) InTest utilizes orders and backlog as key operational metrics to analyze and measure financial performance, considering them leading indicators of future business activity - Orders represent written communications received from customers requesting products and/or services[25](index=25&type=chunk)[26](index=26&type=chunk) - Backlog is calculated based on firm purchase orders for which revenue has not yet been recognized[26](index=26&type=chunk) - Management uses orders and backlog as key performance metrics and leading indicators of future performance[27](index=27&type=chunk) [Forward-Looking Statements](index=9&type=section&id=Forward-Looking%20Statements) This section serves as a disclaimer, highlighting that the press release contains forward-looking statements based on management's current expectations, which are subject to various risks and uncertainties that could cause actual results to differ materially - The press release includes forward-looking statements relating to predicted or potential future events and financial results, based upon management's current expectations[29](index=29&type=chunk) - These statements are subject to risks and uncertainties that could cause actual results to differ materially, including the ability to execute the VISION 2030 Growth Strategy, market cycles, economic conditions, and supply chain challenges[29](index=29&type=chunk) [Financial Statements](index=10&type=section&id=Financial%20Statements) [Consolidated Statements of Operations](index=10&type=section&id=Consolidated%20Statements%20of%20Operations) This statement provides a detailed breakdown of InTest Corporation's revenues, costs, and expenses, culminating in the net loss for the three and six months ended June 30, 2025, compared to the prior year Consolidated Statements of Operations (Unaudited, In thousands, except share and per share data) | (In thousands, except share and per share data) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenue | $28,130 | $33,991 | $54,767 | $63,815 | | Cost of revenue | 16,157 | 20,194 | 31,738 | 36,942 | | Gross profit | 11,973 | 13,797 | 23,029 | 26,873 | | Operating expenses: | | | | | | Selling expense | 3,829 | 4,105 | 8,376 | 8,695 | | Engineering and product development expense | 2,245 | 2,218 | 4,693 | 4,200 | | General and administrative expense | 5,760 | 6,241 | 11,576 | 11,658 | | Amortization of acquired intangible assets | 850 | 897 | 1,663 | 1,492 | | Restructuring costs | 216 | — | 529 | — | | Total operating expenses | 12,900 | 13,461 | 26,837 | 26,045 | | Operating (loss) income | (927) | 336 | (3,808) | 828 | | Interest expense | (119) | (253) | (271) | (393) | | Other income | 463 | 213 | 707 | 648 | | (Loss) earnings before income tax (benefit) expense | (583) | 296 | (3,372) | 1,083 | | Income tax (benefit) expense | (80) | 66 | (540) | 191 | | Net (loss) earnings | $(503) | $230 | $(2,832) | $892 | | (Loss) earnings per common share: | | | | | | Basic | $(0.04) | $0.02 | $(0.23) | $0.07 | | Diluted | $(0.04) | $0.02 | $(0.23) | $0.07 | | Weighted average common shares outstanding: | | | | | | Basic | 12,215,258 | 12,234,599 | 12,197,338 | 12,130,480 | | Diluted | 12,215,258 | 12,330,280 | 12,197,338 | 12,244,289 | [Consolidated Balance Sheets](index=11&type=section&id=Consolidated%20Balance%20Sheets) This statement presents InTest Corporation's financial position, detailing assets, liabilities, and stockholders' equity as of June 30, 2025, compared to December 31, 2024 Consolidated Balance Sheets (Unaudited, In thousands, except share and per share data) | (In thousands, except share and per share data) | June 30, 2025 | December 31, 2024 | | :---------------------------------------------- | :------------ | :---------------- | | ASSETS | | | | Current assets: | | | | Cash and cash equivalents | $19,248 | $19,830 | | Trade accounts receivable, net | 23,349 | 29,495 | | Inventories | 27,610 | 26,837 | | Prepaid expenses and other current assets | 4,640 | 2,650 | | Total current assets | 74,847 | 78,812 | | Property and equipment, net | 4,677 | 4,457 | | Right-of-use assets, net | 10,071 | 10,767 | | Goodwill | 32,437 | 30,744 | | Intangible assets, net | 26,647 | 26,376 | | Deferred tax assets | — | 67 | | Other assets | 974 | 1,065 | | **Total assets** | **$149,653** | **$152,288** | | LIABILITIES AND STOCKHOLDERS' EQUITY | | | | Current liabilities: | | | | Current portion of long-term debt | $6,426 | $7,494 | | Current portion of operating lease liabilities | 2,100 | 1,989 | | Accounts payable | 6,981 | 7,991 | | Customer deposits and deferred revenue | 5,598 | 4,989 | | Accrued expenses and other current liabilities | 9,853 | 9,485 | | Total current liabilities | 30,958 | 31,948 | | Operating lease liabilities, net of current portion | 8,316 | 9,021 | | Long-term debt, net of current portion | 3,667 | 7,538 | | Contingent consideration, net of current portion | 441 | 825 | | Deferred revenue, net of current portion | 1,367 | 1,432 | | Deferred tax liabilities | 525 | — | | Other liabilities | 1,787 | 1,734 | | **Total liabilities** | **47,061** | **52,498** | | Stockholders' equity: | | | | Common stock | 125 | 124 | | Additional paid-in capital | 58,604 | 57,658 | | Retained earnings | 42,255 | 45,087 | | Accumulated other comprehensive earnings (loss) | 2,567 | (2,137) | | Treasury stock, at cost | (959) | (942) | | **Total stockholders' equity** | **102,592** | **99,790** | | **Total liabilities and stockholders' equity** | **$149,653** | **$152,288** | [Consolidated Statements of Cash Flows](index=12&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) This statement outlines the cash inflows and outflows from operating, investing, and financing activities for the six months ended June 30, 2025, and 2024, showing the net change in cash and cash equivalents Consolidated Statements of Cash Flows (Unaudited, In thousands) | (In thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------------ | :----------------------------- | :----------------------------- | | CASH FLOWS FROM OPERATING ACTIVITIES | | | | Net (loss) earnings | $(2,832) | $892 | | Adjustments to reconcile net (loss) earnings to net cash provided by (used in) operating activities: | | | | Depreciation and amortization | 3,306 | 2,806 | | Provision for excess and obsolete inventory | 304 | 306 | | Amortization of deferred compensation related to stock-based awards | 858 | 913 | | Deferred income tax expense | 205 | 347 | | Other non-cash reconciling items | (383) | 47 | | Changes in assets and liabilities: | | | | Trade accounts receivable | 6,865 | (5,693) | | Inventories | 203 | 1,966 | | Prepaid expenses and other current assets | (438) | 1,296 | | Other assets | (36) | (118) | | Operating lease liabilities | (966) | (765) | | Accounts payable | (898) | (1,899) | | Customer deposits and deferred revenue | 272 | (861) | | Domestic and foreign income taxes payable | (883) | (851) | | Deferred revenue, net of current portion | (65) | (75) | | Accrued expenses and other liabilities | (665) | (1,326) | | **Net cash provided by (used in) operating activities** | **4,847** | **(3,015)** | | CASH FLOWS FROM INVESTING ACTIVITIES | | | | Acquisition of business, net of cash acquired | — | (18,727) | | Purchases of property and equipment | (691) | (656) | | **Net cash used in investing activities** | **(691)** | **(19,383)** | | CASH FLOWS FROM FINANCING ACTIVITIES | | | | (Repayments of short-term borrowings, net of proceeds) proceeds from short-term borrowings | (3,613) | 1,120 | | Repayments of long-term debt | (2,050) | (3,129) | | Proceeds from stock options exercised | 18 | 116 | | Proceeds from shares sold under Employee Stock Purchase Plan | 60 | 84 | | Settlement of employee tax liabilities in connection with treasury stock transaction | (17) | (41) | | **Net cash used in by financing activities** | **(5,602)** | **(1,850)** | | Effects of exchange rates on cash | 864 | (642) | | **Net cash used in all activities** | **(582)** | **(24,890)** | | Cash, cash equivalents and restricted cash at beginning of period | 19,830 | 45,260 | | **Cash and cash equivalents at end of period** | **$19,248** | **$20,370** | | Cash payments for: | | | | Domestic and foreign income taxes | $145 | $1,153 | | Interest | $266 | $406 | | SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES | | | | Equity issued in conjunction with acquisition of business | $— | $2,086 | | Issuance of unvested shares of restricted stock awards | 1,039 | 1,580 | | Forfeiture of shares of unvested restricted stock awards | (557) | (138) | [Revenue by Market](index=13&type=section&id=Revenue%20by%20Market) This table provides a detailed breakdown of InTest Corporation's revenue across various market segments for the three months ended June 30, 2025, compared to prior periods, highlighting changes in contribution from each market Revenue by Market (Unaudited, in thousands) | ($ in thousands) | June 30, 2025 | % | June 30, 2024 | % | Change ($) | Change (%) | March 31, 2025 | % | Change ($) (vs Q1) | Change (%) (vs Q1) | | :---------------- | :------------ | :-- | :------------ | :-- | :--------- | :--------- | :------------- | :-- | :----------------- | :----------------- | | Semi | $10,192 | 36.2% | $10,124 | 29.8% | $68 | 0.7% | $8,995 | 33.8% | $1,197 | 13.3% | | Auto/EV | 5,862 | 20.8% | 10,735 | 31.6% | (4,873) | (45.4)% | 5,959 | 22.4% | (97) | (1.6)% | | Defense/Aerospace | 3,578 | 12.7% | 3,682 | 10.8% | (104) | (2.8)% | 2,828 | 10.6% | 750 | 26.5% | | Industrial | 3,786 | 13.5% | 3,415 | 10.0% | 371 | 10.9% | 3,021 | 11.3% | 765 | 25.3% | | Life Sciences | 1,386 | 4.9% | 2,194 | 6.5% | (808) | (36.8)% | 1,688 | 6.3% | (302) | (17.9)% | | Safety/Security | 898 | 3.2% | 792 | 2.3% | 106 | 13.4% | 564 | 2.1% | 334 | 59.2% | | Other | 2,428 | 8.6% | 3,049 | 9.0% | (621) | (20.4)% | 3,582 | 13.4% | (1,154) | (32.2)% | | **Total Revenue** | **$28,130** | **100.0%** | **$33,991** | **100.0%** | **$(5,861)** | **(17.2)%** | **$26,637** | **100.0%** | **$1,493** | **5.6%** | [Orders by Market](index=13&type=section&id=Orders%20by%20Market) This table presents the breakdown of orders received by InTest Corporation across various market segments for the three months ended June 30, 2025, showing year-over-year and sequential changes Orders by Market (Unaudited, in thousands) | ($ in thousands) | June 30, 2025 | % | June 30, 2024 | % | Change ($) | Change (%) | March 31, 2025 | % | Change ($) (vs Q1) | Change (%) (vs Q1) | | :---------------- | :------------ | :-- | :------------ | :-- | :--------- | :--------- | :------------- | :-- | :----------------- | :----------------- | | Semi | $7,292 | 26.3% | $11,026 | 42.1% | $(3,734) | (33.9)% | $9,640 | 38.0% | $(2,348) | (24.4)% | | Auto/EV | 7,066 | 25.5% | 4,721 | 18.0% | 2,345 | 49.7% | 5,061 | 20.0% | 2,005 | 39.6% | | Defense/Aerospace | 2,499 | 9.0% | 2,665 | 10.2% | (166) | (6.2)% | 2,083 | 8.2% | 416 | 20.0% | | Industrial | 4,680 | 16.9% | 3,485 | 13.4% | 1,195 | 34.3% | 4,551 | 18.0% | 129 | 2.8% | | Life Sciences | 2,863 | 10.3% | 1,025 | 3.9% | 1,838 | 179.3% | 1,232 | 4.9% | 1,631 | 132.4% | | Safety/Security | 1,173 | 4.2% | 81 | 0.3% | 1,092 | 1348.1% | 675 | 2.7% | 498 | 73.8% | | Other | 2,186 | 7.9% | 3,179 | 12.1% | (993) | (31.2)% | 2,107 | 8.3% | 79 | 3.7% | | **Total Orders** | **$27,759** | **100.0%** | **$26,182** | **100.0%** | **$1,577** | **6.0%** | **$25,349** | **100.0%** | **$2,410** | **9.5%** | [Segment Data](index=15&type=section&id=Segment%20Data) This section provides a detailed financial breakdown by InTest Corporation's operating segments: Electronic Test, Environmental Technologies, and Process Technologies, along with Corporate & Other, for the three and six months ended June 30, 2025 and 2024 Segment Data - Three Months Ended June 30, 2025 (Unaudited, in thousands) | ($ in thousands) | Electronic Test | Environmental Technologies | Process Technologies | Corporate & Other | Consolidated | | :---------------- | :-------------- | :------------------------- | :------------------- | :---------------- | :----------- | | Revenue | $13,733 | $7,215 | $7,182 | $— | $28,130 | | Cost of revenue | 7,418 | 4,534 | 4,205 | — | 16,157 | | Other divisional costs | 4,755 | 2,070 | 2,578 | — | 9,403 | | Division operating income | 1,560 | 611 | 399 | — | 2,570 | | Acquired intangible amortization | | | | 850 | 850 | | Restructuring costs | | | | 216 | 216 | | Corporate expenses | | | | 2,431 | 2,431 | | Operating (loss) income | 1,560 | 611 | 399 | (3,497) | (927) | | Interest expense | | | | (119) | (119) | | Other income | | | | 463 | 463 | | (Loss) earnings before income tax expense | $1,560 | $611 | $399 | $(3,153) | $(583) | Segment Data - Three Months Ended June 30, 2024 (Unaudited, in thousands) | ($ in thousands) | Electronic Test | Environmental Technologies | Process Technologies | Corporate & Other | Consolidated | | :---------------- | :-------------- | :------------------------- | :------------------- | :---------------- | :----------- | | Revenue | $16,159 | $8,273 | $9,559 | $— | $33,991 | | Cost of revenue | 9,462 | 5,016 | 5,716 | — | 20,194 | | Other divisional costs | 4,954 | 2,264 | 2,873 | — | 10,091 | | Division operating income | 1,743 | 993 | 970 | — | 3,706 | | Acquired intangible amortization | | | | 897 | 897 | | Corporate expenses | | | | 2,473 | 2,473 | | Operating income (loss) | 1,743 | 993 | 970 | (3,370) | 336 | | Interest expense | | | | (253) | (253) | | Other income | | | | 213 | 213 | | Earnings (loss) before income tax expense | $1,743 | $993 | $970 | $(3,410) | $296 | Segment Data - Six Months Ended June 30, 2025 (Unaudited, in thousands) | ($ in thousands) | Electronic Test | Environmental Technologies | Process Technologies | Corporate & Other | Consolidated | | :---------------- | :-------------- | :------------------------- | :------------------- | :---------------- | :----------- | | Revenue | $26,992 | $13,483 | $14,292 | $— | $54,767 | | Cost of revenue | 14,731 | 8,697 | 8,310 | — | 31,738 | | Other divisional costs | 10,020 | 4,430 | 5,376 | — | 19,826 | | Division operating income | 2,241 | 356 | 606 | — | 3,203 | | Acquired intangible amortization | | | | 1,663 | 1,663 | | Restructuring costs | | | | 529 | 529 | | Corporate expenses | | | | 4,819 | 4,819 | | Operating (loss) income | 2,241 | 356 | 606 | (7,011) | (3,808) | | Interest expense | | | | (271) | (271) | | Other income | | | | 707 | 707 | | (Loss) earnings before income tax expense | $2,241 | $356 | $606 | $(6,575) | $(3,372) | [Reconciliation of Non-GAAP Financial Measures](index=16&type=section&id=Reconciliation%20of%20Non-GAAP%20Financial%20Measures) This section provides detailed reconciliations of GAAP net earnings and EPS to their non-GAAP adjusted counterparts, and net earnings/net margin to adjusted EBITDA/adjusted EBITDA margin, for the three months ended June 30, 2025, and prior periods Reconciliation of Net Earnings to Adjusted Net Earnings (Non-GAAP) and EPS (Non-GAAP) (in thousands except per share amounts) | Metric | June 30, 2025 | June 30, 2024 | March 31, 2025 | | :-------------------------------- | :------------ | :------------ | :------------- | | Net (loss) earnings | $(503) | $230 | $(2,329) | | Acquired intangible amortization | $850 | $897 | $813 | | Restructuring costs | $216 | $— | $313 | | Tax effect of adjusting items | $(146) | $(168) | $(186) | | **Adjusted net earnings (loss) (Non-GAAP)** | **$417** | **$959** | **$(1,389)** | | Diluted weighted average shares outstanding | 12,246 | 12,330 | 12,179 | | **Adjusted EPS (Non-GAAP)** | **$0.03** | **$0.08** | **$(0.11)** | Reconciliation of Net Earnings and Net Margin to Adjusted EBITDA (Non-GAAP) and Adjusted EBITDA Margin (Non-GAAP) (in thousands except percentage data) | Metric | June 30, 2025 | June 30, 2024 | March 31, 2025 | | :-------------------------------- | :------------ | :------------ | :------------- | | Net (loss) earnings | $(503) | $230 | $(2,329) | | Acquired intangible amortization | $850 | $897 | $813 | | Net interest expense | $30 | $41 | $37 | | Income tax (benefit) expense | $(80) | $66 | $(460) | | Depreciation | $314 | $356 | $316 | | Restructuring costs | $216 | $— | $313 | | Stock-based compensation | $435 | $564 | $423 | | **Adjusted EBITDA (Non-GAAP)** | **$1,262** | **$2,154** | **$(887)** | | Revenue | $28,130 | $33,991 | $26,637 | | Net margin | (1.8%) | 0.7% | (8.7%) | | **Adjusted EBITDA margin (Non-GAAP)** | **4.5%** | **6.3%** | **(3.3%)** |

Group 1 - inTEST (NYSE: INTT) is currently priced under $7 per share, presenting an interesting investment opportunity [1] - The company is experiencing fundamental pressure on sales and margins due to weaker end-market conditions [1] - The potential bullish case for inTEST suggests that the current challenges may not reflect the long-term viability of the business [1]

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) The company reported a Q1 2025 net loss of $2.3 million, a significant downturn from a $0.7 million net earning in Q1 2024 [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) Total assets decreased to $148.0 million as of March 31, 2025, mainly due to a reduction in trade accounts receivable Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 (Unaudited) | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $22,048 | $19,830 | | Trade accounts receivable, net | $21,178 | $29,495 | | Inventories | $27,608 | $26,837 | | Goodwill | $31,236 | $30,744 | | **Total Assets** | **$148,027** | **$152,288** | | **Liabilities & Equity** | | | | Current portion of long-term debt | $6,876 | $7,494 | | Long-term debt, net | $4,952 | $7,538 | | **Total Liabilities** | **$48,632** | **$52,498** | | **Total Stockholders' Equity** | **$99,395** | **$99,790** | [Consolidated Statements of Operations](index=4&type=section&id=Consolidated%20Statements%20of%20Operations) Q1 2025 revenue decreased 10.7% year-over-year, resulting in a net loss of $2.3 million versus a prior-year net earning Q1 2025 vs. Q1 2024 Statement of Operations (in thousands, except per share data) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Revenue | $26,637 | $29,824 | | Gross Profit | $11,056 | $13,076 | | Operating (Loss) Income | $(2,881) | $492 | | Net (Loss) Earnings | $(2,329) | $662 | | Diluted (Loss) Earnings Per Share | $(0.19) | $0.05 | [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operations improved to $5.5 million in Q1 2025, driven by a significant decrease in accounts receivable Q1 2025 vs. Q1 2024 Cash Flow Summary (in thousands) | Cash Flow Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $5,535 | $2,075 | | Net cash used in investing activities | $(229) | $(19,244) | | Net cash used in financing activities | $(3,406) | $(874) | | **Net cash provided by (used in) all activities** | **$2,218** | **$(17,929)** | | **Cash and cash equivalents at end of period** | **$22,048** | **$27,331** | [Notes to Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Notes detail segment performance, the Alfamation acquisition, a restructuring plan, and a significant debt covenant breach - The company operates through three segments: Electronic Test, Environmental Technologies, and Process Technologies, with a strategic focus on diversifying away from the volatile semiconductor market into areas like auto/EV, defense/aerospace, and life sciences[21](index=21&type=chunk)[24](index=24&type=chunk)[25](index=25&type=chunk) - On March 12, 2024, the company acquired Alfamation S.p.A. for an aggregate purchase price of approximately **€20.0 million ($21.9 million)**, consisting of cash and stock[91](index=91&type=chunk)[94](index=94&type=chunk) - The company is in breach of its fixed charge coverage ratio covenant (**0.99 to 1.0 vs. required 1.25 to 1.0**) as of March 31, 2025, and anticipates non-compliance for Q2 2025[127](index=127&type=chunk)[189](index=189&type=chunk)[236](index=236&type=chunk) - In February 2025, a restructuring plan was initiated to consolidate Videology Imaging Corporation's Netherlands operations, resulting in **$313 thousand of restructuring charges** in Q1 2025[162](index=162&type=chunk)[163](index=163&type=chunk) Revenue by Segment (in thousands) | Segment | Q1 2025 Revenue | Q1 2024 Revenue | | :--- | :--- | :--- | | Electronic Test | $13,259 | $11,116 | | Environmental Technologies | $6,268 | $6,828 | | Process Technologies | $7,110 | $11,880 | | **Total** | **$26,637** | **$29,824** | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=50&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes the revenue decline to the semi market, discusses margin contraction, and highlights a debt covenant breach [Results of Operations](index=56&type=section&id=Results%20of%20Operations) Q1 2025 revenue fell 10.7% due to a semi market decline, while the Alfamation acquisition drove Electronic Test segment growth Revenue by Market (in thousands) | Market | Q1 2025 | Q1 2024 | Change $ | Change % | | :--- | :--- | :--- | :--- | :--- | | Semi | $8,995 | $14,967 | $(5,972) | (39.9)% | | Auto/EV | $5,959 | $3,958 | $2,001 | 50.6% | | Defense/aerospace | $2,828 | $3,239 | $(411) | (12.7)% | | Industrial | $3,021 | $4,187 | $(1,166) | (27.8)% | | Life Sciences | $1,688 | $653 | $1,035 | 158.5% | | **Total Revenue** | **$26,637** | **$29,824** | **$(3,187)** | **(10.7)%** | - Q1 2025 orders increased **11.2% year-over-year to $25.3 million**, driven by strength in industrial, auto/EV, and life science markets[199](index=199&type=chunk)[200](index=200&type=chunk) - Backlog of unfilled orders was **$38.2 million** at March 31, 2025, down from $55.5 million at March 31, 2024[202](index=202&type=chunk) - Gross margin decreased by **230 basis points to 41.5%** due to lower absorption of fixed costs on lower sales volumes and an unfavorable product mix[203](index=203&type=chunk) - Operating expenses increased, with Engineering and Product Development up **23.5%** and G&A up **7.4%**, primarily due to the Alfamation acquisition[206](index=206&type=chunk)[207](index=207&type=chunk) [Liquidity and Capital Resources](index=60&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains solid liquidity but breached a key debt covenant, for which it obtained a waiver but expects future non-compliance Liquidity Snapshot (in thousands) | Metric | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $22,048 | $19,830 | | Working capital | $43,594 | $46,864 | - The company was **not in compliance with its fixed charge coverage ratio covenant (0.99 to 1.0)** for Q1 2025 and received a one-time waiver[215](index=215&type=chunk) - As of March 31, 2025, **$12.0 million (55%) of cash and cash equivalents** was held by foreign subsidiaries[220](index=220&type=chunk) - Cash from operating activities increased to **$5.5 million** in Q1 2025 from $2.1 million in Q1 2024, driven by improved collections of accounts receivable[224](index=224&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=63&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This disclosure is not required as the company qualifies as a smaller reporting company - As a smaller reporting company, InTest Corporation is not required to provide this disclosure[229](index=229&type=chunk) [Item 4. Controls and Procedures](index=63&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of the quarter-end with no material changes - The CEO and CFO concluded that as of the end of the reporting period, the company's disclosure controls and procedures were **effective at the reasonable assurance level**[231](index=231&type=chunk) - No changes occurred during the quarter that materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[232](index=232&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=64&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently involved in any material legal proceedings - The company is **not currently a party to any material legal proceedings**[234](index=234&type=chunk) [Item 1A. Risk Factors](index=64&type=section&id=Item%201A.%20Risk%20Factors) Key risks include the impact of restrictive debt covenants and potential disruptions from U.S. and foreign trade policies - A key risk is the potential adverse impact of credit facility covenants, as the company was **not in compliance with its fixed charge coverage ratio** at March 31, 2025[235](index=235&type=chunk)[236](index=236&type=chunk) - U.S. tariff policies and global retaliatory measures pose a significant risk, as approximately **52% of Q1 2025 revenue was from shipments outside the United States**[237](index=237&type=chunk)[238](index=238&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=65&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company renewed its $10.0 million share repurchase plan but made no repurchases during the quarter - On March 5, 2025, the Board renewed the share repurchase plan, authorizing up to **$10.0 million in repurchases**, with about $9.0 million available[240](index=240&type=chunk) - **No shares were repurchased** under the plan in Q1 2025, though 646 shares were acquired from employees to satisfy tax liabilities on vested stock awards[240](index=240&type=chunk)[241](index=241&type=chunk) [Item 3. Defaults Upon Senior Securities](index=65&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities during the period - None[242](index=242&type=chunk) [Item 4. Mine Safety Disclosures](index=65&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section is not applicable to the company's operations - Not applicable[243](index=243&type=chunk) [Item 5. Other Information](index=66&type=section&id=Item%205.%20Other%20Information) No directors or officers adopted or terminated Rule 10b5-1 trading arrangements during the first quarter - No directors or officers adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement in Q1 2025[244](index=244&type=chunk) [Item 6. Exhibits](index=66&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including certifications and XBRL data files Signatures [Signatures](index=67&type=section&id=Signatures) The report was duly signed by the company's Principal Executive Officer and Principal Financial Officer - The report is signed by the Principal Executive Officer and Principal Financial Officer[249](index=249&type=chunk)

Financial Data and Key Metrics Changes - Revenue for Q1 2025 was $26.6 million, down $3.2 million compared to Q1 2024, primarily due to a $6 million reduction in semiconductor sales and a $1.2 million decline in the industrial market [7][22] - Gross profit for Q1 2025 was $11.1 million, a decrease of $2 million year-over-year, with a gross margin of 41.5%, tightening by 230 basis points compared to the prior year [22][23] - The net loss for the quarter was $2.3 million, or a loss of $0.19 per diluted share, while adjusted net loss was $1.4 million, or a loss of $0.11 per diluted share [25] Business Line Data and Key Metrics Changes - Sales to the auto EV sector increased by $2 million, life sciences by $1 million, and other markets by $1.3 million, partially offsetting declines in semiconductor and industrial sales [10][22] - Industrial orders grew 47% year-over-year to $4.6 million, driven by a significant order from a returning customer [18] - Semiconductor orders declined by $6 million, reflecting tempered demand in the electronic test division [19] Market Data and Key Metrics Changes - Backlog as of March 31 was $38.2 million, including $5.8 million from affirmation, down $17.2 million from the prior year [21] - Over half of the company's sales are associated with products made in the U.S. and sold to U.S. customers, or products sold to global customers from international sites not currently impacted by tariffs [15] Company Strategy and Development Direction - The company is focusing on market diversification, innovation, and investment in regional manufacturing facilities to navigate geopolitical tensions and trade policy volatility [31][33] - Plans to begin manufacturing in Malaysia during the second half of 2025 are on schedule, which is expected to enhance competitiveness and reduce costs [32][33] - The Vision 02/1930 growth strategy aims to increase the proportion of new products in total sales from 17% to 25% in the coming years [32] Management's Comments on Operating Environment and Future Outlook - Management noted that the first quarter was marked by shifting tariff policies and macroeconomic turmoil, creating a challenging environment for global companies [7][31] - The company remains optimistic about its customer pipeline, which is at an all-time high, and anticipates sequential improvement in top-line and profitability through the year [29][31] - Visibility into the timing of orders and shipments remains limited due to ongoing tariff uncertainties [28][29] Other Important Information - The company generated $5.5 million in cash from operations during the quarter and reduced total debt by $3.2 million [26][27] - Operating expenses for Q1 2025 were $13.9 million, up $1.3 million year-over-year, including restructuring costs and incremental expenses related to the acquisition of Alphamation [23][24] Q&A Session Summary Question: When did visibility get cloudier in the second half? - Management noted that customer slowdown in order bookings began mid-quarter, which affected guidance [36][37] Question: What are the potential swing factors for revenue? - Management identified semiconductor and auto sectors as the biggest potential swing factors, with a healthy pipeline for both industries [38][39] Question: What is the breakeven quarterly revenue level now? - Management indicated that the breakeven point is being adjusted downwards, with a typical range around $30 million [40][41] Question: Can you quantify the customer pipeline? - Management refrained from providing specific numbers but confirmed that the opportunity funnel is at a historic peak [53][54]