Welcome to the inTEST Corporation’s 2013 Fourth Quarter and Year End Financial Results Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. (Operator Instructions) As a reminder, this conference is being recorded today. A replay will be accessible at www.intest.com. I would now like to turn the call over to Laura Guerrant, inTEST’s Investor Relations consultant. Please go ahead.

Thank you, Camille and thank you for joining us for inTEST’s 2013 fourth quarter and yearend financial results conference call. With us today are Hugh Regan, Treasurer and Chief Financial Officer; Jim Pelrin, Vice President and General Manager of inTEST’s Thermal Products segment; and Dan Graham, Senior Vice President and General Manager of inTEST’s Electrical and Mechanical Products segment. Mr. Regan will briefly review highlights from the fourth quarter, as well as current business trends and then will review inTEST’s detailed financial results and discuss guidance for the first quarter of 2014. We will then have time for any questions. If you have not yet received a copy of today’s release, a copy may be obtained on inTEST’s website at www.intest.com. Before we begin the formal remarks, the company’s attorneys advise that this conference call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements do not convey historical information but relate to predicted or potential future events that are based upon management’s current expectations. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements. Such risks and uncertainties include, but are not limited to, changes in business conditions in the economy, changes in the demand for semiconductors, changes in the rates of and timing of capital expenditures by semiconductor manufacturers, progress of product development programs, increases in raw material and fabrication costs associated with our products and other risk factors set forth from time-to-time in the company’s SEC filings including, but not limited to, inTEST’s periodic reports on Form 10-K and Form 10-Q. The company undertakes no obligation to update the information on today’s conference call to reflect events or circumstances after the date hereof or to reflect the occurrence of anticipated or unanticipated events. And with that, let me now turn the call over to Hugh Regan. Please go ahead, Hugh.

Thank you, Laura. I’d like to welcome everyone to our 2013 fourth quarter and year end results conference call. Before I begin today’s remarks, I want to explain Bob Matthiessen’s absence from the call this afternoon. Bob had surgery this past Friday and is currently recovering and will be back to join us for the next quarterly conference call when we release Q1 2014 results on May 1, 2014. We all wish him a speedy recovery. 2013 was decidedly a challenging year for the back end semiconductor equipment industry, particularly in the second half of the year. Despite this, we delivered solid operating results. As we have said many times, we have structured our business to make money even during challenging times and our operating results mark inTEST’s fourth consecutive year of profitability as well as our 17th consecutive quarter. As forecasted, our orders in the second half of 2013 were stronger by those in the first half by 5%. 2013 gross margin expanded to 48% from 44% a year ago and net earnings for the year of $0.30 per diluted share increased by $0.09 over 2012 net earnings. The industry weakness as well as seasonal softening negatively compounded results for the fourth quarter. Fourth quarter 2013 bookings were $9.3 million compared with third quarter 2013 bookings of $10.4 million and consistent with fourth quarter 2012 bookings. 23% of Q4 ‘13 bookings were derived from non-semiconductor test. Recall that at the end of the second quarter, we have revised the non-semi related historical bookings in revenue figures to include service, which previously had not been included. Q4 net revenues of $9.3 million were at the high end of our guidance range. While they were down compared with the $9.9 million for Q3 2013, they improved $1.1 million over fourth quarter…

Thank you, sir. Ladies and gentlemen, we will now begin the question-and-answer session. (Operator Instructions) Your first question is from the line of Theodore O’Neill with Litchfield Hills Research. Please go ahead. Theodore O’Neill – Litchfield Hills Research: Thanks very much. Hugh, if I just do the math right here, the semi-related revenues had dropped sequentially from Q3 to Q4 and you are guiding to a sort of flattish outlook into Q1, can you talk about what you are seeing on the semiconductor side in terms of activity and do you think that any of these orders are – these orders, any additional businesses waiting for the end of March or it’s just getting pushed into April?

Well, it’s funny Theodore and we have got both Dan Graham and Jim Pelrin on the call who can offer additional comments, but we started the quarter off rather robust. And it’s slowed down a little bit. We are taking somewhat of a pause. As we have said in the past, our bookings are not always linear. They can be lumpy. And we can have either front-end loaded, back-end loaded or all over the place quarter. And that seems to be what’s happening. It slowed down, but the orders that we have had at least in the semi side have been very broad-based from a large number of customers. Another observation would be that customers that historically have been very large for us are not as large for us this year, which provides sort of a better diversification. And Dan and Jim, I don’t know whether you have got any other color that you would like to add?

Only to say that certain non-semi markets, we have seen some recent softness and that’s affected us particularly for production applications in Asia. And that’s definitely affected us.

This is Dan by the way. Theodore O’Neill – Litchfield Hills Research: Okay.

Speaking for the mechanical and electrical sides of our business, in recent years, there has been softness at the end of every year. We believe that’s closed in large part by the increasing percentage of semi chips going into consumer products. And of course, they have to be ready for the Christmas market. So typically, Q4 actually does turn down. Theodore O’Neill – Litchfield Hills Research: Okay. And Hugh, you have mentioned that the on the energy side that OEM Chiller products that yields you would hope to see orders in the second quarter and revenue at year end, does that mean that the most – the revenue really won’t hit until 2015?

No. At this point, we are optimistic that we will have fourth quarter revenues. I think we will be able to guide better on this Theodore as we move through Q2 and beyond and actually receive it the order from the customer. And I think Jim I don’t know whether you have got any further color on that, that you would like to add?

No. I think that’s exactly right.

Okay, alright. Theodore O’Neill – Litchfield Hills Research: Could you talk about the ASPs or the unit volume or both?

Jim, do you want to respond to that question?

Yes. That’s actually a fairly difficult question for us to answer. Theodore O’Neill – Litchfield Hills Research: Okay.

And the reason is that we have just – we just gained formal approval. We are now an approved vendor and we are now just in a position to begin talking with the customers. So we are in the very, very early stages of that and we don’t have a good feel for it. We do know that some of the projects that are involved with the – that are opportunities for us are somewhat slower than expected, because of lots of things going on with nuclear power generation, but we really as you said we really need to wait before we can give you any better information, now that we are talking directly to the customer. Theodore O’Neill – Litchfield Hills Research: Okay, thanks very much.

Thank you. Our next question is from the line of Les Sulewski with Sidoti & Company. Please go ahead. Les Sulewski – Sidoti & Company: Good evening guys. Thank you for taking my questions.

Good evening, Les. Les Sulewski – Sidoti & Company: Hugh, you mentioned some decrease in cost, in the material cost, the manufacturing costs improving gross margin, do you expect 2014 to benefit from that as well?

Well, I think the primary reduction we had almost $1 million reduction in operating expenses year-over-year was driven primarily by the fact that we did not have one-time costs related to the acquisition of Thermonics in our results in ‘13 that we had in ‘12. Clearly, we are not going to have that type of reduction in 2014. To be frank, as you know, as we have described in previous conference calls, we are very focused on acquisition. So to the extent that we have an acquisition occur at some point in 2014 I would expect that we would have again one-time cost related to that acquisition included in our results this year. So you possibly have the strong possibility that operating cost will have to increase in 2014 relative to 2013 because of that. But (indiscernible) acquisition, we expect our operating cost to remain relatively constant relative to where they were in 2013. Les Sulewski – Sidoti & Company: Okay. And on looking at semi, are talks still positive on the recovery?

Well if you look at the earnings releases of others in the ATE space, you see various results in other words I think the market is beginning to open up for all of us just at a different pace for certain of us versus others depending on the customers that you serve and the end-user products that those customers bring to market. Semi is calling; our trade organization is calling for a 20% to 25% increase in the ATE space that this year I think that might be a little optimistic. But I think we would hope to see at least half that level this year and increase if not a little bit more. But – and as we mentioned we quote activity is very strong right now. We did see very strong booking activity earlier in the quarter and we still got a third of the quarter basically less at this point. So I would not be surprised if we were to see that pick up again. Les Sulewski – Sidoti & Company: Thank you. And then shifting to non-semi, is non-semi kind of playing out how you would like, any changes you think that you can implement, what’s your take on the non-semi side?

I’ll say a few words and then I’ll turn it over to Jim. I think one thing that we always remind people as we’re relatively new market entrant in these markets. So I don’t think you can draw significant conclusions from the variability of that percentage quarter-over-quarter for instance it went from approximately 35% to approximately 22%. I don’t know that, that is an indication that we’re losing market share there as much as it’s an indication that the semi orders relative to our regular orders declined to be honest with you. I think that our goal there is to continue to expand our presence in those various verticals outside of semi. And Jim has added some members to his team to help him achieve that goal and continue to work towards doing that. Jim I don’t know whether you’ve got anything else you would add.

Yes. I think that our overall strategy is to – is simple not simply but to gain a wider exposure within the electronic test industry. We suffer from few people knowing about us and knowing what our capabilities are because we grew out of the semi industry. So in the greater electronic test industry we have programs in place that we’re – initiatives that we’re in a process of implementing to really gain some exposure in the industry. Les Sulewski – Sidoti & Company: Alright. And perhaps maybe you can do kind of a brief breakdown on what you’re seeing from each market?

Regarding semi or… Les Sulewski – Sidoti & Company: Not semi, thermal especially.

Maybe Jim what you could do is describe the markets where you see the greatest efforts in the industry…

Sure. Obviously semi is a big component of thermal. Outside of semi the next largest market is in the optical transceiver industry. That – we’re serving production customers where orders typically can be 5, 10, 15 or 20 units. A factory floor could have 100 plus of our tools on the floor. That is a market that we’ve been serving for four or five years now as the fiber optic industry matures they require more and more temperature testing. In fact that’s the market that is primarily in Asia and has slowed a bit, softened a bit because of demand. We’re also active in the automotive industry and but to a lesser extent but also very active in the mil/aerospace. In the mil/aerospace industry we definitely see softness. Military funding is just not what it was. We’re not losing business to anyone but our customers are having trouble finding the funding for certain projects and other projects are just not being awarded. I think that’s it. Les Sulewski – Sidoti & Company: Yes. Thank you for that color. And I appreciate that. One more from me and I’ll get back in the queue. Can you provide us on the update on the off-shoring of the manipulators?

I think as I mentioned in the call we are still in the process of working through certain operational aspects related to doing that. I would expect that a final decision on that will be made at some point in the second quarter concerning timing. These things always take a little longer than I think one originally estimates when we start this process. But Dan I don’t know whether you would have anything you would add at this point to that.

No, I think what you said is correct, Hugh. Basically Les we’re quite familiar with all the countries in which we may want to do this from point of view of their culture and their capabilities and their tax structure and that sort of thing. We’ve zeroed in a couple of countries and we’re in the process of getting detailed quotations from companies there. That’s an ongoing process. And as Hugh said I would expect to have something within the next two to three months. Les Sulewski – Sidoti & Company: Great. Thank you guys.

Yes, Les, I think we can probably come on in that further like I said in the next call. Les Sulewski – Sidoti & Company: No problem. Thank you.

You’re welcome.

(Operator Instructions) Our next question is from the line of Srini Sundararajan with Summit Research. Please go ahead. Srini Sundararajan – Summit Research: Hi guys. Thank you for taking my question.

Hey Srini. Srini Sundararajan – Summit Research: I just – hi. I just want you guys to take a step back and I feel that you guys have lot of intellectual property and assets in different areas. If somebody there to give you the opportunity to have a master plan or to think more ambitiously than you’re doing now? Then where would you or what area would you like to concentrate on more among the areas that you’re concentrating now? And potentially like where could be three to four years from now, so what is the master plan, that’s kind of my question?

Yes. Well I’ll speak for Bob who is in here this evening, who drives the strategy for the company and for the board. Srini Sundararajan – Summit Research: Okay.

Our goal was to try and double our size actually more than double, it get to 100 million in three years Srini. And our goal to do that is through not only organic growth of our existing businesses primarily further expansion into the verticals that we’re expanding into outside of semi. But through at least one if not two strategic acquisitions of businesses that would be oriented towards thermal technology and again with an orientation towards markets outside of semi test to further diversify our revenue stream that with a goal there also of trying to get ourselves to about 50% of our revenues outside of the semi space on a consistent basis. So we’ve reduced some of the cyclical aspect of riding on this roller coaster in the semi business. As far as what particular technologies we’re looking at in thermal area as well as non-thermal technologies I mean we’re – our M&A search is very focused, but we’re looking in some different technologies as well. And we’re looking at public companies as well as private companies. So I think we’re – one thing I can tell you is we’re very focused at this point and active. We’re – we’ve been working with a boutique M&A firm and have recently since January 1 stepped up our activity with this company in evaluating opportunities and seeking them out. And we’re optimistic that we would hope to have some transaction at some point to move forward in 2014. But at this point there is nothing definitive in our pipeline that we can talk about further. Srini Sundararajan – Summit Research: Okay. Just a follow-up like my point was like what mega trend would be – would you guys be trying to follow? Would it be like the digital home or the big data revolution or the internet of things? If you manage to ride on one of these things then you could have the growth that you seek can more, but within your areas do you see some ways by which you can hop on to one of these mega trends that’s going to happen?

I think actually several of these mega trends you mentioned are things that we are looking at as we evaluate opportunities. I don’t know that at this point, we are not fully ready to commit to one or the other. And I would be somewhat reticent to make that statement without my CEO in the room. So I think at this point we will hope on that, but I am happy to raise that issue with him and have that be a focus of our Q1 conference call to discuss where we see those strategies going forward. I can make that commitment to you. Srini Sundararajan – Summit Research: Thank you.

You’re welcome. Srini Sundararajan – Summit Research: And hope that you all have good health.

Well, thank you. We do as well and on that regard the CEO is recovering nicely. We spoke with him earlier today and he looks forward to being back in his seat soon, so. Srini Sundararajan – Summit Research: Great.

Thank you. Our next question is from the line of George Melas with MKH Management. Please go ahead. George Melas – MKH Management: Hi, good afternoon guys.

Hello George, how are you today? George Melas – MKH Management: Very well, thanks. I have a question I think it’s more for Jim. Jim, can you discuss a little bit your go to market strategy on the non-semi thermal side, if you have been able to add a few people and how are you going about both the marketing piece and the sales piece?

Yes, we have added a business development component. That is actually revamping our website. We are actually doing direct marketing to the electronic test industry on several fronts. We have changed our sales channel wherever necessary. At one time we were very highly dependent upon representatives and distributors that were semiconductor related only. They were very semiconductor centric. So over the past couple of years we have changed that sales channel to more general electronic test reps, so that we get better representation and better insight into the general electronic test industry. In addition, we have some things going on that I am really not prepared to talk about in any detail, but in terms of product development that could get us some significant business, not specifically in electronic test but in the process industry. So we have several things going on and with that we have a separate marketing effort, separate from the electronic test marketing effort. So we are putting quite a bit of energy into the marketing channels. George Melas – MKH Management: Okay. Are you somewhat constraint by resources there because – I mean if your sales were a bit higher would you able to put more resources into sales and marketing or are you constrained there because of the results?

Well, I think the answer to that is always yes. But in fact I think we have adequate resources. George Melas – MKH Management: Okay, very good.

Okay. George Melas – MKH Management: Okay, best of luck this year.

Thank you.

Thank you.

(Operator Instructions) Our next question is from the line of Theodore O’Neill with Litchfield Hills Research. Please go ahead. Theodore O’Neill – Litchfield Hills Research: Hi just a follow-up question on the acquisition front. You are on track to almost doubling your cash balance from 2011 to 2014. And so I am wondering is there a sense of urgency in trying to deploy that?

I would say there is a sense of urgency Theodore. I mean cash at December 31 represents 50% of our total assets. So clearly we wish to deploy that cash and as we have publicly discussed in the past on this call as well as in Investor Meetings or conferences that we have attended that have been webcast that we – that’s our primary goal, our Board feels that’s a better use of cash than other capital market allocation strategies such as dividends or stock buybacks. That said, we have recognized that if an acquisition is not completed in a timely basis the Board will look at other capital allocation strategies in the interim. But the goal was to be able to use these funds to grow the top line through the acquisition of additional technologies. Theodore O’Neill – Litchfield Hills Research: Okay, great. Thank you.

You’re welcome.

And there are no further questions at this time. I would now like to turn the call back over to Mr. Regan for closing remarks.

Thank you very much. Thank you for your interest in inTEST and we look forward to updating you on our progress when we report our first quarter results on May 1, 2014. Have a good evening.

Ladies and gentlemen, that does conclude the inTEST Corporation 2013 fourth quarter and yearend financial results conference call. Thank you for your participation. You may now disconnect.