InTest Corporation (INTT) Earnings Call Transcript & Summary

Hello, and welcome to the inTEST Corporation Annual Meeting of Stockholders. [Operator Instructions] It is now my pleasure to turn today's meeting over to James Pelrin, President and CEO of inTEST Corporation. Mr. Pelrin, the floor is yours.

Good morning. I'm James Pelrin, President and Chief Executive Officer of the company, and I will act as chairman of this meeting. I welcome all of you to inTEST's 2020 virtual annual meeting, and thank you for your interest in inTEST. We appreciate your understanding of the change from the meeting in Mount Laurel, New Jersey to this virtual format. We hope you and your families are safe and healthy at this time. I will now call the meeting to order. With me today is Hugh Regan, Jr., Chief Financial Officer, Treasurer and Secretary of the company. I would also like to introduce our current directors and director nominee of the company who are at this virtual meeting today as well: Steven J. Abrams, Esq., Jeffrey A. Beck; Joseph W. Dews IV; and Gerald J. Maginnis, our new director nominee. We are also joined at this virtual meeting by our independent auditors, RSM US LLP, who are here to answer questions you may have. As presented on the agenda that you can find on the right side of your screen in the web portal for the meeting, we will start with the formal business as set forth in the proxy statement. Then Hugh Regan, Jr. will present a brief summary of our financial results. Finally, we'll be happy to answer any questions you may have, subject to the rules of conduct that you can access on the left-hand side of your screen. Let us now proceed with the formal business of the meeting, namely, one, to elect the 5 directors of the company who will serve until the next annual meeting of stockholders and until their successors are duly elected and qualified; two, to ratify the selection of RSM US LLP as our independent registered accounting firm for the year ending December 31, 2020; and three, to approve the compensation of our named executive officers. Mr. Hugh Regan, Jr., Secretary, Treasurer and Chief Financial Officer of the company, will now report on the giving of notice of the meeting, the availability of the list of stockholders and the presence of a quorum.

Mr. Chairman, I report that the notice of annual meeting of stockholders dated April 29, 2020, stating the time, place and purpose of this meeting, was duly mailed to all stockholders of record on or before May 20, 2020, together with a copy of the proxy statement dated April 29, 2020, prepared by management of the company for solicitation of proxies for use at this meeting and management's formal proxy and the notice of change in location of our annual meeting to this virtual meeting format and our announcement of such change through our press release issued on June 5, 2020, were both filed with the Securities and Exchange Commission on June 5, 2020, in compliance with both the SEC's guidance and the Delaware Governor's order with respect to notice of meetings during the COVID-19 pandemic. A complete list of stockholders as of the close of business on April 27, 2020, has been available for inspection by the stockholders for 10 days prior to this meeting and continues to be available to the stockholders during this meeting by accessing the link listed on the left-hand side of the screen. There are issued and outstanding 10,416,983 shares of common stock entitled to vote at this meeting. I have been informed by the inspector of the election that the holders of more than a majority of the shares of common stock outstanding and entitled to vote at this meeting are present or represented by proxy. Therefore, we have a quorum for transaction of business at this meeting.

The secretary is directed to file a copy of the notice of annual meeting of stockholders, the notice of change in location of the annual meeting of stockholders, the proxy statement and the form of proxy in the company's minute book. Susan Dawson has been asked to serve as inspector of the election. She has taken an oath which will be filed with the minutes of this meeting. The polls are now open for the election of directors, ratification of our independent registered public accounting firm and approval of the compensation of our named executive officers. Any stockholder who has not yet voted or wishes to change their vote may do so by clicking on the voting button on the web portal and following the instructions there. Stockholders who have sent in proxies or voted via telephone or Internet and do not want to change their vote, do not need to take any further action. The inspector will tabulate votes on each matter while we continue the meeting, and she will submit the results of voting at the end of the meeting. The meeting will now proceed to the election of directors. The nominees are: Steven J. Abrams, Jeffrey A. Beck, Joseph W. Dews IV, Gerald J. Maginnis and James Pelrin. If you have any questions or comments regarding this proposal, please submit such questions or comments through the web portal at this time. As a reminder, any stockholder who has not yet voted or wishes to change their vote may do so by clicking on the voting button on the web portal and following the instructions there. Stockholders who have sent in proxies or voted via telephone or Internet and do not wish to change their vote, do not need to take any further action. The next order of business is the ratification of the company's independent registered public accounting firm selected by the Audit Committee of the Board of Directors to examine the company's accounts for the year ending December 31, 2020. The Audit Committee has selected RSM US LLP. Are there any questions which any stockholder would like to address to management or to the representatives of RSM US LLP who are present at the meeting in relation to their appointment as independent registered public accountants? The final order of business is the approval of compensation of our named executive officers. Are there any questions on the foregoing proposal? You may again submit your questions through the web portal. As a reminder, any stockholder who has not yet voted or wishes to change their vote may do so by clicking on the voting button on the web portal and following the instructions there. Stockholders who have sent in proxies or voted via telephone or Internet and do not want to change their vote, do not need to take any further action.

No questions, Jim.

The polls are now closed with respect to the election of directors, the approval of the independent registered public accounting firm and the approval of the compensation of our named executive officers. At this time, I would like to ask Hugh Regan to provide you with a brief financial summary.

Good morning, everyone. 2019 was a challenging year for the company with semi softness, which reduced the company's revenues from 70 -- just under $79 million in 2018 to just over $60 million in 2019. As a result of that softness, the company had reduced profitability. Pretax earnings were $2.6 million, approximately half of what they were the year before. And net earnings after tax were $2.3 million. The company's balance sheet was strong during the year and remained unleveraged. Cash at the end of December was $7.6 million. The company has been responding to COVID and continues to operate effectively during the pandemic, and we will be providing further financial summaries as we release our second quarter results on July 31. The last thing I would like to say today is to thank William Kraut, our retiring director, for his years of service to inTEST Corporation. Bill has been an inspiration to all of us here at the company, and we will miss his warm smile and joyous wit that he always brought into our boardroom on a daily basis. We wish you all the best, Bill. At this point, I'd like to return the call back to Jim Pelrin.

Thank you, Hugh. Will the inspector of election, please make her report?

Okay. Of the total number of shares outstanding and entitled to vote, 8,150,530 shares were voted by proxy or in person. On the election of directors of the company, the results are as follows: Steven J. Abrams, for 4,748,022 shares, withheld 1,375,621 shares, nonvotes of 2,026,887 shares; Jeffrey A. Beck for 5,484,416 shares, withheld 639,227 shares and nonvotes of 2,026,887 shares; Joseph W. Dews, for 5,399,110 shares, withheld 724,533 shares and broker nonvotes of 2,026,887 shares; for Gerald Maginnis, for 5,463,078 shares, withheld 660,565 shares and nonvotes of 2,026,887 shares; for James Pelrin, 5,338,532 shares withheld 785,111 shares, broker nonvotes of 2,026,887. On the ratification of the selection of RSM US LLP, for 7,659,215 shares, against 434,668 shares and abstentions of 56,647. And on the final, advisory basis compensation of our named executive officers, for votes were 4,861,465 -- 4,861,475 shares, excuse me, against 573,573 shares, abstentions of 688,595 and broker nonvotes of 2,026,887. That's it.

Thank you, Susan. The tally of votes has been completed. The inspector of elections has presented her report, which will be filed with the records of the company.

The report shows that 10,416,980 shares of common stock entitled to -- oh, that not supposed to be read, okay. We will now adjourn the meeting. Thank you for your interest and support. Operator, the meeting has now ended.

This concludes the meeting. You may now disconnect.