inTest Corporation

Greetings and welcome to the InTest Corporation second quarter 2026 financial results conference call. At this time, all participants are in a listen-only mode. A question and answer will follow the formal presentation. If anyone should require operator assistance, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce Sanjay Hari, Investor Relations. Please go ahead.

Good morning, everyone, and thank you for joining us. With me on the call are Rich Rogoff, President and Chief Executive Officer, and Duncan Gilmour, Chief Financial Officer and Treasurer. The earnings press release was issued this morning, as well as the slides that management will use during today's call. Both can be found in the investor relations section of the intest.com website. Please turn to slide two for a review of the Safe Harbor Statement. During this call, management may make some forward-looking statements about their current plans, beliefs, and expectations. These statements apply to future events that are subject to risks, uncertainties, and other factors that could cause actual results to differ materially from what is stated here today. These risks, uncertainties, and other factors are provided in the earnings release as well as in other documents filed by the company with the Securities and Exchange Commission. These documents can be found on the InTest website or at sec.gov. Also, as covered in slide three, management will refer to some non-GAAP financial measures. We believe these will be useful in evaluating the company's performance. However, you should not consider the presentation of this additional information in isolation. or as a substitute for results prepared in accordance with GAAP. You can find reconciliations of non-GAAP measures with comparable GAAP measures in the tables that accompany today's release and slides. Before management begins today's discussion on slide four of the presentation, please note that certain first quarter 2026 comparisons in their prepared remarks reflect InTest's revised Q1 results. As the company announced on July 31, management revised Q1 cost of revenues, gross profit, gross margin, income tax expense, net earnings, and earnings per share together with their related non-GAAP measures. Q1 revenue and operating expenses were not affected by the revision. Q1 2026 financials provided as part of this presentation have been revised accordingly. With that, I would now like to turn the call over to our first speaker, Rich Rogoff, President and CEO. Please go ahead, Rich.

Thank you, Sanjay. Good morning, everyone, and thank you for joining us. On today's call, I will start with an overview of our second quarter performance, and Duncan will walk you through the Q2 financial results, after which I will discuss end market dynamics that support our raised revenue guidance for the year. and then open the call to Q&A. We are reporting Q2 results that are in line with our pre-announcement, with revenue of $35 million, gross margin of approximately 41% and operating expenses of $13.9 million. Demand across in-test divisions remained healthy in Q2, with revenue up approximately 26% year over year, Q2 also marks our third consecutive quarter of sequential revenue growth and our second consecutive quarter of year-over-year growth above 25%. The strength we saw was broad, led by strong project delivery in auto EV and a semiconductor funnel that continued to build towards the second half. The diversity we have built continues to broaden our revenue base, which gives us confidence and our raised full year top line guidance. As disclosed in our pre-announcement on July 31st, our second quarter margin reflected an unfavorable mix of high revenue, low margin projects at AlphaMation alongside a shortfall of higher contribution revenue that shifted to the third quarter. Turning to orders and backlog on slide five, Q2 orders were $28.9 million, down 9% sequentially, following three consecutive quarters above $30 million, and up 4% year-over-year. Semi was a standout. Orders here increased 56% sequentially, our strongest semi-order intake in six quarters, and grew 64% year-over-year. The semi-wave that we referenced in our Q1 call is now converting into orders. In auto EV, orders declined 67% sequentially after four quarters of strong order flow. Funnel activity in this end market remains healthy. In defense aerospace, orders declined 28% sequentially, reflecting non-reoccurring orders that drove strong Q1 orders and increased 70% year-over-year on higher DoD procurement. Turning to backlog at quarter end, backlog was $45.4 million, a sequential decrease of 12%, reflecting normalization off an elevated peak in auto EV projects. This also represents a year-over-year increase of 20%. Approximately 45% of the backlog is expected to ship beyond the third quarter. With that, I will turn it over to Duncan to take you through the financial detail beginning on slide six. Duncan?