InTEST : 2022 Q2 Presentation

inTEST Corporation

Q2 2022 Financial Results Conference Call

Nick Grant,

President and

CEO

Duncan Gilmour,

CFO

August 4, 2022

Forward-Looking Statements

This presentation includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. These statements do not convey historical information but relate to predicted or potential future events and financial results, such as statements of the Company's plans, strategies and intentions, or our future performance or goals, that are based upon management's current expectations. These forward-looking statements can often be identified by the use of forward-looking terminology such as "believes," "expects," "intends," "may," "will," "should," "plans," "projects," "forecasts," "outlook," "anticipates," "targets," "estimates," or similar terminology. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements. Such risks and uncertainties include, but are not limited to, any mentioned in this presentation as well as the Company's ability to execute on its 5-Point Strategy, realize the potential benefits of acquisitions and successfully integrate any acquired operations, grow the Company's presence in the life sciences, security, industrial and international markets, manage supply chain challenges, convert backlog to sales and to ship product in a timely manner; the success of the Company's strategy to diversify its markets; the impact of inflation on the Company's business and financial condition; the impact of the COVID-19 pandemic on the Company's business, liquidity, financial condition and results of operations; indications of a change in the market cycles in the semi market or other markets served; changes in business conditions and general economic conditions both domestically and globally; changes in the demand for semiconductors; the ability to borrow funds or raise capital to finance potential acquisitions or for working capital; changes in the rates and timing of capital expenditures by the Company's customers; and other risk factors set forth from time to time in the Company's Securities and Exchange Commission filings, including, but not limited to, the Annual Report on Form 10-K for the year ended December 31, 2021. Any forward-looking statement made by the Company in this presentation is based only on information currently available to management and speaks to circumstances only as of the date on which it is made. The Company undertakes no obligation to update the information in this presentation to reflect events or circumstances after the date hereof or to reflect the occurrence of anticipated or unanticipated events.

Non-GAAP Financial Measures and Forward-LookingNon-GAAP Financial Measures

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

This presentation also contains forward-looking statements regarding non-GAAP adjusted EBITDA and adjusted EBITDA margin. The Company is unable to present a quantitative reconciliation of these forward-lookingnon-GAAP financial measures to their most directly comparable forward-looking GAAP financial measures because such information is not available, and management cannot reliably predict the necessary components of such GAAP measures without unreasonable effort or expense. In addition, the Company believes that such reconciliations would imply a degree of precision that would be confusing or misleading to investors. These non-GAAP financial measures are preliminary estimates and are subject to risks and uncertainties, including, among others, changes in connection with quarter-end and year-end adjustments. Any variation between the Company's actual results and preliminary financial data set forth above may be material.

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Demonstrating Success of 5-Point Strategy

• Execution of strategy delivered better than expected results
• 36% y/y revenue growth included 12% organic expansion
• • Delivered record revenue of $29.6 million with strength across markets
  • Organic growth of $2.6 million driven by automotive/EV and industrials
  • Acquisitions contributed $5.2 million in revenue
• Record orders reflect strong demand across markets
• • Sequential and y/y order growth over 60%; 40% organic growth sequentially
  • Strength in semi, auto, life sciences, defense, and other end-markets more than offset slight decline in industrial
  • Growing customer base through disciplined execution of plan
• Contributions from acquired businesses are improving

5-Point Strategy

Global &	Innovation &
Market
Differentiation
Expansion

Strategic	Service &
Acquisitions
&	Support
Partnerships
	Talent &
	Culture

• Strengthening sales processes, integrating business systems, leveraging sales synergies and implementing operating improvements

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Revenue

($ in millions)

$29.6

$24.1

$21.8 $21.1 $22.4

Q2 21

Q3 21

Q4 21

Q1 22

Q2 22

Semi	3%
4%	11%
Industrial
Auto/EV	5%
Defense/Aero		Q2 2022

	Life Sciences	12%	55%
	Security		10%
	Other

• Q2 record revenue up $7.8 million, or 36%
• • Three Q4 2021 acquisitions added $5.2 million
  • 12% organic growth y/y
  • 23% sequential growth
• Strong improvement across markets
• • Solid demand in front-end semi, automotive, especially EV, and industrials drove organic growth
  • • Organic revenue growth supported by new products as well as geographic and customer expansion
  • Acquisitions contributed revenue from security, defense, auto/EV and life sciences markets
  • Semi front-end shipments more than offset back-end decline
  • • Induction heating solutions serving front-end semi silicon carbide crystal growth, relatively new space for organization

Note: comparisons are year/year unless otherwise noted.

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Gross Profit and Margin

($ in millions)

Quarters

$13.5

$11.0 $10.4 $10.3 $11.0

50.2%				49.2%			46.3%			45.7%		45.8%
	Q2 21	44.7%	45.2%	48.7%	50.2%	Q2 22
				Q3 21	Q4 21	Q1 22

➢ Q2 gross profit increased $2.5 million

▪ Margin contraction vs. prior-year period result of less

favorable product mix

• Prior-year period benefitted from significant volume in

legacy back-end semi test solutions

▪ Margin also impacted by supply chain constraints

and inflation

➢ Sequential margin stabilizing

Years/TTM

$41.2

$29.2

$24.1

$45.3

▪ Improving efficiencies and pricing coming more in

line with supply chain challenges and inflationary

impacts

➢ Expect to see improvement in 2H 2022

▪ Higher volume and operational efficiencies expected

to drive margin expansion

48.2%	44.8%	48.6%	46.6%
2019	48.1% 2020	44.7%2021		TTM Q2 2022

▪ Contributions from acquisitions expected to continue

to improve

Note: comparisons are year/year unless otherwise noted.

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