UNITED SATES
SECURITIES AND EXCHANGE COMMISSIONS
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
January 12, 2011
Date of Report (Date of earliest event reported)
inTEST Corporation
(Exact Name of Registrant as Specified in its Charter)
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Delaware |
0-22529 |
22-2370659 |
7 Esterbrook Lane, Cherry Hill, New Jersey 08003
(Address of Principal Executive Offices, including zip code)
(856) 505-8800
(Registrant's Telephone Number, including area code)
N/A
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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Written Communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act |
Item 7.01. Regulation FD Disclosure.
In connection with the previously announced presentation at the Needham Growth Conference, which will be held on January 13, 2011 at 4:10 p.m. EST, inTEST Corporation (the "Company") is posting on its website the slides that will be used in conjunction with this presentation. Such slides should be reviewed in conjunction with the webcast of the presentation. Information presented therein is current as of the date furnished. The Company does not undertake and has no obligation to update such information. A copy of the presentation is furnished as Exhibit 99.1 to this Current Report.
The information furnished pursuant to Item 7.01 of this Current Report, including Exhibit 99.1 hereto, shall not be considered "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of such section, nor shall it be incorporated by reference into future filings by the Company under the Securities Act of 1933, as amended or under the Securities Exchange Act of 1934, as amended, unless the Company expressly sets forth in such future filing that such information is to be considered "filed" or incorporated by reference therein.
Item 9.01. Financial Statements and Exhibits.
A list of the Exhibits which are required by Item 601 of Regulation S-K and filed with this Report is set forth in the Exhibit Index immediately following the signature page, which Exhibit Index is incorporated herein by reference.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
inTEST CORPORATION
By: /s/ Hugh T. Regan, Jr.
Hugh T. Regan, Jr.
Secretary, Treasurer and Chief Financial Officer
Date: January 12, 2011
Exhibit Index
99.1 Needham Growth Conference presentation.
EXHIBIT 99.1
SLIDE 1:
inTEST
13TH ANNUAL NEEDHAM GROWTH CONFERENCE
ROBERT E. MATTHIESSEN
PRESIDENT AND CEO
HUGH T. REGAN, JR.
CFO
JANUARY 13, 2011
SLIDE 2:
SAFE HARBOR STATEMENT
This presentation contains forward-looking statements within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934. These statements are based upon management's current expectations, and are subject to risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from the future results, performance or achievements expressed or implied by these forward-looking statements.
SLIDE 3:
inTEST - PROFITABLE NICHE POSITION
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Symbol |
INTT |
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SLIDE 4
COMPANY HIGHLIGHTS
- History of success with blue chip customers
- Increasing diversification into non-traditional markets: Automotive, Medical, Military/ Aerospace, Industrial and Telecommunications
- Lean operating structure / cost base provides high leverage
- Defensible intellectual property base provides competitive advantage and is a barrier to entry
- Healthy balance sheet to support growth
SLIDE 5
WHY TEST IS CRITICAL
- Defect Inspection
- Lower Manufacturing Costs; Improved Customer Yields
- Increased Customer Profit
PATENTS SUPPORT STRONG MARGINS
- 43 active U.S. patents
- 3 new patents awarded in 2010
- 16 U.S. patents pending
- Hold corresponding foreign patents
- Underscores strength of inTEST's technology
- Competitive advantage with defensible IP base
- Provides customers extra measure of confidence
SLIDE 7
INNOVATION - M & A & ORGANIC GROWTH
Investments in technology and successful acquisitions lead to new markets, revenue and margin expansion
1981 |
- |
inTEST Founded |
1997 |
- |
INTT IPO |
1998 |
- |
Test Design Electrical Products |
2000 |
- |
Temptronic Thermal Products |
2002 |
- |
Intelogic Tech Mechanical Products |
2008 |
- |
Diamond Integration Service, and |
2008 |
- |
Sigma Systems Thermal Products |
SLIDE 8
GROWTH OPPORTUNITIES
- Sigma Systems - Increased traction / market share in Asia and Europe
- Facilities relocation - Lower OpEx will save app. $0.05 EPS (annual)
- License certain Intellectual Property
- Organic growth of existing businesses
- Acquisition of additional technology / businesses
- Compatible Expertise / Mission Critical
- Increase Market Share
- Drive Margins
- Leveling of Business Curve - Mitigate Cycle Vagaries
- Accretive
SLIDE 9
NON-SEMI: M & A, TRENDS DRIVE DIVERSIFICATION
- Acquisition of Sigma Systems further diversified Thermal Division into non-semiconductor markets
- Major non-semiconductor customers now in Automotive, Medical, Military/Aerospace, Industrial and Telecommunications
- Benefiting from manufacturers' requirements to verify operation of products at set temperatures
- Production solutions often require customization in order to maximize manufacturing efficiencies
- Electronic Sensors now proliferate many industries and applications. Their small size is suited for testing by inTEST's ThermoStreams and Thermal Platforms
- inTEST leads the domestic microwave thermal testing market, with a significant opportunity for Thermal Platforms in Asia and Europe
SLIDE 10
inTEST SERVED MARKETS
Number 1 or 2 in Each Target Segment 15% - 50% Market Share*
- Semiconductor manufacturers - End Users
- Production Floor / Test Facilities / Laboratories
- ATE equipment suppliers - OEM
- Penetrating new markets: Automotive, Aerospace, Medical and Telecommunications
* These estimates represent management's best estimate of inTEST's market share based upon management's knowledge of the industry, given that no reliable information of market size exists.
SLIDE 11
SEMICONDUCTOR MARKET
- 2010 - Semiconductor market rebounded from global economic downturn.
- 2010 - INTT three strong profitable quarters. Most companies saw a brief pause in December quarter to digest channel inventory levels.
- Consensus view - Overall improving economy. New applications (smart-phones, cloud computing and mobile applications) will drive higher demand levels in 2011.
- Diversification - inTEST expects to benefit from incremental demand in non-traditional semiconductor segments, including automotive and military sectors.
SLIDE 12
inTEST MARKET SEGMENTS
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% of Revenue |
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2009 |
2010E |
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Mechanical |
42% |
46% |
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Electrical |
10% |
18% |
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Thermal |
48% |
36% |
SLIDE 13
MECHANICAL PRODUCTS SEGMENT
Manipulator - 15% estimated market share*
Docking Hardware - 50% estimated market share*
* These estimates represent management's best estimate of inTEST's market share based upon management's knowledge of the industry, given that no reliable information of market size exists.
SLIDE 14
ELECTRICAL PRODUCTS SEGMENT
35% estimated market share*
* These estimates represent management's best estimate of inTEST's market share based upon management's knowledge of the industry, given that no reliable information of market size exists.
SLIDE 15
THERMAL PRODUCTS SEGMENT
Semiconductor Test Market
ThermoStreams & ThermoChucks
40% estimated market share*
* These estimates represent management's best estimate of inTEST's market share based upon management's knowledge of the industry, given that no reliable information of market size exists.
SLIDE 16
THERMAL PRODUCTS SEGMENT
Electronic Test Market - $170 million*
Chambers, Thermal Platforms, Mobile Temp
6% estimated market share*
* Estimated 2008 market based on Frost & Sullivan's Environmental Test Market Report.
SLIDE 17
TYPICAL IC TESTING SYSTEM
Picture of: [picture omitted]
Positioner (Manipulator)
Test Head
Docking Hardware (Test Head)
Interface Board
Test Socket (Handler)
Prober Interface
Docking Hardware (Handler)
Test Site
Handler/Prober
SLIDE 18
CUSTOMER BASE
Top 10 Customers contribute 50% of Total Sales
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SLIDE 19
END USER CUSTOMER BASE
Texas Instruments
Intersil
NXP
Sony
Analog Devices
ST
Delphi
Finisar
Intel
National Semiconductor
STATSChipPAC
IBM
Cypress
Xilinx
Freescale Semiconductor
LSI
NEC
Philips
SLIDE 20
OEM CUSTOMER BASE
LTX Corporation
Teradyne
Verigy
Tokyo Electron
Accretech
Credence
Agilent Technologies
Cascade Microtech
COHU, Inc.
SLIDE 21
FINANCIAL OVERVIEW
SLIDE 22
OPERATING MODEL
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2004 |
2005 |
2006 |
2007 |
2008 |
2009 |
YTD 2010 |
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Gross Margin |
41% |
37% |
42% |
39% |
36% |
33% |
48% |
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SG&A |
28% |
31% |
27% |
34% |
41% |
42% |
25% |
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Eng & Prod Dev |
9% |
12% |
10% |
11% |
13% |
10% |
6% |
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Operating Margin |
2% |
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6% |
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- |
- |
17% |
SLIDE 23
Q3 2010 RESULTS
- Net revenues of $11.3 million
- $15.3 million in 2Q10 and $6.0 million in 3Q09
- Net income of $1.7 million, or $0.17 per share
- 2Q10 net income of $3.2 million or $0.31 per share
- 3Q09 net loss of $(278,000), or $(0.03) per share
- Bookings of $9.8 million
- $12.2 million in 2Q10 and $7.9 million in 3Q09
- Cash & cash equivalents increased to $6.2 million at 9/30/10
- $3.1 million at 6/30/10
- 1st nine months 2010: Revenue of $36.1 million and net income of $0.59 per share
- Revenue of $15.1 million and net loss of $(0.50) in 1st nine months of 2009
- Materially higher results for 2010 1st nine months compared with year ago period, despite recent sequential decline in bookings and revenue
SLIDE 24
STRONG GROSS MARGIN
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Gross Margin Drivers |
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Improved Competitive Landscape |
Consolidate Manufacturing |
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Product Mix |
Manufacturing Outsourcing |
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New Products |
Operational Efficiencies |
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Q1 2010 |
47.6% |
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Q2 2010 |
48.3% |
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Q3 2010 |
48.2% |
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Q4E 2010 |
43% to 47% |
SLIDE 25
FURTHER STRENGTHENED BALANCE SHEET
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9/30/10 |
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Cash & Cash Equivalents |
$ 6.2 |
M |
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Working Capital |
$12.3 |
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Total Assets |
$21.5 |
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Long-Term Debt* |
$ 1.5 |
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Shareholder Equity |
$14.8 |
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Expect cash and cash equivalents to further increase by approximately $3.0 million in 4Q10 before the impact of principal payments on the $1.5 million in notes payable related to the Sigma Systems acquisition in 2008.
* Notes fully retired December 1, 2010
SLIDE 26
REVISED 4Q10 GUIDANCE (JANUARY 10, 2011)
- Net revenue now expected to be app. $10 million
- Revision from net revenue guidance in the range of $8.8 million to $9.5 million (November 3, 2010)
- Bookings now expected to be app. $11.5 million, which exceeds Q310 bookings of $9.4 million.
- Pre-tax income now expected to be in the range of $0.08 to $0.10 per diluted share
- Pre-tax income guidance is based upon current expectations and may be subject to change due to audit adjustment
SLIDE 27
inTEST - ENTERPRISE VALUATION
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Stock |
Market |
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2011 EPS* |
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INTT |
$2.45 |
25.6M |
3.25 |
$0.76 |
21M |
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AEHR |
$1.25 |
10.5M |
- |
- |
6M |
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ATRM |
$2.20 |
23.5M |
- |
- |
17M |
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COHU |
$16.92 |
404.1M |
12.2 |
$1.39 |
290M |
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CSCD |
$4.10 |
59.3M |
22.8 |
$0.18 |
40M |
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FORM |
$8.95 |
452M |
- |
($1.16) |
74M |
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KLIC |
$7.26 |
513M |
5.9 |
$1.24 |
446M |
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LTXC |
$7.47 |
369M |
6.2 |
$1.21 |
266M |
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RTEC |
$8.51 |
267M |
8.7 |
$0.98 |
179M |
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VRGY |
$13.07 |
785M |
13.5 |
$0.97 |
489M |
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ACLS |
$3.48 |
365M |
14.5 |
$0.24 |
319M |
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FSII |
$4.38 |
169M |
7.6 |
$0.58 |
151M |
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MTSN |
$3.09 |
153M |
13.4 |
$0.23 |
112M |
As of 12/30/2010
* First Call Consensus Estimates
SLIDE 28
POSITIONED FOR GROWTH
- Generating Profits & Cash / No Debt
- Test Solutions Driving Higher Profits
- Strong Intellectual Property Portfolio
- Thermal Technology Diversification
- Broad Customer Base
- Lean Operating Structure
- Operational Efficiencies Driving Higher Gross Margin
- Consolidation in ATE (fewer companies to invest in)