inTest Corporation

Greetings, and welcome to the Intest Corporation fourth quarter and full year 2021 financial results call. At this time, all participants are in a listen-only mode. The question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the call over to Deborah Perlowski of Investor Relations. Thank you. You may begin.

Thanks, and good morning, everyone. We certainly appreciate your time today. Joining me for Intest's fourth quarter and full year 2021 financial results conference call are Nick Grant, our president and CEO, and Duncan Gilmore, our chief financial officer and treasurer. You should have a copy of the fourth quarter 2021 financial results, which we released this morning before the markets opened. If not, you can access the release, as well as the slides that will accompany our conversation today, at our website, www.intest.com. After our formal presentation, we will be opening the line for Q&A. If you'll turn to slide two in the deck, I will first review the Safe Harbor Statement. You should be aware that we may make some forward-looking statements during the formal discussions as well as during the Q&A session. These statements apply to future events that are subject to risks and uncertainties, as well as other factors that could cause actual results to differ materially from what is stated here today. These risks and uncertainties and other factors are provided in the earnings release as well as with other documents filed with Securities and Exchange Commission. These documents can be found on our website or at sec.gov. During today's call, we will also discuss some non-GAAP financial measures. We believe these will be useful in evaluating our performance. You should not consider the presentation of this additional information in isolation or as a substitute for results prepared in accordance with GAAP. We have provided reconciliation of non-GAAP measures with comparable GAAP measures in the tables that accompany today's release and in the slides. With that, if you will turn to slide three, I will turn it over to Nick to begin. Nick?

Thank you, Deb, and good morning, everyone. Thanks for joining us this morning for our earnings report. Before we begin, I would like to acknowledge the world events that are occurring and extend our thoughts and prayers for everyone that has been impacted by this conflict. We ended 2021 strong with continued solid execution on our five-point strategy. I'm pleased with our progress around driving growth, diversifying our markets and customer base, and ensuring we have the right talent to achieve our goals. I want to thank the entire Intest organization for their dedication and outstanding performance throughout a challenging but transformational year for the company. We had exceptional revenue growth of 50%, to $22.4 million in our fourth quarter compared with the prior year period. For the year, revenue finished up nearly 60% to $85 million, which is the highest this company has achieved in over two decades. While quarter to quarter there can be variances within our target markets, we believe that our very strong results for the quarter and the year validate our diversification and growth strategies. We have instituted more discipline and accountability around sales, marketing, and customer relationships. We also are adding the resources needed and investing in additional MarCom activities to effectively drive greater awareness of our offerings. Our efforts to go deeper into accounts and widen our customer base are paying off. For the quarter and the year, we had robust demand for our precision technologies, with particular strength in both front end and back end of the semiconductor industry. Our strategy is enabling us to capture greater market share as we strengthen our customer relationships, develop new products, and reignite relationships with former customers. We also are strengthening our position in the very front end of the semiconductor manufacturing process with our induction heating technology, which is used for crystal growth processes. We believe that our diversification efforts around targeted growth markets are working well. This is demonstrated by the strong sales of our leading test and process solutions to the automotive industry, including electric vehicles. In fact, we saw our bookings more than triple and sales more than double in the automotive electric vehicle industry in 2021. Our diversification efforts were enhanced by the three acquisitions which added $1.5 million in revenue in the quarter, primarily in security and life sciences. There were a few factors that impacted gross margin, some of which we expect to see improve. We, of course, are not immune to the supply chain constraints and inflationary pressures everyone is facing. While these challenges are currently not improving, we do expect some relief as pricing actions begin to flow through along with anticipated supply chain improvements in the latter half of the year. The change in product mix was another reason for the margin contraction. This was mostly due to the significant volume earlier in the year we had for back-end semi-cap equipment, specifically custom manipulators, docking systems, and test interfaces. That moderated as industry investments shifted focus towards front-end fab expansions. Our custom engineered solutions in this backend space generally tend to command our highest margins. Duncan will talk further regarding our margins and the atypical cost impacting the quarter. We made some tremendous progress expanding our portfolio of solutions with the three acquisitions in the quarter that further diversifies our offerings and expands our solutions to better serve our target markets. On the third quarter call, we discussed the October acquisitions of Zsciences and Videology Imaging Solutions. In December, we acquired Acceologic Inc. and its affiliates. If you'll turn to slide four, this provides a brief overview of Acceologic and their automated test equipment. Acceologic provides differentiated flying probe know-how and solutions to the electronic circuit test markets. of specific interest to us is the early position the company has gained in electric vehicle battery testing applications. These products expand our portfolio of solutions for electric vehicle OEMs and battery manufacturers. With the addition of this differentiated automated test equipment, we are creating an electronic test platform that goes beyond the semiconductor market with deeper penetration in automotive, defense, aerospace, and life science markets. With that, Let me turn it over to Duncan to review the financials in more detail. Duncan, over to you.