inTEST Corporation 17th Annual Midwest IDEAS Conference

Thank you. Welcome, everyone. Again, my name is Rich Rogoff. I am the CEO of inTEST. With me is Duncan Gilmour, our CFO, and we will take you through inTEST Corporation here for the next few minutes. First, I would be remiss if I did not tell you that we would be making some forward-looking statements in the normal safe harbor activities. While I am on this page, let me take a second to just introduce myself. I am new to the role of CEO. If you have heard over the last six months, not even six months now, five months, sorry. I took over as CEO April 1st. I have been with the company for quite some time, about five years or so. Duncan and I joined roughly at the same time, actually, so nothing new from that perspective.

I ran our corporate development group as well as several of our divisions over that time period in various forms. Beyond that, I have been in the semiconductor capital equipment industry, optics and photonics industry for 30-plus years. Looking forward to taking you through inTEST as we are today and where we look to go. I will skip that one. At the moment, inTEST, if you do not know us, we are an innovative test and measurement company, processing technology company, and our mission is really to be the partner of choice in that space for our customers. You will see later the large breadth of customers that we have. We have a list of several of them. There is many more than that. Our goal over the last five years or so has been to diversify the company. I think we have done a fairly good job at that.

We want to continue to do that while expanding on our markets that we currently serve. If you see today, we have fiscal year 2025 numbers and trailing 12-month numbers. We are about 30-odd, 35% in the semiconductor space, semiconductor test and measurement. We have spread out in our automotive and EV manufacturing space. We are about 25%. Industrials and defense and aero make up around 15% each, and then safety and security and life sciences from there. So pretty well-diversified, help us to try to manage some of the cyclical aspects of these businesses. All of these businesses or all of these markets require high engineered solutions, and that is our specialty. We tend to deliver to niche applications in those markets. So up-and-coming, newly invented, newly challenged markets of needing for test and measurement activities. We are divided into three divisions at the moment.

The electronic test, environmental technologies, and process technologies. If I start from left to right, our electronic test business is basically just that. We test electronics. We do everything from manipulators and docking stations, which is more around moving test heads and things versus testing them, to testing devices and full-up systems and things from simple boards to full-up battery management systems or things like that. Most of which are customized-type solutions, specific to the customer's needs, either configured or truly 100% customized. Our environmental technologies group is around heating and cooling. Here we do a multitude of products.

We have advanced chillers, testing things from very high-end switching chips used in advanced data centers and advanced chip manufacturing to forced air systems, testing regular devices and chips to thermal systems, testing everything from boards to full systems, depending on whether it's a system for a device or even things that are going into rugged environments like space or extreme heats and things like that. Our process technologies group is around that, process technologies. Induction heating is where we do things, everything from front-end semiconductor space, where we're helping to build and create silicon carbide wafers, epi layers, and things that go on silicon carbide, gallium nitride, indium phosphide, to that process controls everything from, in life sciences, things like stents, metal devices. Basically anything that has a metal content that you need to heat up, reshape, form, induction heating can do that.

Our Videology group, which does imaging, image capture, pattern recognition, IP calculations. All of our divisions are well-positioned in their markets, and they all have a variety of the growth drivers shown below. In this electronic test space, it's all about complexity and electronification of the materials and the business. The more complex the chips get, the more we're converting power from one level to another, the higher power that it gets to be. All of this drives the complexity and drives the technology growth of that business. Somewhat coupled to that as well is the precision temperature control. Again, if you're more complex, having more power, you have to manage that temperature around that power.

Our environmental technologies group is really centered around managing power, testing to the extremes, so that if you happen to have a deviation of a temperature, the chip doesn't fry and blow up. Right? That's clearly important. Also on the other part of that, expanding some of the platforms into some of the other areas to drive temperature, again, ruggedize things and the such. There we're also focusing on growing our market penetration into different industries and different areas. Our process technology, as I mentioned, silicon carbide, GaN, induction heating systems. Also throw in there is indium phosphide of late, where we're growing our epi layers. Again, it's a broad, diversified market that these products go into. Really capturing that market and growing when they grow is key for us.

Our target markets are pretty attractive, as I'm sure most of you are aware. Shown here on the top is where all our divisions play in each of our different markets, and you can see there's quite a bit of overlap in these markets and where our divisions play. Actually, one of the mandates that I have as a new CEO is to try to further penetrate those markets in a way, I'll call it cross-selling, but cross-businesses. How do we leverage one another inside of inTEST to continue to capture that market growth across these different markets and the different businesses? You can see the growth projections of each of these markets is pretty strong. Our customer base, as I mentioned earlier, this is just a sampling of some of the key customers. The logos are good. They're strong. They're growing. One common theme to most of these customers here is that they're all technology-driven.

Again, another aspect of what I'd like to see improved and continue to evolve in the company is more customer intimacy around those customers. We today get with their engineers, we design products for them, we design solutions for them. The more we can do with that, the more integration we can do amongst our own businesses, providing solutions for the end customer, the better we'll get, and continue to grow the customer base here as well. Some of the mega trends that we're involved with, I kind of mentioned a few of them along the way here, but just to clarify on them, electronification.

Anything around advanced automobiles, whether it's advanced EV systems or hybrid systems, or just the general automotive system, advanced driver-assistance systems, autonomous vehicles, industrial automation aspects, anything like that is just increasingly becoming electrified. As it becomes electrified, it's driving the need for test. You need to make sure that what you're doing, the products that you're shipping out are working and have a very low failure rate in the field. That requires more concise testing. That drives everything from our EMS business, where we're moving test heads around, to our AccuLogic business, where we're physically in-circuit testing or functional testing devices. Power management is another big tailwind that we're experiencing, and that is, as we said earlier, around SiC and GaN and around the devices that are involved in there, but also in the systems around it.

Battery management systems, power conversion systems, et cetera. Again, all require testing, are all complex in their systems and are driving our businesses. I've used the word complex several times, so it all sums up to complexity, actually. The more complex our systems are getting, used to be when I started out, a chip was one chip at a time, and you tested it, and now you have a heterogeneously integrated and packaged chip with 10 different chips and layers in it. Not layers in the sense of chip layers, but layers in the sense of board layers, right? That complexity is driving the need for further and more elaborate testing. We're seeing today where we're even getting requests for not just testing it, but testing it under thermal load.

We are integrating things between our thermal business and our electronic test business to try to solve some of those problems. That complexity is going to continue, and as it continues, it is providing us some strong wins to ride along with. Today, inTEST is a global manufacturer. We do quite a bit of our manufacturing here in North America, Canada, New York, New Jersey, Massachusetts. We have a plant through acquisition of our Alfamation business in Italy, and we have a joint facility in Malaysia that we are using for all of our businesses locally, for engineering and manufacturing. Basically, we are leveraging our supply in Italy and Milan and the business we have there to capitalize even further on our business in Europe and continue to grow it. We have not decided yet, but we are exploring where the next growth opportunity is.

I will tell you that my take on it will be where the customers are. We are not going to develop something in some far-off land somewhere, but if a strong concentration is in one place, we will build in the region for the region, and it will be from a cost-effective and customer support type of perspective. Some key new products that are helping drive some of this growth I am mentioning is, for example, in our electronic test area, we have recently introduced an oscilloscope probe system. I will call it an upgrade/option to our flying probe system. That in and of itself is showing some of the evolution of the flying probe system itself. When we acquired AccuLogic 3 or 4 years ago, maybe 4 or 5 years ago now, the flying probe system was just a system. It was a test system. It is becoming a test platform.