Business Context and Reporting Period
Company: InTest Corporation (INTT)
Filing Type: Form 10-Q (Quarterly Report)
Period Ended: June 30, 2026
Business Overview: InTest is a global supplier of test and process technology solutions for semiconductor, Auto/EV, Defense/Aerospace, Industrial, Life Sciences, and Safety/Security markets. The company operates through three segments: Electronic Test, Environmental Technologies, and Process Technologies.
Key Financial Metrics
| Metric (in thousands) | Q2 2026 | Q2 2025 | YTD 6mo 2026 | YTD 6mo 2025 |
|---|---|---|---|---|
| Revenue | $35,313 | $28,130 | $69,199 | $54,767 |
| Gross Profit | $14,298 | $11,973 | $28,956 | $23,029 |
| Gross Margin | 40.5% | 42.6% | 41.8% | 42.0% |
| Operating Income | $363 | $(927) | $567 | $(3,808) |
| Net Earnings | $474 | $(503) | $657 | $(2,832) |
| Diluted EPS | $0.04 | $(0.04) | $0.05 | $(0.23) |
| Cash & Equivalents | $22,102 | $19,248 | $22,102 | $19,248 |
| Working Capital | $47,768 | $42,883 | $47,768 | $42,883 |
| Total Debt (Current + Long-term) | $6,243 | $7,468 | $6,243 | $7,468 |
Note: Debt figures include current portion of long-term debt ($5,348) and long-term debt net of current portion ($895) as of June 30, 2026.
Material Changes vs. Prior Period
- Revenue Growth: Revenue increased 25.5% year-over-year (Q2) and 26.4% year-over-year (YTD). Growth was driven primarily by the Auto/EV market (up 129.3% in Q2) and Defense/Aerospace, partially offset by a decline in the Semiconductor (Semi) market.
- Profitability Turnaround: The company returned to profitability, reporting net earnings of $474k for Q2 2026 compared to a net loss of $503k in Q2 2025. Operating income improved from a loss of $927k to a profit of $363k.
- Restructuring Costs: Restructuring costs decreased significantly to $30k in Q2 2026 from $216k in Q2 2025. YTD 2026 costs were $774k, primarily driven by CEO transition costs incurred in Q1.
- Inventory Management: Inventory levels decreased to $27.9 million from $31.6 million at year-end 2025, reflecting improved working capital management.
- Accounting Revision: The company revised previously issued Q1 2026 financial statements due to an error at the Alfamation subsidiary involving the overstatement of inventory and understatement of cost of revenue. The correction reduced Q1 net earnings by $606k.
Guidance, Outlook, Risks, and Unusual Items
- Management Commentary: Management highlights successful diversification away from the cyclical Semi market, with Auto/EV now representing 38.1% of Q2 revenue. The company is executing its "VISION 2030 Strategy" to reduce dependence on any single market.
- CEO Transition: Richard N. Grant, Jr. stepped down as CEO on March 31, 2026. Richard Rogoff is the new President and CEO. Significant severance and professional fees were incurred in Q1 related to this transition.
- Internal Control Material Weakness: The company identified a material weakness in internal controls over financial reporting related to inventory processes at Alfamation. This led to the Q1 restatement. Management is implementing remediation, including quarterly physical inventory counts.
- Supply Chain Risks: The company faces risks from geopolitical conflicts (Israel/Iran, Russia/Ukraine) affecting sole-source suppliers in Israel and Belarus. While safety stock and new suppliers have been qualified, there is uncertainty regarding future supply continuity and OFAC license renewals for Belarusian parts.
- Debt Covenants: The company was previously under a waiver for its fixed charge coverage ratio covenant. The waiver expired, and as of June 30, 2026, the company is in compliance with all covenants. The ability to draw on the Term Note was extended to August 28, 2026.
- Tax Benefit: A discrete tax benefit was recognized in Q2 due to a large volume of stock option exercises, resulting in a negative effective tax rate for the quarter.
Investor Verification Checklist
- Restatement Impact: Verify the full extent of the Q1 2026 restatement and confirm that the revised Q1 numbers are accurately reflected in the YTD 2026 totals.
- Internal Control Remediation: Monitor the progress of remediation efforts for the material weakness in inventory controls to ensure future financial reporting reliability.
- Supply Chain Continuity: Assess the status of the OFAC license extension for the Belarusian supplier and the operational stability of the Israeli capacitor supplier amidst regional conflict.
- Customer Concentration: Note that one customer ("Customer A") accounted for 24% of Q2 revenue; monitor the stability of this relationship.
- Debt Maturity: Review the repayment schedule for the remaining Term Note and Alfamation debt, noting the maturity of the Term Note remainder in 2026.