intt20220331

intt20220331_10q.htm

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

FORM 10-Q

(Mark One)

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

For the quarterly period ended March 31, 2022 or

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

For the transition period from to

Commission File Number 1-36117

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

Delaware
(State or other jurisdiction of incorporation or organization)

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

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

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

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

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

Trading Symbol

INTT

Name of Each Exchange on Which Registered
NYSE American

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

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

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

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

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

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

Number of shares of Common Stock, $0.01 par value, outstanding as of the close of business on May 2, 2022: 11,005,180

inTEST CORPORATION

TABLE OF CONTENTS

		Page
PART I.	FINANCIAL INFORMATION

*Item 1.*	*Financial Statements*

	Consolidated Balance Sheets as of March 31, 2022 (Unaudited) and December 31, 2021	1
	Unaudited Consolidated Statements of Operations for the three months ended March 31, 2022 and 2021	2
	Unaudited Consolidated Statements of Comprehensive Earnings for the three months ended March 31, 2022 and 2021	3
	Unaudited Consolidated Statements of Stockholders' Equity for the three months ended March 31, 2022 and 2021	4
	Unaudited Consolidated Statements of Cash Flows for the three months ended March 31, 2022 and 2021	5
	Notes to Consolidated Financial Statements	6

*Item 2.*	*Management's Discussion and Analysis of Financial Condition and Results of Operations*	24

*Item 3.*	*Quantitative and Qualitative Disclosures About Market Risk*	31

*Item 4.*	*Controls and Procedures*	31

PART II.	OTHER INFORMATION

*Item 1.*	*Legal Proceedings*	32

*Item 1A.*	*Risk Factors*	32

*Item 2.*	*Unregistered Sales of Equity Securities and Use of Proceeds*	32

*Item 3.*	*Defaults Upon Senior Securities*	32

*Item 4.*	*Mine Safety Disclosures*	32

*Item 5.*	*Other Information*	32

*Item 6.*	*Exhibits*	33

*SIGNATURES*		34

PART I. FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS

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

	March 31,			December 31,
	2022			2021
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	17,211		$	21,195
Trade accounts receivable, net of allowance for doubtful accounts of $212 and $213, respectively		17,292			16,536
Inventories		14,913			12,863
Prepaid expenses and other current assets		1,853			1,483
Total current assets		51,269			52,077
Property and equipment:
Machinery and equipment		5,801			5,733
Leasehold improvements		3,193			3,001
Gross property and equipment		8,994			8,734
Less: accumulated depreciation		(6,190	)		(6,046	)
Net property and equipment		2,804			2,688
Right-of-use assets, net		5,657			5,919
Goodwill		21,863			21,448
Intangible assets, net		20,905			21,634
Restricted certificates of deposit		100			100
Other assets		336			39
Total assets	$	102,934		$	103,905

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of Term Note	$	4,100		$	4,100
Current portion of operating lease liabilities		1,444			1,371
Accounts payable		5,896			4,281
Accrued wages and benefits		2,898			4,080
Accrued professional fees		527			1,048
Customer deposits and deferred revenue		5,425			6,038
Accrued sales commissions		842			863
Domestic and foreign income taxes payable		1,625			2,024
Other current liabilities		1,390			1,267
Total current liabilities		24,147			25,072
Operating lease liabilities, net of current portion		4,876			5,248
Term Note, net of current portion		15,117			16,000
Deferred tax liabilities		941			1,379
Contingent consideration		1,369			930
Other liabilities		483			453
Total liabilities		46,933			49,082

Commitments and Contingencies

Stockholders' equity:
Preferred stock, $0.01 par value; 5,000,000 shares authorized; no shares issued or outstanding		-			-
Common stock, $0.01 par value; 20,000,000 shares authorized; 10,995,194 and 10,910,460 shares issued, respectively		110			109
Additional paid-in capital		30,358			29,931
Retained earnings		24,970			24,393
Accumulated other comprehensive earnings		767			594
Treasury stock, at cost; 33,077 shares		(204	)		(204	)
Total stockholders' equity		56,001			54,823
Total liabilities and stockholders' equity	$	102,934		$	103,905

See accompanying Notes to Consolidated Financial Statements.

-1-

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

(Unaudited)

	Three Months Ended March 31,
	2022			2021

Revenue	$	24,081		$	19,556
Cost of revenue		13,068			10,035
Gross profit		11,013			9,521

Operating expenses:
Selling expense		3,456			2,403
Engineering and product development expense		1,924			1,322
General and administrative expense		4,831			3,161
Restructuring and other charges		-			55
Total operating expenses		10,211			6,941

Operating income		802			2,580
Other expense		(147	)		(2	)

Earnings before income tax expense		655			2,578
Income tax expense		78			366

Net earnings	$	577		$	2,212

Earnings per common share – basic	$	0.05		$	0.21

Weighted average common shares outstanding – basic		10,617,271			10,329,449

Earnings per common share – diluted	$	0.05		$	0.21

Weighted average common shares and common share equivalents outstanding – diluted		10,842,592			10,525,826

See accompanying Notes to Consolidated Financial Statements.

-2-

inTEST CORPORATION
CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS
(In thousands)

(Unaudited)

	Three Months Ended March 31,
	2022			2021

Net earnings	$	577		$	2,212

Unrealized gain on interest rate swap agreement		289			-
Foreign currency translation adjustments		(116	)		(101	)

Comprehensive earnings	$	750		$	2,111

See accompanying Notes to Consolidated Financial Statements

-3-

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

(Unaudited)

	Three Months Ended March 31, 2022

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

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

Net earnings		-		-		-		577		-		-			577
Other comprehensive earnings		-		-		-		-		173		-			173
Amortization of deferred compensation related to stock-based awards		-		-		372		-		-

SEC Form 10-Q filed by inTest Corporation