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What changed in INTEST CORP's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of INTEST CORP's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+310 added−352 removedSource: 10-K (2025-03-13) vs 10-K (2024-03-27)

Top changes in INTEST CORP's 2024 10-K

310 paragraphs added · 352 removed · 218 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

125 edited+46 added−17 removed36 unchanged
Biggest change($ in 000s) Years Ended Change 12/31/2023 12/31/2022 $ % Revenue Semi $ 65,735 53.3 % $ 68,422 58.6 % $ (2,687 ) -3.9 % Industrial 14,310 11.6 % 10,038 8.6 % 4,272 42.6 % Automotive/EV 9,895 8.0 % 10,776 9.2 % (881 ) -8.2 % Life Sciences 4,856 3.9 % 4,589 3.9 % 267 5.8 % Defense/Aerospace 12,537 10.2 % 7,006 6.0 % 5,531 78.9 % Security 3,688 3.0 % 3,241 2.8 % 447 13.8 % Other 12,281 10.0 % 12,756 10.9 % (475 ) -3.7 % $ 123,302 100.0 % $ 116,828 100.0 % $ 6,474 5.5 % 5 During 2023 our consolidated revenue grew $6.5 million or 6%.
Biggest change(in thousands except percentages) Years Ended December 31, Change 2024 2023 $ % Revenue Semi $ 48,708 37.3 % $ 65,735 53.3 % $ (17,027 ) -25.9 % Industrial 13,382 10.2 % 14,310 11.6 % (928 ) -6.5 % Automotive/EV 32,871 25.2 % 9,895 8.0 % 22,976 232.2 % Life Sciences 5,400 4.1 % 4,856 3.9 % 544 11.2 % Defense/Aerospace 15,317 11.7 % 12,537 10.2 % 2,780 22.2 % Security 2,946 2.3 % 3,688 3.0 % (742 ) -20.1 % Other 12,066 9.2 % 12,281 10.0 % (215 ) -1.8 % $ 130,690 100.0 % $ 123,302 100.0 % $ 7,388 6.0 % During 2024 our total consolidated revenue grew $7.4 million or 6% year over year.
In early 2021, we launched our 5-Point Strategy, our new corporate vision and our mission statement. Our vision is to be the supplier of choice for innovative test and process technology solutions. Our mission is to leverage our deep industry knowledge and expertise to develop and deliver high quality, innovative customer solutions and superior support for complex global challenges.
STRATEGY In early 2021, we launched our 5-Point Strategy, our new corporate vision and our mission statement. Our vision is to be the supplier of choice for innovative test and process technology solutions. Our mission is to leverage our deep industry knowledge and expertise to develop and deliver high quality, innovative customer solutions and superior support for complex global challenges.
Customers use our induction heating products in conjunction with other technologies in various manufacturing environments to improve production efficiencies and reduce or eliminate greenhouse gas emissions. Applications for our EKOHEAT(R) or EASYHEAT™ induction heating products include annealing, bonding, brazing, curing, forging, heat treating, melting, shrink-fitting, crystal growing, semi-wafer heating and material testing. Digital Streaming and Image Capturing Solutions.
Customers use our induction heating products in conjunction with other technologies in various manufacturing environments to improve production efficiencies and reduce or eliminate greenhouse gas emissions. Applications for our EKOHEAT® or EASYHEAT™ induction heating products include annealing, bonding, brazing, curing, forging, heat treating, melting, shrink-fitting, crystal growing, semi-wafer heating and material testing. Digital Streaming and Image Capturing Solutions.
As technology advances and ICs become increasingly more complex, we believe the need for increased capabilities in the test process should drive greater demand for our equipment. We expect that more front-end testing is going to be required in order to ensure maximum yield from the massive capital investments being made in fab expansion.
As technology advances and ICs become increasingly more complex, we believe the need for increased capabilities in the test process should drive greater demand for our equipment. We expect that more front-end testing is going to be required to ensure maximum yield from the massive capital investments being made in fab expansion.
We design solutions to overcome the evolving challenges facing the semi market and other markets that we serve, which we believe provide the following advantages: Temperature-Controlled Testing . Our ThermoStream(R) products are used by manufacturers in a number of markets to stress test a variety of semiconductor and electronic components, printed circuit boards and sub-assemblies.
We design solutions to overcome the evolving challenges facing the semi market and other markets that we serve, which we believe provide the following advantages: Temperature-Controlled Testing . Our ThermoStream® products are used by manufacturers in a number of markets to stress test a variety of semiconductor and electronic components, printed circuit boards and sub-assemblies.
We believe this integrated approach to ATE facilitates smooth changeover from one tester to another, longer lives for interface components, better test results, increased ATE utilization and lower overall test costs. Robotics-Based Electronic Production Test Equipment. Acculogic adds to our electronic test platform offerings beyond those which exclusively serve the semi market.
We believe this integrated approach to ATE facilitates smooth changeover from one tester to another, longer lives for interface components, better test results, increased ATE utilization and lower overall test costs. 8 Robotics-Based Electronic Production Test Equipment. Acculogic adds to our electronic test platform offerings beyond those which exclusively serve the semi market.
(Massachusetts, New Jersey and New York), Canada, Germany and the Netherlands. We assemble most of our products from a combination of standard components and custom parts that have been fabricated to our specifications by either third-party manufacturers or our own facilities. Our practice is to use high quality raw materials and components in our products.
(New York, Massachusetts and New Jersey), Italy, Canada, Germany and the Netherlands. We assemble most of our products from a combination of standard components and custom parts that have been fabricated to our specifications by either third-party manufacturers or our own facilities. Our practice is to use high quality raw materials and components in our products.
We are a global supplier of innovative test and process technology solutions for use in manufacturing and testing across a wide range of markets including automotive, defense/aerospace, industrial, life sciences, security and semiconductors (“semi”). We have three operating segments which are also our reportable segments and reporting units: Electronic Test, Environmental Technologies and Process Technologies.
We are a global supplier of innovative test and process technology solutions for use in manufacturing and testing across a wide range of markets including semiconductors, industrial, automotive, life sciences, defense/aerospace, and security. We have three operating segments which are also our reportable segments and reporting units: Electronic Test, Environmental Technologies and Process Technologies.
Environmental Technologies Products ThermoStream(R) Products : Our ThermoStream(R) products are used in the semi market as a stand-alone temperature management tool, or in a variety of electronic test applications as part of our MobileTemp systems. ThermoStream(R) products provide a source of heated and cooled air that can be directed over the component or device under test.
Environmental Technologies Products ThermoStream ® Products : Our ThermoStream® products are used in the semi market as a stand-alone temperature management tool, or in a variety of electronic test applications as part of our MobileTemp systems. ThermoStream® products provide a source of heated and cooled air that can be directed over the component or device under test.
We generate a significant portion of our sales leads through our website as well as through trade show attendance where we display our products and technology. 11 We also provide induction heating product support through our SmartCARE Service offering, which includes equipment repairs and training, preventative maintenance, enhanced warranties and spare parts.
We generate a significant portion of our sales leads through our website as well as through trade show attendance where we display our products and technology. We also provide induction heating product support through our SmartCARE™ Service offering, which includes equipment repairs and training, preventative maintenance, enhanced warranties and spare parts.
These systems are capable of controlling temperatures to within +/- 0.1 degree Celsius over a range of -100 degrees Celsius to as high as +300 degrees Celsius within 1.0 degree Celsius of accuracy. As a stand-alone tool, ThermoStreams(R) provide a temperature-controlled air stream to rapidly change and stabilize the temperature of packaged ICs and other devices.
These systems are capable of controlling temperatures to within +/- 0.1 degree Celsius over a range of -100 degrees Celsius to as high as +300 degrees Celsius within 1.0 degree Celsius of accuracy. As a stand-alone tool, ThermoStreams® provide a temperature-controlled air stream to rapidly change and stabilize the temperature of packaged ICs and other devices.
Process Technologies Products : We market our EASYHEAT™ and EKOHEAT(R) precision induction heating equipment to manufacturers who require specialized industrial heating in a wide array of industries, including automotive, aerospace and semiconductor, and are sold globally through a combination of regional sales managers and independent distributors.
Process Technologies Products : We market our EASYHEAT™ and EKOHEAT® precision induction heating equipment to manufacturers who require specialized industrial heating in a wide array of industries, including automotive, aerospace and semiconductor, and are sold globally through a combination of regional sales managers and independent distributors.
During front-end testing, there is a growing trend of thermally conditioning the wafer. Once the good ICs have been identified, they are packaged. The packaged ICs also require testing, called "back-end test" or "final test," to determine if they meet design and performance specifications.
During front-end testing, there is a growing trend of thermally conditioning the wafer. Once the good ICs have been identified, they are packaged. The packaged ICs also require testing, called “ back-end test ” or “ final test ,” to determine if they meet design and performance specifications.
Packaged ICs are tested after loading into another type of electronic handling device called a "package handler" or "handler," which then transfers the packaged ICs into a test socket that is attached to the test head. These handlers may be temperature controlled for testing.
Packaged ICs are tested after loading into another type of electronic handling device called a “ package handler ” or “ handler ,” which then transfers the packaged ICs into a test socket that is attached to the test head. These handlers may be temperature controlled for testing.
North American sales representatives also coordinate product installation and support with our technical staff and participate in trade shows. Our internal sales account managers handle sales to ATE manufacturers and are responsible for a portfolio of customer accounts and for managing certain independent sales representatives.
North American sales representatives also coordinate product installation and support with our technical staff and participate in trade shows. 12 Our internal sales account managers handle sales to ATE manufacturers and are responsible for a portfolio of customer accounts and for managing certain independent sales representatives.
For example, our Centaur(R) modular interface is designed to provide flexibility and scalability through the use of replaceable signal modules which can be easily changed on the test floor as our customers' testing requirements change.
For example, our Centaur® modular interface is designed to provide flexibility and scalability through the use of replaceable signal modules which can be easily changed on the test floor as our customers’ testing requirements change.
Our MobileTemp Series combines our ThermoStream(R) products with our family of exclusive, high-speed ThermoChambers to offer thermal test systems with fast, uniform temperature control in a compact package enabling temperature testing at the test location.
Our MobileTemp Series combines our ThermoStream® products with our family of exclusive, high-speed ThermoChambers to offer thermal test systems with fast, uniform temperature control in a compact package enabling temperature testing at the test location.
We believe that because we do not compete with ATE manufacturers in the sale of probers, handlers or testers, ATE manufacturers are willing to provide us with the information that is integral to the design of plug-compatible products. Our docking hardware products generally range in price from approximately $2,000 to $25,000. Interface Products .
We believe that because we do not compete with ATE manufacturers in the sale of probers, handlers or testers, ATE manufacturers are willing to provide us with the information that is integral to the design of plug-compatible products. Our docking hardware products generally range in price from approximately $2 thousand to $25 thousand. Interface Products .
The loss of any one or more of our largest customers, or a reduction in orders by a major customer, could materially reduce our revenue or otherwise materially affect our business, financial condition or results of operations. MANUFACTURING AND SUPPLY At December 31, 2023, our principal manufacturing operations consisted of assembly and testing at our facilities in in the U.S.
The loss of any one or more of our largest customers, or a reduction in orders by a major customer, could materially reduce our revenue or otherwise materially affect our business, financial condition or results of operations. MANUFACTURING AND SUPPLY At December 31, 2024, our principal manufacturing operations consisted of assembly and testing at our facilities in in the U.S.
Our universal test head manipulators provide a high degree of positioning flexibility with a minimum amount of effort. As a result, our products can be used in virtually any test setting. Our manipulator products are designed to accommodate the increased size of test heads and can now supporting test heads weighing up to 1200kg.
Our universal test head manipulators provide a high degree of positioning flexibility with a minimum amount of effort. As a result, our products can be used in virtually any test setting. Our manipulator products are designed to accommodate the increased size of test heads and can now support test heads weighing up to 1200kg.
Our products provide highly engineered, high quality and cost-effective test and process technology solutions which are delivered with a customer focus that are intended to drive a high level of customer satisfaction. Our strategy is to consistently develop unique and differentiated solutions through innovative new product development and acquisitions.
Our products provide highly engineered, high quality and cost-effective test and process technology solutions which are delivered with a customer focus that are intended to drive a high level of customer satisfaction. Our strategy is to consistently expand our unique and differentiated test and process technology solutions through innovative new product development and acquisitions.
This testing step has several names, including "front-end test," "wafer test," "wafer probe" or "wafer sort." In front-end testing, an electronic handling device known as a wafer prober automatically positions the wafer under a probe card that is electronically connected to a "test head," which connects electrically to a test system.
This testing step has several names, including “ front-end test ,” “ wafer test ,” “ wafer probe ” or “ wafer sort .” In front-end testing, an electronic handling device known as a wafer prober automatically positions the wafer under a probe card that is electronically connected to a “test head,” which connects electrically to a test system.
ADDITIONAL INFORMATION Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, and amendments to these reports that are filed with the SEC pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (“Exchange Act”), are available free of charge through our website (www.intest.com) as soon as reasonably practicable after we electronically file them with, or furnish them to, the SEC.
ADDITIONAL INFORMATION Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, and amendments to these reports that are filed with the SEC pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (“ Exchange Act ”), are available free of charge through our website ( www.intest.com ) as soon as reasonably practicable after we electronically file them with, or furnish them to, the SEC.
This design permits a test head weighing up to 1,760 pounds to be held in an effectively weightless state, so it can be moved manually or with optional powered assistance, up or down, right or left, forward or backward and rotated around each axis (known as six degrees of motion freedom) by an operator using a modest amount of force or with a computer controlled pendant.
This design permits a test head weighing up to 1,200kg to be held in an effectively weightless state, so it can be moved manually or with optional powered assistance, up or down, right or left, forward or backward and rotated around each axis (known as six degrees of motion freedom) by an operator using a modest amount of force or with a computer controlled pendant.
Chambers can be designed to utilize liquid nitrogen or liquid carbon dioxide cooling or mechanical refrigeration, and sometimes both. These chambers can accommodate large thermal masses and are found in both laboratory and production environments. Chambers are generally priced from $18,000 to $150,000.
Chambers can be designed to utilize liquid nitrogen or liquid carbon dioxide cooling or mechanical refrigeration, and sometimes both. These chambers can accommodate large thermal masses and are found in both laboratory and production environments. Chambers are generally priced from $18 thousand to $150 thousand.
In addition to testing of the basic circuitry of a PCBA, our Acculogic solutions can integrate various functional testing capabilities such as boundary scan and RF measurement to confirm that the device will perform the functions for which it is designed. Acculogic’s Scorpion Flying Probe system can be quickly programmed to test almost any printed circuit board.
In addition to testing of the basic circuitry of a PCBA, our Acculogic solutions can integrate various functional testing capabilities such as boundary scan and radio frequency measurement to confirm that the device will perform the functions for which it is designed. Acculogic’s Scorpion Flying Probe system can be quickly programmed to test almost any printed circuit board.
MobileTemp Systems are designed specifically for small thermal-mass applications beyond the semi market and have found application in the automotive, electronic, fiber optic and oil field service markets testing such things as electronic sub-assemblies, sensor assemblies, and printed circuit boards. Traditionally, our customers use ThermoStream(R) products primarily in engineering, quality assurance and small-run manufacturing environments.
MobileTemp Systems are designed specifically for small thermal-mass applications beyond the semi market and have found applications in the automotive, electronic, fiber optic and oil field service markets testing such things as electronic sub-assemblies, sensor assemblies, and printed circuit boards. 11 Traditionally, our customers use ThermoStream® products primarily in engineering, quality assurance and small-run manufacturing environments.
Our customers use our products principally in production testing or process/manufacturing applications, although our ThermoStream(R) products traditionally have been used largely in engineering development and quality assurance. We believe that we sell to most of the major semiconductor manufacturers in the world. During the year ended December 31, 2023, one customer accounted for 13% of our consolidated revenue.
Our customers use our products principally in production testing or process/manufacturing applications, although our ThermoStream® products traditionally have been used largely in engineering development and quality assurance. We believe that we sell to most of the major semiconductor manufacturers in the world. 13 During the year ended December 31, 2024, one customer accounted for 13% of our consolidated revenue.
Acculogic designs and manufactures robotics-based electronic test equipment and provides application support services for OEMs, contract electronic manufacturers and battery manufacturers. These systems are used to structurally test an electronic device including printed circuit board assembly (“PCBA”) and battery interconnect test. Structural testing provides confirmation that the device was manufactured properly by confirming circuits are functioning properly.
Acculogic designs and manufactures robotics-based electronic test equipment and provides application support services for OEMs, contract electronic manufacturers and battery manufacturers. These systems are used to structurally test an electronic device including printed circuit board assembly (“ PCBA ”) and battery interconnect test. Structural testing provides confirmation that the device was manufactured properly by confirming circuits are functioning properly.
ThermoStream(R) and MobileTemp products generally range in price from approximately $15,000 to $55,000. Thermal Chambers: Our thermal chamber products are available in a variety of sizes, from small bench-top units to chambers with internal volumes of twenty-seven cubic feet and greater and with temperature ranges as wide as from -190 degrees Celsius to +500 degrees Celsius.
ThermoStream® and MobileTemp products generally range in price from approximately $15 thousand to $55 thousand. Thermal Chambers: Our thermal chamber products are available in a variety of sizes, from small bench-top units to chambers with internal volumes of twenty-seven cubic feet and greater and with temperature ranges as wide as from -190 degrees Celsius to +500 degrees Celsius.
Testers range in price from approximately $100,000 to over $2.0 million each, depending primarily on the complexity of the IC to be tested. Probers and handlers range in price from approximately $50,000 to $500,000 each.
Testers range in price from approximately $100 thousand to over $2.0 million each, depending primarily on the complexity of the IC to be tested. Probers and handlers range in price from approximately $50 thousand to $500 thousand each.
We believe the semi market, an historically highly cyclical industry, will experience increased growth in the overall size of the market over the next several years as a result of billions of dollars of investments in new fabrication (“fab”) facilities around the world.
We believe the semi market, an historically highly cyclical industry, will experience increased growth in the overall size of the market over the next several years as a result of billions of dollars of investments in new fabrication (“ fab ”) facilities around the world.
In addition to the Centaur(R) modular interface, we also offer over 200 different types of tester interface models that we custom designed for our customers' specific applications. These tester interface products generally range in price from approximately $7,000 to $175,000. Acculogic Scorpion Flying Probe Test Systems.
In addition to the Centaur® modular interface, we also offer over 200 different types of tester interface models that we custom designed for our customers’ specific applications. These tester interface products generally range in price from approximately $7 thousand to $175 thousand. 10 Acculogic Scorpion Flying Probe Test Systems.
Our principal competitors for Thermostream(R) products are FTS Systems, a part of SP Industries, and MPI Corporation. Our principal competitors for environmental chambers are Cincinnati Sub-Zero Products, Inc., Espec Corp. and Thermotron Industries. Our principal competitor for thermal platforms is Environmental Stress Systems Inc.
Our principal competitors for ThermoStream® products are FTS Systems, a part of ATS Corporation, and MPI Corporation. Our principal competitors for environmental chambers are Cincinnati Sub-Zero Products, Inc., Espec Corp. and Thermotron Industries. Our principal competitor for thermal platforms is Environmental Stress Systems Inc.
We believe our docking hardware products offer our customers the ability to make various competing brands of test heads compatible with various brands of probers and handlers by only changing interface boards. This is called "plug-compatibility." Plug-compatibility enables increased flexibility and utilization of test heads, probers and handlers purchased from various ATE manufacturers.
We believe our docking hardware products offer our customers the ability to make various competing brands of test heads compatible with various brands of probers and handlers by only changing interface boards (“ plug-compatibility ”). Plug-compatibility enables increased flexibility and utilization of test heads, probers and handlers purchased from various ATE manufacturers.
Our field service engineers, located in the U.S. and Europe, provide service and support globally. Additionally, a number of distributors in Europe and Asia have factory-trained service technicians. We market our Videology industrial camera solutions to OEMs and end users both directly and through distributors. We have both manufacturing and service capabilities in the U.S. and the Netherlands.
Our field service engineers, located in the U.S. and Europe, provide service and support globally. Additionally, several distributors in Europe and Asia have factory-trained service technicians. We market our Videology® industrial camera solutions to OEMs and end users both directly and through distributors. We have both manufacturing and service capabilities in the U.S. and the Netherlands.
Process Technologies Products EKOHEAT(R) Products: Our EKOHEAT(R) induction heating systems with power ratings from 10kW to 1 MW are manufactured by Ambrell and are used to conduct fast, efficient, repeatable non-contact heating of metals or other electrically conductive materials in order to transform raw materials into finished parts. Prices generally range from $25,000 to $250,000.
Process Technologies Products EKOHEAT ® Products: Our EKOHEAT® induction heating systems with power ratings from 10kW to 1 MW are manufactured by Ambrell® and are used to conduct fast, efficient, repeatable non-contact heating of metals or other electrically conductive materials in order to transform raw materials into finished parts. Prices generally range from $30 thousand to $250 thousand.
As a result, after testing a particular production lot of ICs, the operator can quickly and easily disconnect a test head that is held in an in2(R) or Cobal Series manipulator and equipped with our docking hardware and dock it to another electronic device handler for testing either a subsequent lot of the same packaged ICs or to test different ICs.
As a result, after testing a particular production lot of ICs, the operator can quickly and easily disconnect a test head that is held in an inTEST manipulator and equipped with our docking hardware and dock it to another electronic device handler for testing either a subsequent lot of the same packaged ICs or to test different ICs.
We are committed to becoming recognized as a leader in our markets for design and manufacturing capabilities that help solve our customers’ most complex challenges in their manufacturing and quality processes.
We are committed to becoming recognized as a leader in our targeted markets for engineering and manufacturing capabilities that help solve our customers’ most complex challenges in their manufacturing and quality processes.
In 2023, we created the inTEST leadership academy which is another tool for identifying and developing talent from within, connecting emerging leaders across our organization and promoting collaboration and teamwork.
In 2023, we began our inTEST leadership academy which is another tool for identifying and developing talent from within, connecting emerging leaders across our organization and promoting collaboration and teamwork.
With the LS Series manipulators, the undocking, movement of the test head and redocking can be done automatically through the computer controlled pendant. Our manipulator products generally range in price from approximately $12,000 to $100,000. Docking Hardware Products . We offer two lines of docking hardware products: fixed manual docking and IntelliDock pin and cup docking.
With the LS Series manipulators, the undocking, movement of the test head and redocking can be done automatically through the computer-controlled pendant. Our manipulator products generally range in price from approximately $12 thousand to $100 thousand. Docking Hardware Products . We offer three lines of docking hardware products: fixed manual docking, AERODOCK™ and INTELLIDOCK™ pin and cup docking.
Thermal platforms can be designed to utilize either liquid nitrogen or liquid carbon dioxide cooling or mechanical refrigeration. Platforms offer virtually unimpeded access to the device under test and their easy access and compact size makes them ideal for convenient bench-top use. Platforms are generally priced from $6,500 to $65,000.
Thermal platforms can be designed to utilize either liquid nitrogen or liquid carbon dioxide cooling or mechanical refrigeration. Platforms offer virtually unimpeded access to the device under test and their easy access and compact size makes them ideal for convenient bench-top use. Platforms are generally priced from $7 thousand to $65 thousand.
Both types of docking hardware products eliminate motion of the test head relative to the prober or handler once docked. This minimizes deterioration of the interface boards, test sockets and probing assemblies that is caused by constant vibration during testing.
All of our docking hardware products eliminate motion of the test head relative to the prober or handler once docked. This minimizes deterioration of the interface boards, test sockets and probing assemblies that is caused by constant vibration during testing.
Our docking hardware products are used primarily with floating-head universal manipulators when maximum mobility and inter-changeability of handlers and probers between test heads is required.
Our docking hardware products are used primarily with floating-head universal manipulators when maximum mobility and interchangeability of handlers and probers between test heads is required.
Technical support is provided by our staff in the U.K. In China, Japan, the Philippines, South Korea, and Thailand, we sell through the use of independent sales representatives who are supervised by our internal sales staff. In Malaysia, Singapore and Taiwan, our sales are handled by our internal sales staff.
Technical support is provided by our staff in the U.K. In China, Japan, the Philippines, South Korea, and Thailand, we sell using independent sales representatives who are supervised by our internal sales staff. In Malaysia, Singapore and Taiwan, our sales are handled by our internal sales staff.
In connection with the acquisition, we have entered into a lease agreement (the “Lease Agreement”) with the former owner of Alfamation. The Lease Agreement will last for six years starting on March 12, 2024 and will be automatically renewed for the same period of time unless terminated by either party.
In connection with the acquisition, we have entered into a lease agreement (the “ Lease Agreement ”) with the former owner of Alfamation™. The Lease Agreement commenced on March 12, 2024, will last for six years and will be automatically renewed for the same period of time unless terminated by either party.
In addition, all employees and third-party product development consultants agree not to disclose any private or confidential information relating to our technology, trade secrets or intellectual property. At December 31, 2023, we held 30 active U.S. patents and had no pending U.S. patent applications covering various aspects of our technology.
In addition, all employees and third-party product development consultants agree not to disclose any private or confidential information relating to our technology, trade secrets or intellectual property. At December 31, 2024, we held 21 active U.S. patents and had one pending U.S. patent applications covering various aspects of our technology.
Our principal competitors for docking hardware products include Advantest Corporation, Esmo AG, Reid-Ashman Manufacturing and Teradyne, Inc. Our principal competitors for tester interface products are Advantest Corporation, Esmo AG, Reid-Ashman Manufacturing and Teradyne, Inc. Our principal competitors for Acculogic products are Digitaltest GmbH, Seica S.P.A., SPEC S.P.A., and Takaya Corporation.
Our principal competitors for manipulator products, docking hardware products and tester interface products are Advantest Corporation, Esmo AG, Reid-Ashman Manufacturing Inc. and Teradyne, Inc. Our principal competitors for Acculogic products are Digitaltest GmbH, Seica S.p.A., SPEA S.p.A., and Takaya Corporation.
EASYHEAT ™ Products: Our compact EASYHEAT™ induction heating systems with power ratings from 0.5kW to 10kW are manufactured by Ambrell and used to conduct fast, efficient, repeatable non-contact heating of metals or other electrically conductive materials in order to transform raw materials into finished parts.
EASYHEAT ™ Products: Our compact EASYHEAT™ induction heating systems with power ratings from 0.5kW to 10kW are manufactured by Ambrell® and used to conduct fast, efficient, repeatable non-contact heating of metals or other electrically conductive materials in order to transform raw materials into finished parts. Prices generally range from $10 thousand to $25 thousand.
These systems generally sell for between $250,000 and $800,000. 9 Acculogic BRiZ Automated Test and Programming Services : BRiZ is an automated test platform that can consolidate any variety of circuit board test and programming into a single, compact, low-cost test station. These platforms generally sell for between $50,000 and $250,000.
Acculogic BRiZ Automated Test and Programming Services : BRiZ is an automated test platform that can consolidate any variety of circuit board test and programming into a single, compact, low-cost test station. These platforms generally sell for between $50 thousand and $250 thousand.
OUR SOLUTIONS We focus our development efforts on designing and producing high quality products that provide superior performance and cost-effectiveness. We seek to address each manufacturer's individual needs through innovative and customized designs, use of the best materials available, quality manufacturing practices and personalized service.
OUR SOLUTIONS We focus our development efforts on designing and producing high quality products and highly-engineered solutions that deliver superior performance and cost-effectiveness for our customers. We seek to address each manufacturer’s individual needs through innovative and customized designs, use of the best materials available, quality manufacturing practices and personalized service.
Ultra-Cold Storage Solutions: Our high-performance biomedical freezers, refrigerators and mobile storage solutions meet versatile applications, including ultra-cold storage solutions for biological sample banks, blood safety, vaccine safety, medical supplies and reagent safety. Prices generally range from $1,500 to $20,000.
Ultra-Cold Storage Solutions: Our high-performance biomedical freezers, refrigerators and mobile storage solutions meet versatile applications, including ultra-cold storage solutions for biological sample banks, blood safety, vaccine safety, medical supplies and reagent safety. Prices generally range from $2 thousand to $20 thousand.
Thermonics(R) Products: Our Thermonics temperature conditioning products, which include our process chillers, provide tempered gas or fluid to enable customers to maintain desired thermal conditions within their tool or process. Applications include general industrial, chemical processing, energy, electronics, automotive, defense/aerospace and semiconductor markets. Prices generally range from $25,000 to greater than $300,000.
Thermonics ® Products: Our Thermonics® temperature conditioning products, which include our process chillers, provide tempered gas or fluid to enable customers to maintain desired thermal conditions within their tool or process. Applications include general industrial, chemical processing, energy, electronics, automotive, defense/aerospace and semiconductor markets. Prices generally range from $25 thousand to $150 thousand.
Sales to life sciences customers worldwide are handled directly by our own sales force and by our network of independent representatives and distributors. Sales to semiconductor manufacturers and customers in other markets in the U.S. are handled through independent sales representative organizations. In Singapore and Malaysia, our sales and service are handled through our internal sales and service staff.
Sales to life sciences customers worldwide are handled directly by our own sales force and by our network of independent representatives and distributors. Sales to semiconductor manufacturers and customers in other markets in the U.S. are handled directly by our own sales force and through independent sales representative organizations.
While we believe that our patents and other proprietary rights are important to our business, we also believe that, due to the rapid pace of technological change in the markets we serve, the successful manufacture and sale of our products also depends upon our engineering, manufacturing, marketing and servicing skills.
Risk Factors ” in this Report. 14 While we believe that our patents and other proprietary rights are important to our business, we also believe that, due to the rapid pace of technological change in the markets we serve, the successful manufacture and sale of our products also depends upon our engineering, manufacturing, marketing and servicing skills.
This programming is done with computer-aided design or design data of the device to be tested. Traditional in-circuit testing systems require a dedicated fixture for each board to be tested. Acculogic’s Flying Probe system can test a virtually unlimited number of boards without any hardware modifications.
This programming is done with computer-aided design or design data of the device to be tested. Traditional in-circuit testing systems require a dedicated fixture for each board to be tested. Acculogic’s Flying Probe system can test a virtually unlimited number of boards without any hardware modifications. These systems generally sell for between $250 thousand and $800 thousand.
Both types protect the delicate interface contacts and ensure proper repeatable and precise alignment between the test head's interface board and the prober's probing assembly or the handler's test socket as they are brought together, or "docked." Fixed manual docking includes a mechanical cam mechanism to dock and lock the test head to the prober or handler.
All of our docking hardware products protect the delicate interface contacts and ensure proper repeatable and precise alignment between the test head’s interface board and the prober’s probing assembly or the handler’s test socket as they are brought together, or “ docked .” Fixed manual docking includes a mechanical cam mechanism to dock and lock the test head to the prober or handler.
The front-end wafer fabrication plants of U.S. semiconductor manufacturers are primarily in the U.S. Likewise, European, Taiwanese, South Korean and Japanese semiconductor manufacturers generally have located their wafer fabrication plants in their respective countries. Electronic Test Products : In North America, we sell our inTEST EMS products to semiconductor manufacturers through internal account representatives and independent, commissioned sales representatives.
Likewise, European, Taiwanese, South Korean and Japanese semiconductor manufacturers generally have located their wafer fabrication plants in their respective countries. Electronic Test Products : In North America, we sell our inTEST EMS products to semiconductor manufacturers through internal account representatives and independent, commissioned sales representatives.
In the rest of Asia, our sales are handled through distributors. In Europe, sales managers at our office in Germany, as well as regional distributors and independent sales representatives, sell to semiconductor manufacturers and customers in other markets. We communicate with our distributors regularly and have trained them to sell and service our thermal products.
In Europe, sales managers at our office in Germany, as well as regional distributors and independent sales representatives, sell to semiconductor manufacturers and customers in other markets. We communicate with our distributors regularly and have trained them to sell and service our thermal products.
ENGINEERING AND PRODUCT DEVELOPMENT Our success depends on our ability to provide our customers with products and solutions that are well engineered and to design those products and solutions before, or at least no later than, our competitors. At December 31, 2023, we employed a total of 84 engineers engaged in engineering and product development.
ENGINEERING AND PRODUCT DEVELOPMENT Our success depends on our ability to provide our customers with products and solutions that are well engineered and to design those products and solutions before, or at least no later than, our competitors. At December 31, 2024, we employed approximately 100 engineers engaged in engineering and product development.
Our U.S. patents expire at various times beginning in 2024 and extending through 2039. During 2023, one U.S. patent was issued and 18 U.S. patents expired. We do not believe that the upcoming expiration of certain of our patents in 2024 will have a material impact on our business.
Our U.S. patents expire at various times beginning in 2025 and extending through 2039. During 2024, no U.S. patents were issued and 9 U.S. patents expired. We do not believe that the upcoming expiration of certain of our patents in 2025 will have a material impact on our business.
Under the terms of the Lease Agreement, Alfamation will lease warehouse and office space totaling about 51,817 square feet. Alfamation will pay a yearly lease payment of €231,312 broken up into four equal payments. At the date of the signing of the Lease Agreement, the yearly lease payment equated to approximately $253,000.
Under the terms of the Lease Agreement, Alfamation™ will lease warehouse and office space totaling about 51,871 square feet. Alfamation™ will pay a yearly lease payment of approximately €260 thousand broken up into four equal payments. At the date of the signing of the Lease Agreement, the yearly lease payment equated to approximately $284 thousand.
Item 1. BUSINESS OVERVIEW AND STRATEGY inTEST Corporation was incorporated in New Jersey in 1981 and reincorporated in Delaware in April 1997. The consolidated entity is comprised of inTEST Corporation and our wholly-owned subsidiaries. In this Report, "we," "us," "our," and the "Company" refer to inTEST Corporation and our consolidated subsidiaries.
Item 1. BUSINESS OVERVIEW inTEST Corporation was incorporated in New Jersey in 1981 and reincorporated in Delaware in April 1997. The consolidated entity is comprised of inTEST Corporation and our wholly owned subsidiaries.
Customer support is provided by trained distributors and supplemented by direct employees from North America and Europe. Environmental Technologies Products : We market our Temptronic, Sigma Thermonics, and North Sciences brands under the umbrella name of inTEST Thermal Solutions and sales to ATE manufacturers are handled directly by our own sales force and our network of independent representatives and distributors.
Environmental Technologies Products : We market our Temptronic®, Sigma, Thermonics®, and North Sciences brands under the umbrella name of inTEST Thermal Solutions and sales to ATE manufacturers are handled directly by our own sales force and our network of independent representatives and distributors.
The primary raw materials used in fabricated parts are widely available. Substantially all of our components are purchased from multiple suppliers; however, certain raw materials and components are sourced from single suppliers, as discussed further in Item 7, “Management's Discussion and Analysis of Financial Condition and Results of Operations”.
The primary raw materials used in fabricated parts are widely available. Substantially all of our components are purchased from multiple suppliers; however, certain raw materials and components are sourced from single suppliers, as discussed further in “ Part II; Item 7.
None of our employees are represented by a labor union, and we have never experienced a work stoppage. From time to time, we retain third-party contractors to assist us in manufacturing operations and engineering and product development projects.
Only two of our employees (both outside the United States) are represented by a labor union, and we have never experienced a work stoppage. From time to time, we retain temporary workers or third-party contractors to assist us in manufacturing operations and engineering and product development projects.
An important aspect of our 5-Point Strategy includes broadening and diversifying our customer base. We plan to do this both through acquisitions as well as through leveraging current customer relationships, increasing our portfolio of product offerings and expanding our global footprint to better serve existing and new customers.
We plan to do this both through acquisitions as well as through leveraging current customer relationships, increasing our portfolio of product offerings and expanding our global footprint to better serve existing and new customers.
At the same time, the growing complexity of ICs has increased the difficulty of maximizing test yields. In order to address these market trends, we believe semiconductor manufacturers strive for more effective utilization of ATE, smaller test areas and increased wafer level testing which requires our differentiated solutions that include test head manipulators, test head docking stations and test interfaces.
To address these market trends, we believe semiconductor manufacturers strive for more effective utilization of ATE, smaller test areas and increased wafer level testing which requires our differentiated solutions that include test head manipulators, test head docking stations and test interfaces.
In addition, some of our engineers are assigned to new product research and development and have worked on such projects as the development of new types of universal manipulators, the redesign and development of new thermal products and the development of high-performance interfaces. 12 Since most of our products are customized, we consider substantially all of our engineering activities to be engineering and product development.
In addition, some of our engineers are assigned to new product research and development and have worked on such projects as the development of new types of universal manipulators, the redesign and development of new thermal products and the development of high-performance interfaces.
We believe that our long-term relationships with our customers in the various markets we support and our commitment to, and reputation for, providing high quality products, are important elements in our ability to compete effectively in all of our markets. Our principal competitors for manipulator products are Advantest Corporation, Esmo AG, Reid-Ashman Manufacturing and Teradyne, Inc.
We believe that our long-term relationships with our customers in the various markets we support and our commitment to, and reputation for, providing high quality products, are important elements in our ability to compete effectively in all of our markets.
Nonetheless, we expect the shifts in demand in the industry from periods of expansion to periods of contraction may be significant, as has been the case for much of the semi market in 2023, when the industry was in a period of slowing growth and overall declines as compared to 2021 and 2022. 6 We believe that semiconductor manufacturers remain under pressure to maximize production yields and reduce testing costs.
Nonetheless, we expect the shifts in demand in the industry from periods of expansion to periods of contraction may be significant, as has been the case for much of the semi market in 2023 and 2024, when the industry was in a period of slowing growth and overall declines as compared to 2021 and 2022.
The EKOHEAT 2 offering is the next generation and evolution of Ambrell’s renowned VPA Technology. In our Environmental Technologies division, we made great progress on the BT28, our next generation benchtop Thermostream. The BT28 is a new benchtop thermal testing system that we intend to officially be released at the OTC Conference in San Diego on March 26, 2024.
The EKOHEAT® 2 offering is the next generation and evolution of Ambrell®’s renowned VPA Technology. In our Environmental Technologies division, we released the BT28, our next generation benchtop ThermoStream®. The BT28 is a new benchtop thermal testing system that was released at the Optical Fiber Communication Conference in San Diego on March 26, 2024.
This facility is expected to begin operations in the second or third quarter of 2024. OUR SEGMENTS As noted above, we have three operating segments which are also our reportable segments and reporting units: Electronic Test, Environmental Technologies and Process Technologies.
This facility began engineering and supply chain operations in the third quarter of 2024 and is expected to begin manufacturing and support operations by the third quarter of 2025. OUR SEGMENTS We have three operating segments, which are also our reportable segments and reporting units: Electronic Test, Environmental Technologies and Process Technologies.
In the life sciences industry, we provide image capture products, electronic test systems and heating systems for medical device manufacturing and equipment for critical applications within the medical cold chain for pharmaceuticals. In the security industry, our image capture and data management technologies are used in a broad variety of applications.
In the life sciences industry, we provide image capture products, electronic test systems and heating systems for medical device manufacturing and equipment for critical applications within the medical cold chain for pharmaceuticals.
Alfamation also has a small sales and service subsidiary based in Suzhou City, China. Alfamation will become a part of our Electronic Test operating segment.
Alfamation™ was founded in 1991 and is headquartered in Milan, Italy. Alfamation™ also has a small sales and service subsidiary based in Suzhou City, China. Alfamation™ is a part of our Electronic Test operating segment.
To capture this opportunity, we intend to make investments to drive further penetration in our existing markets. These investments may include initiatives to increase revenue both by leveraging our customer relationships to provide a broader array of our current portfolio of products to our existing customer base as well as by expanding our customer base within these markets.
To capture this opportunity, we have been making investments in talent, technology, channels to market and geographic presence. These continued investments may include initiatives to increase revenue both by leveraging our customer relationships to provide a broader array of our current portfolio of products to our existing customer base as well as by expanding our customer base within these markets.
Although, from time to time, certain components may be in short supply due to high demand or inability of vendors to meet quality or delivery requirements, we believe that all materials and components are available in adequate amounts from other sources, except as noted above. We conduct inspections of incoming raw materials, fabricated parts and components using sophisticated measurement equipment.
Management ’ s Discussion and Analysis of Financial Condition and Results of Operations .” Although, from time to time, certain components may be in short supply due to high demand or inability of vendors to meet quality or delivery requirements, we believe that all materials and components are available in adequate amounts from other sources, except as noted above.
Thermonics' products provide a range of precision temperature forcing systems and have been melded into Temptronic's ATS ThermoStream product line. The Thermonics brand is now used to market a family of process chillers for test and industrial applications. Ultra-Cold Storage Solutions.
Thermonics®’ products provide a range of precision temperature forcing systems and have been melded into Temptronic®’s ATS ThermoStream® product line. The Thermonics® brand is now used to market a family of process chillers for test and industrial applications. Induction Heating. Our induction heating products are used in process applications where precision-controlled heating is needed.
Our engineers are easily accessible to, and can work directly with, most of our customers from the time we begin developing our initial proposal, through the delivery, installation and use of the product by our customer. In this way, we are able to develop and maintain close relationships with our customers.
We provided service to our customers from sales and service personnel based in the U.S., Europe and Asia. Our engineers are easily accessible to, and can work directly with, most of our customers from the time we begin developing our initial proposal, through the delivery, installation and use of the product by our customer.
Our New Jersey facility manufactures products only for the semiconductor industry where ISO certification is not required, so we do not maintain any ISO certifications there. However, this location does employ the practices embodied in the ISO 9001:2008. Our Massachusetts facility and our Acculogic office in CA are ITAR compliant enabling them to support the specific requirement of the U.S.
Each of our Massachusetts, New York, and Canada facilities is ISO 9001:2015 certified. Our New Jersey facility manufactures products only for the semiconductor industry where ISO certification is not required, so we do not maintain any ISO certifications there. However, this location does employ the practices embodied in the ISO 9001:2008.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeAny increase in these costs, or unanticipated liabilities arising from, among other things, discovery of previously unknown conditions or more aggressive enforcement actions, could adversely affect our results of operations, and there is no assurance that they will not exceed our reserves or have a material adverse effect on our financial condition. 17 We have identified a material weakness in our internal control over financial reporting, and if our remediation of such material weakness is not effective, or if we fail to develop and maintain an effective system of disclosure controls and internal control over financial reporting, our ability to produce timely and accurate financial statements or comply with applicable laws and regulations could be impaired.
Biggest changeAny increase in these costs, or unanticipated liabilities arising from, among other things, discovery of previously unknown conditions or more aggressive enforcement actions, could adversely affect our results of operations, and there is no assurance that they will not exceed our reserves or have a material adverse effect on our financial condition. 19 In prior periods, our management identified material weaknesses in our internal control over financial reporting.
If we acquire additional businesses, technologies or products, we will face the following additional risks: ● acquisitions could divert management's attention from daily operations or otherwise require additional management, operational and financial resources; ● we might not be able to integrate acquisitions into our business successfully or operate acquired businesses profitably; ● we may realize substantial acquisition related expenses that would reduce our net earnings in future years; ● we may not realize the expected benefits of such acquisitions; ● our investigation of potential acquisition candidates may not reveal problems and liabilities of the companies and businesses that we acquire; ● any acquisitions may pose risks associated with entry into new geographic markets, including outside the U.S., distribution channels, lines of business or product categories, where we may not have significant or any prior experience and where we may not be as successful or profitable as we are in businesses and geographic regions where we have greater familiarity and brand recognition; ● an acquisition may result in disparate information technology, internal control, financial reporting and record-keeping systems; ● an acquisition may result in employee anxiety, morale and/or engagement issues and employees not familiar with our business; ● an acquisition may result in the loss of our or the acquired company’s key personnel, customers, distributors or suppliers; and ● we may become exposed to litigation or claims associated with an acquisition.
If we acquire additional businesses, technologies or products, we will face the following additional risks: ● acquisitions could divert management’s attention from daily operations or otherwise require additional management, operational and financial resources; ● we might not be able to integrate acquisitions into our business successfully or operate acquired businesses profitably; ● we may realize substantial acquisition-related expenses that would reduce our net earnings in future years; ● we may not realize the expected benefits of such acquisitions; ● our investigation of potential acquisition candidates may not reveal problems and liabilities of the companies and businesses that we acquire; 16 ● any acquisitions may pose risks associated with entry into new geographic markets, including outside the U.S., distribution channels, lines of business or product categories, where we may not have significant or any prior experience and where we may not be as successful or profitable as we are in businesses and geographic regions where we have greater familiarity and brand recognition; ● an acquisition may result in disparate information technology, internal control, financial reporting and record-keeping systems; ● an acquisition may result in employee anxiety, morale and/or engagement issues and employees not familiar with our business; ● an acquisition may result in the loss of our or the acquired company’s key personnel, customers, distributors or suppliers; and ● we may become exposed to litigation or claims associated with an acquisition.
We may incur significant expenses related to due diligence or other transaction-related expenses for a proposed acquisition that may not be completed, which may have a material adverse effect on our financial condition and results of operations. 14 Our acquisition strategy involves financial and management risks which may adversely affect our results in the future.
We may incur significant expenses related to due diligence or other transaction-related expenses for a proposed acquisition that may not be completed, which may have a material adverse effect on our financial condition and results of operations. Our acquisition strategy involves financial and management risks which may adversely affect our results in the future.
The additional payments will be based on a percent of net invoices for which payments have been received on systems sold to EV battery customers in excess of CAD $2.5 million per year in each of the five years. The maximum payment is capped at CAD $5.0 million, which equates to approximately USD $3.8 million at December 31, 2023.
The additional payments will be based on a percentage of net invoices for which payments have been received on systems sold to EV battery customers exceeding CAD $2.5 million per year in each of the five years. The maximum payment is capped at CAD $5.0 million, which equates to approximately USD $3.5 million at December 31, 2024.
There were no payments due for the years ended December 31, 2022 or 2023. The fair value of this contingent consideration liability involves assessing the total amount of revenue we expect from sales to EV or battery customers during the applicable time periods as well as when we expect to receive payment for the related net invoices.
The fair value of this contingent consideration liability involves assessing the total amount of revenue we expect from sales to EV or battery customers during the applicable time periods as well as when we expect to receive payment for the related net invoices.
The management of this growth will require, among other things, continued development of our financial and management controls and management information systems, stringent control of costs, the ability to attract and retain qualified management personnel and the training of new personnel. Failure to successfully manage our possible growth and development could have a material adverse effect on our business.
The management of this growth will require, among other things, continued development of our financial and management controls and management information systems, stringent control of costs, the ability to attract and retain qualified management personnel and the training of new personnel.
There is a risk that some or all of the anticipated strategic and financial benefits may fail to materialize, may not continue on their existing terms, or may not occur within the time period anticipated.
Failure to successfully manage our possible growth and development could have a material adverse effect on our business. 17 There is a risk that some or all of the anticipated strategic and financial benefits may fail to materialize, may not continue on their existing terms, or may not occur within the time period anticipated.
While the global supply chain seems to have returned to a more normalized state as of the end of 2023, certain components of our products may continue to be in short supply from time to time because of high demand or the inability of some vendors to consistently meet our quality or delivery requirements.
Furthermore, certain components of our products may continue to be in short supply from time to time because of high demand or the inability of some vendors to consistently meet our quality or delivery requirements.
As we implement our business strategy as intended, we have and may in the future experience rapid growth and development in a relatively short period of time.
We may not be able to effectively manage our growth and operations, which could materially and adversely affect our business. As we implement our business strategy as intended, we have and may in the future experience rapid growth and development in a relatively short period of time.
RISKS RELATED TO OUR BUSINESS OPERATIONS If our suppliers do not meet product or delivery requirements, or inflationary pressures continue to increase and we cannot increase our prices to our customers, we could have reduced revenues and earnings.
If we are unable to expand these sales, our revenue and results of operations will remain substantially dependent upon the cycles of the semi market. 18 RISKS RELATED TO OUR BUSINESS OPERATIONS If our suppliers do not meet product or delivery requirements, or inflationary pressures continue to increase and we cannot increase our prices to our customers, we could have reduced revenues and earnings.
Conversely, semiconductor manufacturers increase capital expenditures when market demand requires the addition of new or expanded production capabilities or the reconfiguration of existing fabrication facilities to accommodate new products.
Conversely, semiconductor manufacturers increase capital expenditures when market demand requires the addition of new or expanded production capabilities or the reconfiguration of existing fabrication facilities to accommodate new products. These market changes have contributed in the past, and will likely continue to contribute in the future, to fluctuations in our operating results.
In addition, due to the highly specialized nature of certain of our product offerings in these markets, we do not expect broad market penetration in many of these markets. If we are unable to expand these sales, our revenue and results of operations will remain substantially dependent upon the cycles of the semi market.
In addition, due to the highly specialized nature of certain of our product offerings in these markets, we do not expect broad market penetration in many of these markets.
These market changes have contributed in the past, and will likely continue to contribute in the future, to fluctuations in our operating results. 16 We seek to further diversify the markets for our products in order to increase the proportion of our sales attributable to markets which are less subject to cyclicality than the semi market.
We seek to further diversify the markets for our products in order to increase the proportion of our sales attributable to markets which are less subject to cyclicality than the semi market. If we are unable to do so, our future performance will remain substantially exposed to the fluctuations of the cyclicality of the semi market.
During 2023 and 2022, our sales to markets other than the semi market were $57.6 million and $48.4 million, respectively, and represented 47% and 42% of our consolidated revenue, respectively.
We sell certain of our products in markets other than the semi market, including the automotive, defense/aerospace, industrial, life sciences and security markets. During 2024 and 2023, our sales to markets other than the semi market were $82.0 million and $57.6 million, respectively, and represented 63% and 47% of our consolidated revenue, respectively.
At December 31, 2023, the contingent consideration liability on our balance sheet was USD $1.1 million which was its estimated fair value at that date.
At December 31, 2024, the total contingent consideration liability on our balance sheet was USD $0.9 million which was its estimated fair value at that date. Any future adjustments to the estimated fair value of the contingent liability will be recorded in our results of operations for the period in which the adjustment occurs.
Removed
Any future adjustments to the estimated fair value of the contingent liability will be recorded in our results of operations for the period in which the adjustment occurs. 15 We may not be able to effectively manage our growth and operations, which could materially and adversely affect our business.
Added
There were no payments due for the years ended December 31, 2023 or 2022, while an immaterial amount is due for 2024 and is recorded as a component of other current liabilities.
Removed
If we are unable to do so, our future performance will remain substantially exposed to the fluctuations of the cyclicality of the semi market. We sell certain of our products in markets other than the semi market, including the automotive, defense/aerospace, industrial, life sciences and security markets.
Added
While the global supply chain seems to have returned to a more normalized state as of the end of 2024, ongoing uncertainty from geopolitical events and the global trade environment, including changes in the United States’ or international trade policy, tariffs, export controls, quotas, embargoes, or sanctions may trigger additional retaliatory actions by affected countries resulting in “trade wars” and further increased costs for goods and materials transported globally, which may negatively impact our customers, revenues and earnings.
Removed
We determined that our internal control over financial reporting and disclosure controls and procedures were not effective as of September 30, 2023 as a result of the material weakness related to recognition of revenue related to the sale of discontinued material/components purchased on behalf of customers where the associated materials/components were still physically located with us and the materials/components are expected to be applied to future product orders for these customers, as discussed in Part II, Item 9A of this Annual Report on Form 10-K.
Added
If other material weaknesses are identified in the future, we may not be able to report our financial results accurately, prevent fraud or file our periodic reports in a timely manner, which may adversely affect investor confidence in our Company and, as a result, the value of our common stock. As further explained in “
Removed
This material weakness has not been remediated and accordingly our internal control over financial reporting and disclosure controls and procedures remains ineffective. Management is actively engaged in the planning for, and implementation of, remediation efforts to address our material weakness but there can be no assurance that those efforts will be successful.
Removed
Refer to Part II, Item 9A for further details of the material weakness and remediation efforts.
Removed
A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of a company's annual or interim financial statements will not be prevented or detected on a timely basis.
Removed
As such, if we do not remediate this material weakness in a timely manner, or if additional material weaknesses in our internal control over financial reporting are discovered, they may adversely affect our ability to record, process, summarize and report financial information timely and accurately and our financial statements may contain material misstatements or omissions.
Removed
Additionally, our internal control environment and remediation efforts do not provide absolute assurance with regard to timely detecting or preventing control deficiencies and thus do not insulate us from any failure to meet our financial reporting obligations.
Removed
It is possible that additional control deficiencies could be identified by our management or by our independent registered public accounting firm in the future or may occur without being identified.
Removed
Such a failure could require us to incur the expense of remediation, result in regulatory scrutiny, investigations or enforcement actions, cause investors to lose confidence in our reported financial condition and have a negative effect on the trading price of our common stock, lead to a default under our indebtedness, and otherwise have a material adverse effect on our business, financial condition, results of operations, and cash flows.
Removed
Further, if we are unable to conclude that our internal control over financial reporting is effective, or, if and when required, our independent registered public accounting firm is unable to express an unqualified opinion as to the effectiveness of our internal control over financial reporting, investors may lose confidence in the accuracy and completeness of our financial statements, the market price of our common stock could be adversely affected, our common stock could become subject to delisting and we could become subject to litigation or investigations by the stock exchange or exchanges on which our securities are listed, the SEC or other regulatory authorities, any of which could require additional financial and management resources.
Removed
We cannot assure you that the measures we have taken to date, and actions we may take in the future, will be sufficient to remediate the control deficiencies that led to our material weaknesses in our internal control over financial reporting or that they will prevent or avoid potential future material weaknesses.
Removed
Our current controls and any new controls that we develop may become inadequate because of changes in conditions in our business. Further, weaknesses in our disclosure controls and internal control over financial reporting may be discovered in the future.
Removed
Any failure to develop or maintain effective controls or any difficulties encountered in their implementation or improvement could harm our operating results or cause us to fail to meet our reporting obligations and may result in a restatement of financial statements for prior periods.
Removed
Our business may suffer if we are unable to attract and retain key employees or hire personnel at the costs we currently project.
Removed
Our future success will depend largely upon the continued services of our senior management and other key employees or the development of successors with commensurate skills and talents in a timely fashion and at the costs we project.
Removed
If we cannot continue to increase employee salaries and maintain employee benefits commensurate with competitive opportunities, we may not be able to retain our senior management and other key employees. The loss of key personnel could adversely affect our ability to manage our business effectively and could increase our costs in future periods.
Removed
We have recently experienced difficulty in hiring personnel at the costs projected in our forecasts. This has resulted in the need to increase the labor rates offered for certain positions.
Removed
If we cannot find savings in other areas or increase the price for which we sell our products in an amount sufficient to cover these additional labor costs, we may experience reduced margins in future periods.
Removed
We have experienced and may continue to experience significant variability in our effective tax rates and may have exposure to additional tax liabilities and costs. We are subject to income taxes in the U.S. and various other countries in which we operate.
Removed
Our effective tax rate is dependent on where our earnings are generated and the tax regulations and the interpretation and judgment of administrative tax or revenue entities in the U.S. and other countries. We are also subject to tax audits in the countries where we operate.
Removed
Any material assessment resulting from an audit from an administrative tax or revenue entity could negatively affect our financial results. The terms and covenants relating to our credit facility could adversely impact our ability to pursue our strategy and our financial performance and liquidity, and thus we may need additional financial resources to maintain our liquidity.
Removed
Our credit facility with M&T Bank contains covenants requiring us to, among other things, provide financial and other information and to provide notice upon the occurrence of certain events affecting us or our business.
Removed
These covenants also place restrictions on our ability to incur additional indebtedness, and enter into certain transactions, including selling assets, engaging in mergers or acquisitions, or engaging in transactions with affiliates.
Removed
If we fail to satisfy one or more of the covenants under our credit facility, we would be in default thereunder, and may be required to repay such debt with capital from other sources or otherwise not be able to draw down against our facility.
Removed
Under such circumstances, we may have difficulty in locating another lender that would be willing to extend credit to us, and other sources of capital may not be available to us on reasonable terms or at all.
Removed
See “Management's Discussion and Analysis of Financial Condition and Results of Operations – Overview – Credit Facility” and Note 10 to our consolidated financial statements in this Report for a discussion of the material terms of our credit facility. 18 We hold our cash and cash equivalents that we use to meet our working capital needs in deposit accounts that could be adversely affected if the financial institutions holding such funds fail.
Removed
We hold our cash and cash equivalents that we use to meet our working capital needs in deposit accounts at multiple financial institutions. The balance held in these accounts may exceed the Federal Deposit Insurance Corporation ("FDIC"), standard deposit insurance limit or similar government guarantee schemes.
Removed
If a financial institution in which we hold such funds fails or is subject to significant adverse conditions in the financial or credit markets, we could be subject to a risk of loss of all or a portion of such uninsured funds or be subject to a delay in accessing all or a portion of such uninsured funds.
Removed
Any such loss or lack of access to these funds could adversely impact our short-term liquidity and ability to meet our obligations. For example, on March 10, 2023, Silicon Valley Bank ("SVB"), and on March 12, 2023, Signature Bank, were closed by state regulators and the FDIC was appointed receiver for each bank.
Removed
The FDIC created successor bridge banks and all deposits of SVB and Signature Bank were transferred to the bridge banks under a systemic risk exception approved by the United States Department of the Treasury, the Federal Reserve and the FDIC.
Removed
If financial institutions in which we hold funds for working capital were to fail, we cannot provide any assurances that such governmental agencies would take action to protect our uninsured deposits in a similar manner.
Removed
We also maintain investment accounts with other financial institutions in which we hold our investments and, if access to the funds we use for working capital is impaired, we may not be able to sell investments or transfer funds from our investment accounts to new accounts on a timely basis sufficient to meet our working capital needs.
Removed
We face risks associated with doing business in China. We conduct sales and other business operations in China, as a result, the economic, political, legal and social conditions in China could harm our business. In recent years, the Chinese economy has experienced periods of rapid expansion and high rates of inflation.
Removed
These factors have led to the adoption by the Chinese government, from time to time, of various corrective measures designed to restrict the availability of credit or regulate growth and contain inflation.
Removed
Various factors may in the future cause the Chinese government to impose controls on credit or prices, or to take other action, which could inhibit economic activity in China, and thereby harm the market for our products.
Removed
In addition, the legal system in China has inherent uncertainties that may limit the legal protections available in the event of any claims or disputes that we have with third parties, including our ability to protect the intellectual property we develop in China or elsewhere.
Removed
As China's legal system is still evolving, the interpretation of many laws, regulations and rules is not always uniform and enforcement of these laws, regulations and rules involve uncertainties, which may limit the remedies available in the event of any claims or disputes with third parties.
Removed
In addition, any litigation in China may be protracted and result in substantial costs and diversion of resources and management attention.
Removed
Some of the other risks related to doing business in China include: ● The Chinese government exerts substantial influence over the manner in which we must conduct our business activities; ● Restrictions on currency exchange may limit our ability to receive, transfer and use our cash effectively; ● Increased uncertainties related to the enforcement of intellectual property rights including any intellectual property rights that we may license to a Chinese (or other emerging jurisdiction) entity, including any joint ventures we may form; ● Increased uncertainties relating to Chinese regulation of exports of products and technology to and from China; ● Increased and rapidly changing export and related trade regulations and restrictions imposed by U.S. and Chinese legislation, executive actions and regulations; ● Difficulty of travel to and from China (and to and from United States) arising from or related to the COVID-19 pandemic or any future pandemic; ● The Chinese government may favor its local businesses and make it more difficult for foreign businesses to operate in China on an equal footing, or create generally difficult conditions for foreign headquartered businesses to operate; ● Increased uncertainties related to the enforcement of contracts with certain parties; ● More restrictive rules on foreign investment could adversely affect our ability to expand our operations in China; and ● Geopolitical tensions between China on the one hand and the United States and/or the European Union on the other hand, may increase and may lead to increased export sanctions with Chinese entities and sanctions made against China.
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As a result of our growing operations in China, these risks could harm our business. We face political and other risks conducting business in Taiwan particularly due to their tense relationships with China. We have customers located in Taiwan.
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Accordingly, our business, financial condition and results of operations may be affected by changes in governmental and economic policies in Taiwan, social instability and diplomatic and social developments in or affecting Taiwan due to its unique international political status.
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Although significant economic and cultural relations have been established between Taiwan and China, we cannot assure that relations between Taiwan and China will not face political or economic uncertainties in the future.
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Any deterioration in the relations between Taiwan and China, and other factors affecting military, political or economic conditions in Taiwan, could disrupt our business operations and materially and adversely affect our results of operations. 19 RISKS RELATED TO OUR CUSTOMER BASE Changes in the buying patterns of our customers have affected, and may continue to affect, demand for our products and our gross and net operating margins.
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Such changes in patterns are difficult to predict and may not be immediately apparent. In addition to the cyclicality of the semi market, demand for our products and our gross and net operating margins have also been affected by changes in the buying patterns of our customers.
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Some of the changes in customer buying patterns that have impacted us in the past, and may continue to do so in the future, have included customers placing heightened emphasis on shorter lead times (which places increased demands on our available engineering and production capacity and may result in increasing unit costs) and ordering in smaller quantities (which prevents us from acquiring component materials in larger volumes at lower unit costs.) We have also experienced customer supply chain management groups demanding lower prices and spreading purchases across multiple vendors.
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We believe some of the changes in customer buying patterns are the result of changes within the semi market over the last several years, including, for example, changing product requirements and longer time periods between new product offerings by OEMs.
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Such shifts in market practices have had, and may continue to have, varying degrees of impact on our revenue and our gross and net operating margins. Such shifts are difficult to predict and may not be immediately apparent, and the impact of these practices is difficult to quantify from period to period.
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There can be no assurance that we will be successful in implementing effective strategies to counter these shifts. We generate a large portion of our sales from a small number of customers. If we were to lose one or more of our large customers, our operating results could suffer dramatically.
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During the year ended December 31, 2023, one customer accounted for 13% of our consolidated revenue. This revenue was primarily generated by our Electronic Test segment. During the year ended December 31, 2023, no other customer accounted for 10% or more of our consolidated revenue.
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During the year ended December 31, 2022, no customer accounted for 10% or more of our consolidated revenue. During the years ended December 31, 2023 and 2022, our ten largest customers accounted for approximately 42% and 43% of our consolidated revenue, respectively.
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The loss of any one or more of our largest customers, or a reduction in orders by a major customer could materially reduce our net revenues or otherwise materially affect our business, financial condition or results of operations.
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RISKS RELATED TO COMPETITION Our business is subject to intense competition, which has in the past and could in the future, materially adversely affect our business, financial condition and results of operations. We face significant competition throughout the world in each of our operating segments.
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Some of our competitors have substantial financial resources and more extensive design and production capabilities than us. Some of our competitors are much smaller than we are, and therefore have much lower levels of overhead than us, which enables them to sell their competing products at lower prices.
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In order to remain competitive, we must continually commit a significant portion of our personnel and financial resources to developing new products and maintaining customer satisfaction worldwide. We expect our competitors to continue to improve the performance of their current products and introduce new products or technologies.
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In the recent past, in response to significant declines in global demand for our products, some competitors have reduced their product pricing significantly, which has led to intensified price-based competition, which has and could continue to materially adversely affect our business, financial condition and results of operations.
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Our markets are subject to rapid technological change, and our business prospects would be negatively affected if we are unable to quickly and effectively respond to innovation in the semi market or other markets that we serve. Technology, including semiconductor technology, continues to become more complex as the pace of innovation and development of new technology increases.
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In addition, manufacturers are incorporating ICs into an increasing variety of products. This trend, including the changes needed in automated testing systems to respond to developments in the semiconductor market, are likely to continue.
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We cannot be certain that we will be successful or timely in developing, manufacturing or selling products that will satisfy customer needs or that will attain market acceptance. Our failure to provide products that effectively and timely meet customer needs or gain market acceptance will negatively affect our business prospects.
Removed
RISKS RELATED TO FOREIGN OPERATIONS The current conflict in the Ukraine could disrupt our supply chain or cause other adverse effects on our revenue and earnings. In late February 2022, Russia initiated significant military action against Ukraine. In response, the U.S. and certain other countries imposed significant sanctions and trade actions against Russia.
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The U.S. and certain other countries could impose further sanctions, trade restrictions and other retaliatory actions should the conflict continue or worsen.
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It is not possible to predict the broader consequences of the conflict, including related geopolitical tensions, and the measures and retaliatory actions taken by the U.S. and other countries in respect thereof, as well as any counter measures or retaliatory actions by Russia in response.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeWe also engage a third-party consultant with experience in cyber defense to review our IRP to ensure it meets current standards and best practices. We have been the victim of cyber incidents and may be the subject of cyber incidents in the future. See Item 1A, Risk Factors for more information about the risk posed to us by cybersecurity threats.
Biggest changeWe also engage a trusted external cybersecurity consultant to review and update our IRP, ensuring it aligns with the latest industry standards and best practices. We have been the victim of cybersecurity incidents and may be the subject of cybersecurity incidents in the future.
We are implementing processes that are designed to effectively manage risks from cybersecurity threats. The IT Committee currently has in place an Incident Response Plan (the “IRP”). The IRP lays out our guidelines for responding to and handling cyber incidents.
We are implementing processes that are designed to effectively manage risks from cybersecurity threats. The IT Committee currently has in place an Incident Response Plan (the “ IRP ”). The IRP lays out our guidelines for responding to and handling cyber incidents.
Item 1C. CYBERSECURITY Cyber Security Governance Oversight of cybersecurity risks by management is led by our Information Technology (“IT”) Committee, which is chaired by our Director of IT and comprised of members of senior management including our Chief Executive Officer and Chief Financial Officer.
Item 1C. CYBERSECURITY Cyber Security Governance Oversight of cybersecurity risks by management is led by our Information Technology (“ IT ”) Committee, which is chaired by our Corporate Vice President of IT and Cybersecurity and comprised of members of senior management including our Chief Executive Officer and Chief Financial Officer.
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To help prevent cyber security incidents we have integrated a number of third-party services into our IT systems to bolster our cyber security defenses. These services include a detection and response system which provides continuous monitoring of our IT systems, end-point protection on all of our computers and connected devices, as well as two-step verification for accessing our systems.
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To enhance our cybersecurity defenses and reduce the risk of cybersecurity incidents, we have integrated a range of third-party services into our IT systems.
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These include a robust detection and response solution that provides continuous monitoring of our environment and in January 2025 we implemented automation that shuts down active threats, endpoint protection across all devices, and the implementation of two-factor authentication for secure access. Additionally, we conduct regular penetration testing to identify and address potential vulnerabilities.
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See “ Item 1A, Risk Factors ” for more information about the risk posed to us by cybersecurity threats. 25

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeSquare Footage Principal Uses Rochester, NY April 2028 79,150 Process Technologies segment operations (principal facility for Ambrell) Mansfield, MA December 2024 52,700 Environmental Technologies segment operations (principal facility for iTS), Process Technologies segment operations (principal facility for Videology) Mt.
Biggest changeSquare Footage Principal Uses Rochester, NY April 2028 79,150 Process Technologies segment operations (principal facility for Ambrell®) Mansfield, MA February 2032 58,800 Environmental Technologies segment operations (principal facility for iTS), Process Technologies segment operations (principal facility for Videology®) Milan, Italy February 2030 51,871 Electronic Test segment operations (principal facility for Alfamation™) Mt.
Item 2. PROPERTIES At December 31, 2023, we leased thirteen facilities worldwide. The following chart provides information regarding each of our principal facilities that we leased at December 31, 2023: Location Lease Expiration Approx.
Item 2. PROPERTIES As of December 31, 2024, we leased fourteen facilities worldwide. The following chart provides information regarding each of our principal leased facilities as of December 31, 2024: Location Lease Expiration Approx.
Laurel, NJ April 2031 33,650 Corporate headquarters and Electronic Test segment operations Penang, Malaysia March 2027 (1) 25,000 Applications engineering, product development and localized manufacturing for nearly all inTEST brands Ontario, Canada February 2028 16,437 Electronic Test segment operations (primary facility for Acculogic Inc.) Fremont, CA November 2025 (2) 15,746 Formerly Electronic Test segment sales and engineering All of our facilities have space to accommodate our needs for the foreseeable future.
Laurel, NJ April 2031 33,650 Corporate headquarters and Electronic Test segment operations Penang, Malaysia May 2027 25,000 Applications engineering, product development and localized manufacturing for nearly all inTEST brands Markham, Ontario, Canada February 2028 16,437 Electronic Test segment operations (principal facility for Acculogic Inc.) All of our facilities have space to accommodate our needs for the foreseeable future.
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(1) Expected to commence operations in the second half of 2024. (2) During the fourth quarter of 2020, we consolidated all manufacturing operations for our EMS segment into our facility in Mt.
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Laurel, New Jersey, as more fully discussed in Note 5 to our consolidated financial statements for the year ended December 31, 2022 in our Annual Report on Form 10-K that was filed with the SEC on March 22, 2023. In August 2021, we subleased this facility for the balance of the term.
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As described further in Item 1, “Business—Acquisition,” effective March 12, 2024, in connection with our acquisition of Alfamation, we leased an additional facility for that operation. That facility is approximately 51,817 square feet and is located in Milan, Italy. The initial lease term expires on March 12, 2030, and renews automatically unless terminated by either party. 23

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeFurther, the Repurchase Plan may be suspended or discontinued at any time without prior notice. As of December 31, 2023, no shares had been repurchased under the Repurchase Plan. Securities Authorized for Issuance Under Equity Compensation Plan Information regarding securities authorized for issuance under equity compensation plans is included in Item 12.
Biggest changeThe Company is not obligated to purchase any common stock under the Repurchase Plan. Further, the Repurchase Plan may be suspended or discontinued at any time without prior notice. 26 Securities Authorized for Issuance Under Equity Compensation Plan Information regarding securities authorized for issuance under equity compensation plans is included in “ Part III; Item 12.
At March 1, we had 12,164,698 shares outstanding that were held by approximately 1,000 beneficial and record holders. No dividends were paid on our common stock in the years ended December 31, 2023 or 2022. We do not currently plan to pay cash dividends in the foreseeable future.
At March 1, we had 12,373,276 shares outstanding that were held by approximately 1,000 beneficial and record holders. No dividends were paid on our common stock in the years ended December 31, 2024 or 2023. We do not currently plan to pay cash dividends in the foreseeable future.
Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market for Common Stock Our common stock is traded on NYSE American LLC (“NYSE American”) under the symbol "INTT." On March 1, 2024, the closing price for our common stock as reported on the NYSE American was $12.16.
Item 5. MARKET FOR REGISTRANT ’ S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market for Common Stock Our common stock is traded on NYSE American LLC (“ NYSE American ”) under the symbol “INTT.” On March 1, 2025, the closing price for our common stock as reported on the NYSE American was $8.35.
On November 20, 2023, our Board of Directors authorized a share repurchase plan (the “Repurchase Plan”) whereby we may repurchase shares of our common stock on the open market with a total aggregate repurchase amount of up to $10 million until November 2024. We are not obligated to purchase any common stock under the Repurchase Plan.
Purchases of Equity Securities On November 20, 2023, our Board of Directors authorized a share repurchase plan (the “ Repurchase Plan ”) whereby we were permitted to repurchase shares of our common stock on the open market with a total aggregate repurchase amount of up to $10 million until November 17, 2024.
“Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters” under the caption “Equity Compensation Plan Information.”
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters; Equity Compensation Plan Information. ”
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Purchases of Equity Securities There were no shares of our common stock repurchased by us or on our behalf during the three months ended December 31, 2023.
Added
Through November 17, 2024, we repurchased 141,117 shares of our common stock for $1.0 million. On March 5, 2025, the Board of Directors authorized the renewal of the Repurchase Plan without a fixed expiration date. As of the renewal date, the Company had $8,961,150 available for repurchases under the renewed Repurchase Plan.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeYears Ended December 31, Change 2023 2022 $ % Orders: Semi $ 59,297 $ 73,070 $ (13,773 ) -18.8 % Industrial 14,980 10,554 4,426 41.9 % Auto/EV 10,193 9,899 294 3.0 % Life Sciences 4,353 5,705 (1,352 ) -23.7 % Defense/Aerospace 13,386 10,261 3,125 30.5 % Security 2,945 4,386 (1,441 ) -32.9 % Other 11,478 15,701 (4,223 ) -26.9 % $ 116,632 $ 129,576 $ (12,944 ) -10.0 % Total consolidated orders for the year ended December 31, 2023 were $116.6 million compared to $129.6 million in 2022, a decrease of $12.9 million, or 10%.
Biggest changeGiven that both orders and backlog are operational measures and our methodology for calculating orders and backlog do not meet the definition of a non-GAAP measure, as that term is defined by the SEC, a quantitative reconciliation for each is not required or provided. 29 The following table sets forth, for the periods indicated, a breakdown of the orders received by market: (in thousands except percentages) Years Ended December 31, Change 2024 2023 $ % Orders: Semi $ 44,574 $ 59,297 $ (14,723 ) -24.8 % Industrial 11,265 14,980 (3,715 ) -24.8 % Auto/EV 19,390 10,193 9,197 90.2 % Life Sciences 4,603 4,353 250 5.7 % Defense/Aerospace 13,715 13,386 329 2.5 % Security 1,237 2,945 (1,708 ) -58.0 % Other 12,920 11,478 1,442 12.6 % $ 107,704 $ 116,632 $ (8,928 ) -7.7 % Total consolidated orders for the year ended December 31, 2024 were $107.7 million compared to $116.6 million in 2023, a decrease of $8.9 million, or 8%.
These key target markets include the automotive, defense/aerospace, industrial, life sciences and security markets. We believe that these markets are usually less cyclical than the semi market.
These key target markets include the industrial, automotive, life sciences, defense/aerospace and security. We believe that these markets are usually less cyclical than the semi market.
Acquisition On March 12, 2024 we entered into a stock purchase agreement to acquire all of the outstanding capital shares of Alfamation S.p.A., (“Alfamation”), a leading global provider of state-of-the-art test and measurement solutions for the automotive, life sciences and specialty consumer electronics markets. Alfamation was founded in 1991 and is headquartered in Milan, Italy.
Acquisition On March 12, 2024, we entered into a stock purchase agreement to acquire all of the outstanding capital shares of Alfamation S.p.A., a leading global provider of state-of-the-art test and measurement solutions for the automotive, life sciences and specialty consumer electronics markets. Alfamation™ was founded in 1991 and is headquartered in Milan, Italy.
Such market demand can be the result of market expansion, development of new technologies or redesigned products to incorporate new features, or the replacement of aging equipment. In the past, the semi market has been highly cyclical with recurring periods of oversupply, which often severely impact the semi market's demand for the products we manufacture and sell into the market.
Such market demand can be the result of market expansion, development of new technologies or redesigned products to incorporate new features, or the replacement of aging equipment. 27 In the past, the semi market has been highly cyclical with recurring periods of oversupply, which often severely impact the semi market’s demand for the products we manufacture and sell into the market.
Proceeds from Sale of Common Stock On May 11, 2023, we entered into an At-the-Market Issuance Sales Agreement (the "Sales Agreement") pursuant to which we issued and sold 921,797 shares of our common stock having an aggregate offering price of $20.0 million between May 11, 2023 and May 31, 2023.
Proceeds from Sale of Common Stock On May 11, 2023, we entered into an At-the-Market Issuance Sales Agreement (the “ Sales Agreement ”) pursuant to which we issued and sold 921,797 shares of our common stock having an aggregate offering price of $20.0 million between May 11, 2023, and May 31, 2023.
The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of operations in the period that includes the enactment date. Deferred tax assets are analyzed to determine if there will be sufficient taxable income in the future in order to realize such assets.
The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of operations in the period that includes the enactment date. 35 Deferred tax assets are analyzed to determine if there will be sufficient taxable income in the future in order to realize such assets.
As a result, our backlog at a particular date is not necessarily indicative of sales for any future period. Israel-Hamas War, War in Ukraine and Global Supply Chain Constraints In early October 2023, Hamas attacked Israel and Israel formally declared war in response to the attack. The conflict is ongoing, and it is unclear when it might end.
As a result, our backlog at a particular date is not necessarily indicative of sales for any future period. Global Supply Chain Constraints In October 2023, Hamas attacked Israel and Israel formally declared war in response to the attack. The conflict is ongoing, and it is unclear when it might end.
Off-Balance Sheet Arrangements There were no off-balance sheet arrangements during the year ended December 31, 2023 that have or are reasonably likely to have, a material current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, cash requirements or capital resources.
Off-Balance Sheet Arrangements There were no off-balance sheet arrangements during the year ended December 31, 2024 that have or are reasonably likely to have, a material current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, cash requirements or capital resources.
We did not record any impairment charges related to our goodwill during 2023 or 2022. Indefinite-lived intangible assets are assessed for impairment at least annually in the fourth quarter, or more frequently if events or changes in circumstances indicate that the asset might be impaired.
We did not record any impairment charges related to our goodwill during 2024 or 2023. Indefinite-lived intangible assets are assessed for impairment at least annually in the fourth quarter, or more frequently if events or changes in circumstances indicate that the asset might be impaired.
In addition, please refer to the discussion of our business and markets contained in Part I, Item 1 of this Report.
In addition, please refer to the discussion of our business and markets contained in “ Part I, Item 1. Business ” of this Report.
Our backlog includes customer orders that we have accepted, substantially all of which we expect to deliver in 2024. While backlog is calculated on the basis of firm purchase orders, a customer may cancel an order or accelerate or postpone currently scheduled delivery dates.
Our backlog includes customer orders that we have accepted, substantially all of which we expect to deliver in 2025. While backlog is calculated on the basis of firm purchase orders, a customer may cancel an order or accelerate or postpone currently scheduled delivery dates.
The Credit Facility had a five year contract period that began on the Closing Date and expired on October 15, 2026, and draws under the Term Note were permissible for two years.
The Credit Facility had a five-year contract period (the “ Contract Period ”) that began on October 15, 2021 (the “ Closing Date ”) and expired on October 15, 2026, and draws under the Term Note were permissible for two years.
Long-lived assets, which consist of finite-lived intangible assets, property and equipment and ROU assets, are assessed for impairment whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable or that the useful lives of these assets are no longer appropriate.
Long-lived assets, which consist of finite-lived intangible assets, property and equipment and right of use (“ ROU ”) assets, are assessed for impairment whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable or that the useful lives of these assets are no longer appropriate.
The Amended Loan Agreement includes customary affirmative, negative and financial covenants, including a maximum ratio of consolidated funded debt to consolidated EBITDA of not more than 3.0 to 1.0 and a fixed charge coverage ratio of not less than 1.25 to 1.0.
The Credit Agreement includes customary affirmative, negative and financial covenants, including a maximum ratio of consolidated funded debt to consolidated EBITDA of not more than 3.0 to 1.0 and a fixed charge coverage ratio of not less than 1.25 to 1.0.
Changes in assumptions concerning future financial results or other underlying assumptions could have a significant impact on either the fair value of the reporting unit or the amount of the goodwill impairment charge. At December 31, 2023 and 2022, goodwill was $21.7 million and $21.6 million, respectively.
Changes in assumptions concerning future financial results or other underlying assumptions could have a significant impact on either the fair value of the reporting unit or the amount of the goodwill impairment charge. At December 31, 2024 and 2023, goodwill was $30.7 million and $21.7 million, respectively.
Alfamation also has a small sales and service subsidiary based in Suzhou City, China. Alfamation will become a part of our Electronic Test operating segment.
Alfamation™ also has a small sales and service subsidiary based in Suzhou City, China. Alfamation™ is part of our Electronic Test operating segment.
If the carrying amount of a reporting unit exceeds its fair value, an impairment loss shall be recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit.
If the fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is considered not impaired. If the carrying amount of a reporting unit exceeds its fair value, an impairment loss shall be recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit.
Markets As discussed further in Part I, Item 1 “Markets”, we are focused on specific target markets which include automotive, defense/aerospace, industrial, life sciences, security as well as both the front-end and back-end of the semiconductor manufacturing industry.
Markets As discussed in “ Part I; Item 1.; Markets, ” we are focused on specific target markets which include both the front-end and back-end of the semiconductor manufacturing, industrial, automotive, life sciences, defense/aerospace and security.
On September 20, 2022, we further amended the Loan Agreement by entering into a Third Amendment to Amended and Restated Loan and Security Agreement (the Loan Agreement as amended by the Third Amendment, the “Amended Loan Agreement”) and the Third Amended and Restated Delayed Draw Term Note 1A.
On September 20, 2022, we further amended the Loan Agreement by entering into a Third Amendment to Amended and Restated Loan and Security Agreement (the Loan Agreement, as amended by the Third Amendment, the “ Amended Loan Agreement ”) and the Third Amended and Restated Delayed Draw Term Note.
We currently expect our cash and cash equivalents, in combination with the borrowing capacity available under our Revolving Facility and the anticipated net cash to be provided by our operations in the next twelve months to be sufficient to support our short-term working capital requirements and other corporate requirements.
We currently expect our cash and cash equivalents, in combination with the borrowing capacity available under our Revolving Facility and the anticipated net cash to be provided by our operations in the next twelve months to be sufficient to support our short-term working capital requirements and other corporate requirements. Our Revolving Facility is discussed in “ Part II; Item 8.
Our indefinite-lived intangible assets were trademarks and trade names carried at $8.4 million at each of December 31, 2023 and 2022, respectively. We did not record any impairment charges related to our indefinite-lived intangible assets during 2023 or 2022.
Our indefinite-lived intangible assets were trademarks and trade names carried at $10.2 million and $8.4 million at December 31, 2024 and 2023, respectively. We did not record any impairment charges related to our indefinite-lived intangible assets during 2024 or 2023.
If any of the significant assumptions were changed, materially different results could occur, which could significantly change the amount of the deferred tax valuation allowance established. At December 31, 2023 and 2022 we had a net deferred tax asset of $1.4 million and $280,000, respectively.
If any of the significant assumptions were changed, materially different results could occur, which could significantly change the amount of the deferred tax valuation allowance established. At December 31, 2024 and 2023, we had a deferred tax asset of $0.5 million and $1.4 million, respectively.
Our Revolving Facility is discussed in Note 10 to our consolidated financial statements in this Report. Our material short-term cash requirements include payments due under our various lease agreements, recurring payroll and benefits obligations to our employees, purchase commitments for materials that we use in the products we sell and principal and interest payments on our debt.
Financial Statements and Supplementary Data; Notes to Consolidated Financial Statements; Note (10) Debt ” of this Report. Our material short-term cash requirements include payments due under our various lease agreements, recurring payroll and benefits obligations to our employees, purchase commitments for materials that we use in the products we sell and principal and interest payments on our debt.
The principal balance of the Revolving Facility and the principal balance of any amount drawn under the Term Note accrues interest based on the Secured Overnight Financing Rate or a bank-defined base rate plus an applicable margin, depending on leverage.
The principal balance of the Revolving Facility and the principal balance of any amount drawn under the Term Note accrues interest based on the secured overnight financing rate for U.S. government securities (“ SOFR ”) or a bank-defined base rate plus an applicable margin, depending on leverage.
See Note 11 to our consolidated financial statements for further detail of the difference between our effective tax rates in 2023 and 2022 and the statutory tax rate of 21%. 28 Liquidity and Capital Resources As discussed more fully in the Overview, our business and results of operations are substantially dependent upon the demand for ATE by semiconductor manufacturers and companies that specialize in the testing of ICs.
Financial Statements and Supplementary Data; Notes to Consolidated Financial Statements; Note (11) Income Taxes ” for further detail of the difference between our effective tax rates in 2024 and 2023 and the statutory tax rate of 21%. 31 Liquidity and Capital Resources As discussed more fully in the Overview, our business and results of operations are substantially dependent upon the demand for ATE by semiconductor manufacturers and companies that specialize in the testing of ICs.
On a quarterly basis, we record income tax expense or benefit based on the expected annualized effective tax rate for the various taxing jurisdictions in which we operate our businesses.
On a quarterly basis, we record income tax expense or benefit based on the expected annualized effective tax rate for the various taxing jurisdictions in which we operate our businesses. See “ Part II; Item 8.
The additional payments will be based on a percent of net invoices for which payments have been received on systems sold to EV or battery customers in excess of CAD $2.5 million per year in each of the five years. There were no payments due to the seller for the years ended December 31, 2022 or 2023.
The additional payments will be based on a percent of net invoices for which payments have been received on systems sold to EV or battery customers in excess of CAD $2.5 million per year in each of the five years.
Cash flows from the sale of inventories are recorded in operating cash flows. On a quarterly basis, we review our inventories and record excess and obsolete inventory charges based upon our established objective excess and obsolete inventory criteria.
Inventory Valuation Inventories are valued at cost on a first-in, first-out basis, not in excess of market value. Cash flows from the sale of inventories are recorded in operating cash flows. On a quarterly basis, we review our inventories and record excess and obsolete inventory charges based upon our established objective excess and obsolete inventory criteria.
Separate discussions and analyses for each segment would be repetitive. The discussion and analysis that follows, therefore, is presented on a consolidated basis and includes discussion of factors unique to a particular operating segment where significant to an understanding of that segment. Year Ended December 31, 2023 Compared to Year Ended December 31, 2022 Revenue.
The discussion and analysis that follows, therefore, is presented on a consolidated basis and includes discussion of factors unique to a particular operating segment where significant to an understanding of that segment. Year Ended December 31, 2024 Compared to Year Ended December 31, 2023 Revenue.
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis of our financial condition and results of operations and quantitative and qualitative disclosures should be read in conjunction with our audited consolidated financial statements and related notes included in this Annual Report on Form 10-K for the year ended December 31, 2023.
Item 7. MANAGEMENT ’ S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis of our financial condition and results of operations and quantitative and qualitative disclosures should be read in conjunction with our audited consolidated financial statements and related notes included in this Report for the year ended December 31, 2024.
During 2023 and 2022, we recorded inventory obsolescence charges for excess and obsolete inventory of $544,000 and $771,000, respectively. Goodwill, Intangible and Long-Lived Assets We account for goodwill and intangible assets in accordance with Accounting Standards Codification ("ASC") Topic 350 (Intangibles- Goodwill and Other).
During 2024 and 2023, we recorded inventory obsolescence charges for excess and obsolete inventory of $0.7 million and $0.5 million, respectively. Goodwill, Intangible and Long-Lived Assets We account for goodwill and intangible assets in accordance with Accounting Standards Codification (“ ASC ”) Topic 350 – Intangibles - Goodwill and Other .
Management's Discussion and Analysis of Financial Condition and Results of Operations contains a number of forward-looking statements that reflect our plans, estimates, and beliefs, all of which are based on our current expectations and could be affected by certain uncertainties, risks, and other factors described under Cautionary Statement Regarding Forward-Looking Statements, Risk Factors, and elsewhere throughout this Annual Report.
Management ’ s Discussion and Analysis of Financial Condition and Results of Operations contains a number of forward-looking statements that reflect our plans, estimates, and beliefs, all of which are based on our current expectations and could be affected by certain uncertainties, risks, and other factors described under “ Cautionary Statement Regarding Forward-Looking Statements ” and “ Part I; Item 1A.
Our obligations under the Amended Loan Agreement are secured by liens on substantially all of our tangible and intangible assets. At December 31, 2023, we were in compliance with all of the covenants included in the Credit Facility. At December 31, 2023, we were in compliance with debt covenants of the Amended Loan Agreement.
Our obligations under the Credit Agreement are secured by liens on substantially all of our tangible and intangible assets that are owned as of the Closing Date or acquired thereafter. At December 31, 2024, we were in compliance with all of the covenants included in the Credit Facility including the debt covenants of the Credit Agreement.
If, as a result of our qualitative assessment, we determine that it is more-likely-than-not that the fair value of the reporting unit is greater than its carrying amounts, the goodwill impairment test is not required.
If, as a result of our qualitative assessment, we determine that it is more-likely-than-not that the fair value of the reporting unit is greater than its carrying amounts, the goodwill impairment test is not required. 34 The quantitative goodwill impairment test, used to identify both the existence of impairment and the amount of impairment loss, compares the fair value of a reporting unit with its carrying amount, including goodwill.
The Loan Agreement includes a $25 million non-revolving delayed draw term note (the “Term Note”) and a $10 million revolving credit facility (the “Revolving Facility and together with the Term Note, the “Credit Facility”).
The Loan Agreement included a $25 million non-revolving delayed draw term note (the “ Term Note ”) and a $10 million revolving credit facility (the “ Revolving Facility ” and together with the Term Note, the “ Credit Facility ”).
Some of these accounting estimates and assumptions are particularly sensitive because of their significance to our consolidated financial statements and because of the possibility that future events affecting them may differ markedly from what had been assumed when the financial statements were prepared. 30 Inventory Valuation Inventories are valued at cost on a first-in, first-out basis, not in excess of market value.
Some of these accounting estimates and assumptions are particularly sensitive because of their significance to our consolidated financial statements and because of the possibility that future events affecting them may differ markedly from what had been assumed when the financial statements were prepared.
Liquidity Our cash and cash equivalents and working capital were as follows (in thousands): December 31, 2023 2022 Cash and cash equivalents $ 45,260 $ 13,434 Working capital $ 61,479 $ 33,182 29 At December 31, 2023, $5.8 million, or 13%, of our cash and cash equivalents was held by our foreign subsidiaries.
Liquidity Our cash and cash equivalents and working capital were as follows: December 31, (in thousands) 2024 2023 Cash and cash equivalents $ 19,830 $ 45,260 Working capital $ 46,864 $ 61,479 At December 31, 2024, $8.6 million, or 44%, of our cash and cash equivalents was held by our foreign subsidiaries.
We did not enter into an interest rate swap agreement with M&T related to this draw. The annual interest rate we expect to pay for this draw under the Term Note is variable. At December 31, 2023, it was approximately 7.4% based on current leverage.
We did not enter into an interest rate swap agreement with M&T related to this draw. The annual interest rate we expect to pay for this draw under the Term Note is variable. At December 31, 2024, it was approximately 6.6% based on current leverage. In connection with our acquisition of Alfamation as discussed in “ Part II; Item 8.
Revenue was $123.3 million for the year ended December 31, 2023 compared to $116.8 million in 2022, an increase of $6.5 million or 6%. We believe this increase reflects the factors previously discussed in the Overview section above. Gross Margin. Gross margin was 46% in each of the years ended December 31, 2023 and 2022.
Revenue was $130.7 million for the year ended December 31, 2024 compared to $123.3 million in 2023, an increase of $7.4 million or 6%. This increase reflects the factors previously discussed in the Revenue section above. Gross Margin. Gross margin was 42% for the year ended December 31, 2024, compared to 46% in 2023.
ASC 820 establishes a fair value hierarchy for instruments measured at fair value that distinguishes between assumptions based on market data (observable inputs) and our own assumptions (unobservable inputs). Our contingent consideration liabilities are measured at fair value on a recurring basis using Level 3 inputs which are inputs that are unobservable and significant to the overall fair value measurement.
Our contingent consideration liabilities are measured at fair value on a recurring basis using Level 3 inputs which are inputs that are unobservable and significant to the overall fair value measurement.
Under the Amended Loan Agreement, the maturity date of the Term Note and Revolving Facility were also extended to September 19, 2027 (the “Contract Period”). At December 31, 2023, we had not borrowed any amounts under the $10 million Revolving Facility. Our borrowings under the Term Note are discussed below and occurred prior to entering into the Amended Loan Agreement.
At December 31, 2024, we had not borrowed any amounts under the $10 million Revolving Facility. Our borrowings under the Term Note are discussed below and occurred prior to entering into the Amended Loan Agreement. Our available funding under the Term Note at December 31, 2024 was $30 million.
On an on-going basis, we evaluate our estimates, including those related to inventories, long-lived assets, goodwill, identifiable intangibles, contingent consideration and deferred income tax valuation allowances.
GAAP requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, expenses and related disclosure of contingent assets and liabilities. On an on-going basis, we evaluate our estimates, including those related to inventories, long-lived assets, goodwill, identifiable intangibles, contingent consideration and deferred income tax valuation allowances.
However, the environment in which we operate is dynamic and shifts rapidly at times, and the success of our efforts to mitigate and address the impacts on our business may not be successful. As a result, we could see increases in our costs or reduced revenues which would impact the level of our earnings in future periods.
However, the environment in which we operate is dynamic and shifts rapidly at times, and the success of our efforts to mitigate and address the impacts on our business may not be successful.
We have three operating segments which are also our reportable segments and reporting units: Electronic Test (which includes our semiconductor test equipment, flying probe and in-circuit testers), Environmental Technologies (which includes our thermal test, process and storage products) and Process Technologies (which includes our induction heating and video imaging products).
We have three operating segments which are also our reportable segments and reporting units: Electronic Test (which includes our semiconductor test equipment, robotics-based electronic test equipment and application support services and functional test equipment for production quality control and product development), Environmental Technologies (which includes our thermal test, process and storage products) and Process Technologies (which includes our induction heating and video imaging products).
At December 31, 2023 and 2022, the contingent consideration liability on our balance sheet was $1.1 million and $1.4 million, respectively. The current portion of this liability at December 31, 2023 and 2022 was $0 and $324,000, respectively, and was included in Other Current Liabilities. Income Taxes The asset and liability method is used in accounting for income taxes.
At December 31, 2024 and 2023, the total contingent consideration liability on our balance sheet was $0.9 million and $1.1 million, respectively. The entire contingent consideration at December 31, 2023 was long-term. Income Taxes The asset and liability method is used in accounting for income taxes.
Management has taken, and will continue to take, such actions it deems appropriate to adjust our strategies, products and operations to counter such shifts in market practices as they become evident. 25 As discussed further in Part I, Item 1 “Overview and Strategy”, although the semi market remains our largest market, as part of our strategy to grow our business, we are focused on several other key target markets where we believe our products address test and process requirements and where we believe there is significant potential for growth.
As discussed “ Part I; Item 1.; Strategy, ” although the semi market remains our largest market, as part of our strategy to grow our business, we are focused on several other key target markets where we believe our products address test and process requirements and where we believe there is significant potential for growth.
Our actual results could differ materially from those discussed in the forward-looking statements or from our prior results. 24 Overview We are a global supplier of innovative test and process solutions for use in manufacturing and testing across a wide range of markets including automotive, defense/aerospace, industrial, life sciences, security and semiconductor.
Overview We are a global supplier of innovative test and process technology solutions for use in manufacturing and testing across a wide range of markets including semi, industrial, automotive, life sciences, defense/aerospace and security.
For the year ended December 31, 2023, we recorded income tax expense of $1.7 million in each of the years ended December 31, 2023 and 2022. Our effective tax rate was 15% for 2023 compared to 17% for 2022.
Income Tax Expense. For the year ended December 31, 2024, we recorded income tax expense of $0.6 million compared to $1.7 million for 2023, a decrease of $1.1 million. This decrease was primarily driven by the decrease in our pre-tax earnings. Our effective tax rate was 16% for 2024 compared to 15% for 2023.
Interest expense for the years ended December 31, 2023 and 2022 was $679,000 and $635,000, respectively.
Interest expense for the years ended December 31, 2024 and 2023 was $0.8 million and $0.7 million, respectively.
Our deferred tax valuation allowance at December 31, 2023 and 2022 was $245,000 and $227,000, respectively.
Our deferred tax valuation allowance at December 31, 2024 and 2023 was $0.3 million and $0.2 million, respectively.
In addition, we incurred higher costs for travel and advertising as we increased the number of customer visits and trade show attendance as we work to continue to grow our business. Engineering and Product Development Expense.
These decreases were partly offset by increased travel costs as we increased the number of customer visits and trade show attendance as we work to continue to grow our business and increased warranty costs. The additional costs attributable to Alfamation™ also offset a portion of the decreases. Engineering and Product Development Expense.
New or Recently Adopted Accounting Standards See Note 2 to the consolidated financial statements for information concerning the implementation and impact of new or recently adopted accounting standards.
Financial Statements and Supplementary Data; Notes to Consolidated Financial Statements; Note (2) Summary of Significant Accounting Policies ” for information concerning the implementation and impact of new or recently adopted accounting standards. Critical Accounting Estimates The preparation of consolidated financial statements in conformity with U.S.
We received net proceeds from the sale of these shares of $19.2 million after payment of commissions of 3.0% of the gross proceeds and other fees related to the sale of these shares. Credit Facility As discussed in Note 10 to our consolidated financial statements in this Report, on October 15, 2021, we entered into the Loan Agreement with M&T.
We received net proceeds from the sale of these shares of $19.2 million after payment of commissions of 3.0% of the gross proceeds and other fees related to the sale of these shares. Credit Facility As discussed in “ Part II; Item 8.
At December 31, 2023 and 2022, finite-lived intangibles and long-lived assets were $16.4 million and $19.1 million, respectively. We did not record any impairment charges related to our long-lived assets during 2023 or 2022. 31 Contingent Consideration Liabilities The contingent consideration liabilities on our balance sheet are accounted for in accordance with the guidance in ASC 820 (Fair Value Measurement).
At December 31, 2024 and 2023, finite-lived intangibles and long-lived assets were $31.4 million and $16.4 million, respectively. We did not record any impairment charges related to our long-lived assets during 2024 or 2023.
The aggregate purchase price was approximately €20 million comprised of approximately €18 million in cash, 187,432 shares of our common stock and an additional approximately €542,000 in cash for assets delivered at closing in excess of agreed upon thresholds. On the closing date, this equated to a total purchase price of approximately $22.4 million.
The aggregate purchase price was approximately €20 million comprised of €18 million in cash (approximately $19.7 million) and 187,432 shares of our common stock (valued at $2.1 million based on the closing price of our stock on the date of acquisition).
Under the Amended Loan Agreement, the maximum loan amount that we may borrow under the Term Note increased from $25 million to $50.5 million, which raises the available funding at December 31, 2023 to $30 million.
Under the Amended Loan Agreement, the maximum loan amount that we may borrow under the Term Note increased from $25 million to $50.5 million. Under the Amended Loan Agreement, the maturity date of the Term Note and Revolving Facility were also extended to September 19, 2027.
The borrowing availability under the Term Note was expanded in September 2022 as discussed above and in Note 10 to our consolidated financial statements in this Report. Cash Flows Operating Activities. Net cash provided by operations for the year ended December 31, 2023 was $16.2 million. For the year ended December 31, 2023, we recorded net earnings of $9.3 million.
The borrowing availability under the Term Note was expanded in September 2022 as discussed above and in “ Part II; Item 8. Financial Statements and Supplementary Data; Notes to Consolidated Financial Statements; Note (10) Debt ” of this Report. 33 Cash Flows Operating Activities.
The maximum payment over the five-year period is capped at CAD $5.0 million, which equates to approximately $3.8 million at December 31, 2023.
There were no payments due to the seller for the years ended December 31, 2023 or 2022, while an immaterial amount is due for 2024 and is recorded as a component of other current liabilities. The maximum payment over the five-year period is capped at CAD $5.0 million, which equates to approximately $3.5 million at December 31, 2024.
Acculogic purchases certain material from a key sole-source supplier in Belarus, which is bordered by Russia to the east and northeast and Ukraine to the south. At present, we are still receiving shipments from this supplier, and we estimate that we have a six-to-nine-month supply of these parts that we are maintaining.
Acculogic purchases certain parts from a key sole-source supplier in Belarus, which is bordered by Russia to the east and northeast and Ukraine to the south. In August 2024, the United States, Canada and the European Union added additional sanctions on Belarus. We have not received materials from this supplier since the issuance of Executive Order 14038.
Please refer to Part I, Item 1A in this Report for further discussion of the risks associated with our business operations, including risks associated with foreign operations. Results of Operations The results of operations for our three operating segments are generally affected by the same factors described in the Overview section above.
Results of Operations The results of operations for our three operating segments are generally affected by the same factors described in the Overview section above. Separate discussions and analyses for each segment would be repetitive.
These declines were partially offset by increases in demand from customers in the industrial and defense/aerospace markets. At December 31, 2023, our backlog of unfilled orders for all products was approximately $40.1 million compared with approximately $46.8 million at December 31, 2022.
At December 31, 2024, our backlog of unfilled orders for all products was approximately $39.5 million compared with approximately $40.1 million at December 31, 2023. The decrease in our backlog reflects reduced demand for our products and, to a lesser extent, lead times returning to a more normalized pattern.
($ in 000s) Years Ended Change 12/31/2023 12/31/2022 $ % Revenue Semi $ 65,735 53.3 % $ 68,422 58.6 % $ (2,687 ) -3.9 % Industrial 14,310 11.6 % 10,038 8.6 % 4,272 42.6 % Automotive/EV 9,895 8.0 % 10,776 9.2 % (881 ) -8.2 % Life Sciences 4,856 3.9 % 4,589 3.9 % 267 5.8 % Defense/Aerospace 12,537 10.2 % 7,006 6.0 % 5,531 78.9 % Security 3,688 3.0 % 3,241 2.8 % 447 13.8 % Other 12,281 10.0 % 12,756 10.9 % (475 ) -3.7 % $ 123,302 100.0 % $ 116,828 100.0 % $ 6,474 5.5 % Total consolidated revenue for the year ended December 31, 2023 was $123.3 million compared to $116.8 million in 2022, an increase of $6.5 million or 6%.
(in thousands except percentages) Years Ended December 31, Change 2024 2023 $ % Revenue Semi $ 48,708 37.3 % $ 65,735 53.3 % $ (17,027 ) -25.9 % Industrial 13,382 10.2 % 14,310 11.6 % (928 ) -6.5 % Automotive/EV 32,871 25.2 % 9,895 8.0 % 22,976 232.2 % Life Sciences 5,400 4.1 % 4,856 3.9 % 544 11.2 % Defense/Aerospace 15,317 11.7 % 12,537 10.2 % 2,780 22.2 % Security 2,946 2.3 % 3,688 3.0 % (742 ) -20.1 % Other 12,066 9.2 % 12,281 10.0 % (215 ) -1.8 % $ 130,690 100.0 % $ 123,302 100.0 % $ 7,388 6.0 % During 2024 our consolidated revenue grew $7.4 million or 6% year over year.
Engineering and product development expense was $7.6 million for the year ended December 31, 2023 compared to $7.5 million in 2022, an increase of $89,000, or 1%, primarily reflecting an increase in materials used in product development projects and fees paid to third parties to assist in our development efforts.
Engineering and product development expense was $8.5 million for the year ended December 31, 2024 compared to $7.6 million in 2023, an increase of $0.9 million, or 12%. This increase is due to the increased payroll and related costs from the additional headcount acquired with Alfamation™.
The increase in revenue for 2023 as compared to 2022 primarily reflects increased demand for our thermal test solutions from customers in the defense/aerospace and industrial markets, and, to a lesser extent, increased demand for our induction heating solutions from customers in the industrial market. These increases were partially offset by declines in demand from the semi market.
We also experienced declines in demand from the security and life sciences markets, as well as other markets we serve. These declines were partially offset by increases in demand from customers in the industrial and defense/aerospace markets.
Selling expense was $17.6 million for the year ended December 31, 2023 compared to $15.9 million in 2022, an increase of $1.7 million or 11%. The increase primarily reflects higher salary and benefits expense, reflecting annual merit adjustments and additional headcount investments, along with higher levels of commission expense as a result of the growth in revenue in 2023.
Selling expense was $17.4 million for the year ended December 31, 2024 compared to $17.6 million in 2023, a decrease of $0.2 million or 1%. The decrease was primarily due to lower commissions, reflecting changes in sales mix and lower third-party costs.
These increases were offset somewhat by a decrease in salary and benefits expense as we had open positions in 2023 that were filled in the comparable prior period. General and Administrative Expense. General and administrative expense was $21.3 million for the year ended December 31, 2023 compared to $19.3 million in 2022, an increase of $2.0 million, or 11%.
General and administrative expense was $26.1 million for the year ended December 31, 2024 compared to $21.3 million in 2023, an increase of $4.8 million, or 22%. Alfamation™ accounted for $4.7 million of the increase, including $0.6 million of amortization of acquired intangible assets.
Revenue The following table sets forth, for the periods indicated, a breakdown of the revenue by market (in thousands).
Properties ” and “ Part II; Item 8. Financial Statements and Supplementary Data; Notes to Consolidated Financial Statements; Note (3) Acquisition, ” in connection with the acquisition, we have entered into a lease agreement with the former owner of Alfamation™. 28 Revenue The following table sets forth, for the periods indicated, a breakdown of the revenue by market (in thousands).
Removed
In connection with the acquisition, we have entered into a lease agreement (the “Lease Agreement”) with the former owner of Alfamation. The Lease Agreement will last for six years starting on March 12, 2024 and will be automatically renewed for the same period of time unless terminated by either party.
Added
Risk Factors ” , and elsewhere throughout this Annual Report. Our actual results could differ materially from those discussed in the forward-looking statements or from our prior results.
Removed
Under the terms of the Lease Agreement, Alfamation will lease warehouse and office space totaling about 51,817 square feet. Alfamation will pay a yearly lease payment of €231,312 broken up into four equal payments. At the date of the signing of the Lease Agreement, the yearly lease payment equated to approximately $253,000.
Added
Management has taken, and will continue to take, such actions it deems appropriate to adjust our strategies, products and operations to counter such shifts in market practices as they become evident.
Removed
While demand from our customers in both the front-end and back-end of the semi market remained strong throughout most of 2023, we experienced declines in revenue from both these sectors of the semi market in the fourth quarter of 2023.
Added
The cash portion of the purchase price was subject to customary working capital adjustments which were finalized in June 2024 and resulted in recording an additional €129 thousand (approximately $141 thousand) of cash purchase price for assets delivered at closing in excess of agreed upon thresholds.
Removed
We attribute these declines to the cyclical slowdown in the semi market which has been impacting this market as a whole for most of 2023 but which had not yet impacted us significantly as certain specific customers to which we sell many of our products in this market had continued to place orders with us.
Added
The liabilities assumed in connection with the acquisition included debt of approximately €10.3 million, or $11.3 million. After all closing adjustments, the total purchase price was $21.9 million. We finalized our allocation of the purchase price to assets acquired and liabilities assumed during the fourth quarter of 2024. As noted in “ Part I; Item 2.
Removed
Given that both orders and backlog are operational measures and our methodology for calculating orders and backlog do not meet the definition of a non-GAAP measure, as that term is defined by the SEC, a quantitative reconciliation for each is not required or provided. 26 The following table sets forth, for the periods indicated, a breakdown of the orders received by market (in thousands).
Added
Alfamation™ contributed $25.0 million in revenue from the date of acquisition, with a significant majority of that in the automotive market and to a lesser extent life sciences. We also experienced increased customer demand in the defense/aerospace market in 2024 compared to 2023. These increases were offset by continued softness in the semi market in 2024.
Removed
Our orders from the semi market decreased $13.8 million, primarily reflecting the aforementioned decline in demand in this market in 2023, which impacted us most significantly in the fourth quarter of the year. We also experienced declines in demand from the security and life sciences markets, as well as other markets we serve.
Added
This reduction in demand, which we began to experience in the fourth quarter of 2023, has been particularly notable with regard to our customers in the front-end market who purchase our induction heating solutions for SiC crystal growth and epitaxial reactors.
Removed
The decrease in our backlog reflects reduced demand for our products and, to a lesser extent, lead times returning to a more normalized pattern. During 2022 our lead times were much longer than they have been historically as global supply chain challenges significantly impacted availability of products for both us and most of our customers.

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