Document And Entity Information - USD ($)	12 Months Ended
Document And Entity Information - USD ($)	Dec. 31, 2018	Mar. 15, 2019	Jun. 30, 2018
Document Information [Line Items]
Entity Registrant Name	INTEST CORP
Entity Central Index Key	0001036262
Trading Symbol	intt
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Entity Emerging Growth Company	false
Entity Small Business	true
Entity Common Stock, Shares Outstanding (in shares)		10,570,258
Entity Public Float			$ 73,323,770
Entity Shell Company	false
Document Type	10-K
Document Period End Date	Dec. 31, 2018
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	FY
Amendment Flag	false

Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Current assets:
Cash and cash equivalents	$ 17,861	$ 13,290
Trade accounts receivable, net of allowance for doubtful accounts of $233 and $213, respectively	10,563	12,166
Inventories	6,520	4,966
Prepaid expenses and other current assets	677	577
Total current assets	35,621	30,999
Property and equipment:
Machinery and equipment	5,166	5,033
Leasehold improvements	2,341	822
Gross property and equipment	7,507	5,855
Less: accumulated depreciation	(4,790)	(4,314)
Net property and equipment	2,717	1,541
Goodwill	13,738	13,738
Intangible assets, net	14,911	16,014
Restricted certificates of deposit	175	175
Other assets	25	26
Total assets	67,187	62,493
Current liabilities:
Accounts payable	1,787	2,032
Accrued wages and benefits	2,921	2,781
Customer deposits and deferred revenue	1,258	886
Domestic and foreign income taxes payable	700	1,199
Earnout payable	12,167	5,355
Other current liabilities	2,585	2,166
Total current liabilities	21,418	14,419
Contingent liability for repayment of state and local grant funds received	200
Federal transition tax payable, net of current portion		436
Deferred tax liabilities	2,689	2,606
Contingent consideration liability, net of current portion		5,744
Total liabilities	24,307	23,205
Commitments and Contingencies (Notes 11 and 13)
Stockholders' equity:
Preferred stock, $0.01 par value; 5,000,000 shares authorized; no shares issued or outstanding
Common stock, $0.01 par value; 20,000,000 shares authorized; 10,523,035 and 10,427,435 shares issued, respectively	105	104
Additional paid-in capital	26,513	25,860
Retained earnings	15,683	12,646
Accumulated other comprehensive earnings	783	882
Treasury stock, at cost; 33,077 shares	(204)	(204)
Total stockholders' equity	42,880	39,288
Total liabilities and stockholders' equity	$ 67,187	$ 62,493

Consolidated Balance Sheets (Parentheticals) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Allowance for doubtful accounts	$ 233	$ 213
Preferred stock par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized (in shares)	5,000,000	5,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	20,000,000	20,000,000
Common stock, shares issued (in shares)	10,523,035	10,427,435
Treasury stock, shares (in shares)	33,077	33,077

Consolidated Statements of Operations - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Net revenues	$ 78,563	$ 66,801
Cost of revenues	39,162	32,111
Gross margin	39,401	34,690
Operating expenses:
Selling expense	9,611	8,108
Engineering and product development expense	4,908	4,301
General and administrative expense	12,801	11,694
Adjustment to contingent consideration liability	6,901	6,976
Total operating expenses	34,221	31,079
Operating income	5,180	3,611
Other income (expense)	(137)	227
Earnings before income tax expense	5,043	3,838
Income tax expense	2,006	2,863
Net earnings	$ 3,037	$ 975
Net earnings per common share – basic (in dollars per share)	$ 0.29	$ 0.09
Weighted average common shares outstanding – basic (in shares)	10,347,947	10,284,572
Net earnings per common share – diluted (in dollars per share)	$ 0.29	$ 0.09
Weighted average common shares and common share equivalents outstanding – diluted (in shares)	10,382,194	10,339,313

Consolidated Statements of Comprehensive Earnings - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Net earnings	$ 3,037	$ 975
Foreign currency translation adjustments	(99)	243
Comprehensive earnings	$ 2,938	$ 1,218

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References + Details

Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	AOCI Attributable to Parent [Member]	Treasury Stock [Member]	Total
Balance (in shares) at Dec. 31, 2016	10,394,018
Balance at Dec. 31, 2016	$ 104	$ 25,578	$ 11,671	$ 639	$ (204)	$ 37,788
Net earnings			975			975
Other comprehensive earnings (loss)				243		243
Amortization of deferred compensation related to stock-based awards		344				344
Issuance of unvested shares of restricted stock (in shares)	66,000
Issuance of unvested shares of restricted stock
Forfeiture of unvested shares of restricted stock (in shares)	(18,700)
Forfeiture of unvested shares of restricted stock
Repurchase and retirement of common stock (in shares)	(13,883)					(13,883)
Repurchase and retirement of common stock		(62)				$ (62)
Balance (in shares) at Dec. 31, 2017	10,427,435					10,427,435
Balance at Dec. 31, 2017	$ 104	25,860	12,646	882	(204)	$ 39,288
Net earnings			3,037			3,037
Other comprehensive earnings (loss)				(99)		(99)
Amortization of deferred compensation related to stock-based awards		654				654
Issuance of unvested shares of restricted stock (in shares)	95,600
Issuance of unvested shares of restricted stock	$ 1	(1)
Repurchase and retirement of common stock (in shares)						0
Repurchase and retirement of common stock						$ (62)
Balance (in shares) at Dec. 31, 2018	10,523,035					10,523,035
Balance at Dec. 31, 2018	$ 105	$ 26,513	$ 15,683	$ 783	$ (204)	$ 42,880

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
CASH FLOWS FROM OPERATING ACTIVITIES
Net earnings	$ 3,037	$ 975
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization	1,871	1,779
Payment of earnout for 2017 related to Ambrell acquisition	(1,710)
Adjustment to earnout payable	12,645	5,355
Adjustment to contingent consideration liability	(5,744)	1,621
Provision for excess and obsolete inventory	285	251
Foreign exchange (gain) loss	165	(146)
Amortization of deferred compensation related to stock-based awards	653	344
Proceeds from sale of demonstration equipment, net of gain	186	152
Loss on disposal of property and equipment	61
Deferred income tax expense (benefit)	83	(1,630)
Changes in assets and liabilities:
Trade accounts receivable	1,414	(2,983)
Inventories	(1,847)	388
Prepaid expenses and other current assets	(102)	(31)
Other assets	1	2
Accounts payable	(245)	(756)
Accrued wages and benefits	143	512
Customer deposits and deferred revenue	376	55
Domestic and foreign income taxes payable	(495)	586
Other current liabilities	419	332
Contingent liability for repayment of state and local grant funds received	200
Federal transition tax payable	(436)	436
Net cash provided by operating activities	10,960	7,242
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of business, net of cash acquired		(21,962)
Payment of earnout for 2017 related to Ambrell acquisition	(4,123)
Purchase of property and equipment	(2,212)	(745)
Proceeds from sale of property and equipment		36
Net cash used in investing activities	(6,335)	(22,671)
CASH FLOWS FROM FINANCING ACTIVITIES
Repurchases of common stock		(62)
Net cash used in financing activities		(62)
Effects of exchange rates on cash	(54)	170
Net cash provided by (used in) all activities	4,571	(15,321)
Cash and cash equivalents at beginning of period	13,290	28,611
Cash and cash equivalents at end of period	17,861	13,290
Cash payments for:
Domestic and foreign income taxes	2,855	3,467
Net cash paid for acquisition		21,962
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
Issuance of unvested shares of restricted stock	788	432
Forfeiture of unvested shares of restricted stock		(104)
Ambrell [Member]
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of business, net of cash acquired		(21,962)
Cash payments for:
Fair value of assets acquired, net of cash		22,652
Liabilities assumed		(8,599)
Goodwill resulting from acquisition		12,032
Contingent consideration		(4,123)
Net cash paid for acquisition		$ 21,962

Note 1 - Nature of Operations

12 Months Ended

Dec. 31, 2018

Notes to Financial Statements

Nature of Operations [Text Block]

(

)

NATURE OF OPERATIONS

We are an independent designer, manufacturer and marketer of thermal management products and semiconductor automated test equipment (“ATE”) interface solutions. Our products are used by semiconductor manufacturers to perform development, qualifying and final testing of integrated circuits (“ICs”) and wafers, and for other electronic testing across a range of industries including the automotive, defense/aerospace, energy, industrial and telecommunications markets. We also offer induction heating products for joining and forming metals in a variety of industrial markets, including automotive, aerospace, machinery, wire & fasteners, medical, semiconductor, food & beverage, and packaging. We manufacture our products in the U.S. Marketing and support activities are conducted worldwide from our facilities in the U.S., Germany, Singapore, the Netherlands and the U.K. The consolidated entity is comprised of inTEST Corporation and our wholly owned subsidiaries. We have

two

reportable segments, which are also our reporting units, Thermal Products ("Thermal") and Electromechanical Semiconductor Products ("EMS").

May 24, 2017,

we completed the acquisition of Ambrell Corporation ("Ambrell"). The acquisition was completed by acquiring all of the outstanding capital stock of Ambrell. Ambrell is a manufacturer of precision induction heating systems, which 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. The Ambrell acquisition complements our current thermal technologies and broadens our diverse customer base, allowing expansion within many non-semiconductor related markets, such as consumer product packaging, fiber-optics, automotive and other markets. Ambrell's operations are included in our Thermal segment. Ambrell manufactures its products in the U.S. and conducts marketing and support activities from its facilities in the U.S., the Netherlands and the U.K. This acquisition is discussed further in Note

The ATE market in which we operate is characterized by rapid technological change, competitive pricing pressures and cyclical as well as seasonal market patterns. This market is subject to significant economic downturns at various times. Our financial results are affected by a wide variety of factors, including, but

not

limited to, general economic conditions worldwide and in the markets in which we operate, economic conditions specific to the ATE market and the other markets we serve, our ability to safeguard patented technology and intellectual property in a rapidly evolving market, downward pricing pressures from customers, and our reliance on a relatively few number of customers for a significant portion of our sales. In addition, we are exposed to the risk of obsolescence of our inventory depending on the mix of future business and technological changes within the markets that we serve. We also continue to implement an acquisition strategy that

may

cause us to incur substantial expense in reviewing and evaluating potential transactions. We

may

not

be successful in locating suitable businesses to acquire. In addition, we

may

not

be able to successfully integrate any business we do acquire with our existing business and we

may

not

be able to operate the acquired business profitably. As a result of these or other factors, we

may

experience significant period-to-period fluctuations in future operating results.

Note 2 - Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2018

Notes to Financial Statements

Significant Accounting Policies [Text Block]

(

)

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation and Use of Estimates

The accompanying consolidated financial statements include our accounts and those of our wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated upon consolidation. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America ("U.S. GAAP") requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Certain of our accounts, including inventories, long-lived assets, goodwill, identifiable intangibles, contingent consideration and deferred tax assets and liabilities including related valuation allowances, are particularly impacted by estimates.

Reclassification

Certain prior year amounts have been reclassified to be comparable with the current year's presentation.

Cash and Cash Equivalents

Short-term investments that have maturities of

three

months or less when purchased are considered to be cash equivalents and are carried at cost, which approximates market value. Our cash balances, which are deposited with highly reputable financial institutions, at times

may

exceed the federally insured limits. We have

not

experienced any losses related to these cash balances and believe the credit risk to be minimal.

Trade Accounts Receivable and Allowance for Doubtful Accounts

Trade accounts receivable are recorded at the invoiced amount and do

not

bear interest. We grant credit to customers and generally require

collateral. To minimize our risk, we perform ongoing credit evaluations of our customers' financial condition. The allowance for doubtful accounts is our best estimate of the amount of probable credit losses in our existing accounts receivable. We determine the allowance based on historical write-off experience and the aging of such receivables, among other factors. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. We do

not

have any off-balance sheet credit exposure related to our customers. We recorded bad debt expense of

$20

and

$68

for the years ended

December 31, 2018

and

2017,

respectively. Cash flows from accounts receivable are recorded in operating cash flows.

Business Combinations

Acquired businesses are accounted for using the purchase method of accounting, which requires that the purchase price be allocated to the net assets acquired at their respective fair values. Any excess of the purchase price over the estimated fair values of the net assets acquired is recorded as goodwill. Fair values of intangible assets are estimated by valuation models prepared by our management and

third

party advisors. The assets purchased and liabilities assumed have been reflected in our consolidated balance sheets, and the operating results are included in the consolidated statements of operations and consolidated statements of cash flows from the date of acquisition. Any change in the fair value of acquisition-related contingent consideration subsequent to the acquisition date, including changes from events after the acquisition date, will be recognized in the consolidated statement of operations in the period of the estimated fair value change. Acquisition-related transaction costs, including legal and accounting fees and other external costs directly related to the acquisition, are recognized separately from the acquisition and expensed as incurred in general and administrative expense in the consolidated statements of operations.

Fair Value of Financial Instruments

Our financial instruments include accounts receivable, accounts payable and our liability for contingent consideration. Our accounts receivable and accounts payable are carried at cost which approximates fair value, due to the short maturities of the accounts. Our liability for contingent consideration is accounted for in accordance with the guidance in Accounting Standards Codification ("ASC")

820

(Fair Value Measurement). 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 liability is measured at fair value on a recurring basis using Level

inputs which are inputs that are unobservable and significant to the overall fair value measurement. These unobservable inputs reflect our assumptions about the inputs that market participants would use in pricing the asset or liability, and are developed based on the best information available in the circumstances. See Note

for further disclosures related to the fair value of our liability for contingent consideration.

Revenue Recognition

As discussed further under “Effect of Recently Adopted Amendments to Authoritative Accounting Guidance” below, effective

January 1, 2018,

we recognize revenue in accordance with the guidance in ASC

606

(Revenue from Contracts with Customers). We recognize revenue for the sale of products or services when our performance obligations under the terms of a contract with a customer are satisfied and control of the product or service has been transferred to the customer. Generally this occurs when we ship a product or perform a service. In certain cases, recognition of revenue is deferred until the product is received by the customer or at some other point in the future when we have determined that we have satisfied our performance obligations under the contract. Our contracts with customers

may

include a combination of products and services, which are generally capable of being distinct and accounted for as separate performance obligations. In addition to the sale of products and services, we also lease certain of our equipment under short-term lease agreements. We recognize revenue from equipment leases on a straight-line basis over the lease term.

Revenue is recorded in an amount that reflects the consideration we expect to receive in exchange for those products or services. We do

not

have any material variable consideration arrangements or any material payment terms with our customers other than standard net

or net

day payment terms. We generally do

not

provide a right of return to our customers. Revenue is recognized net of any taxes collected from customers, which are subsequently remitted to governmental authorities.

Nature of Products and Services

We sell thermal management products and semiconductor ATE interface solutions. Our thermal management products include ThermoStreams, ThermoChambers and process chillers, which we sell under our Temptronic, Sigma and Thermonics product lines, and Ambrell’s precision induction heating systems, including EkoHeat and EasyHeat products. Our semiconductor ATE interface solutions include manipulators, docking hardware and electrical interface products. We provide post-warranty service for the equipment we sell. We sell semiconductor ATE interface solutions and certain thermal management products to the ATE market, which provides automated test equipment to the semiconductor market. We also sell our thermal management products to markets outside the semiconductor market which include the automotive, defense/aerospace, industrial, telecommunications and other markets.

We lease certain of our equipment under short-term leasing agreements with original lease terms of

six

months or less. Our lease agreements do

not

contain purchase options.

Types of Contracts with Customers

Our contracts with customers are generally structured as individual purchase orders which specify the exact products or services being sold or equipment being leased along with the selling price, service fee or monthly lease amount for each individual item on the purchase order. Payment terms and any other customer-specific acceptance criteria are also specified on the purchase order. We generally do

not

have any customer-specific acceptance criteria, other than that the product performs within the agreed upon specifications. We test substantially all products manufactured as part of our quality assurance process to determine that they comply with specifications prior to shipment to a customer.

Contract Balances

We record accounts receivable at the time of invoicing. Accounts receivable, net of the allowance for doubtful accounts, is included in current assets on our balance sheet. To the extent that we do

not

recognize revenue at the same time as we invoice, we record a liability for deferred revenue. In certain instances, we also receive customer deposits in advance of invoicing and recording of accounts receivable. Deferred revenue and customer deposits are included in current liabilities on our consolidated balance sheets.

The allowance for doubtful accounts reflects our best estimate of probable losses inherent in the accounts receivable balance. We determine the allowance based on known troubled accounts, if any, historical experience, and other currently available evidence.

Costs to Obtain a Contract with a Customer

The only costs we incur associated with obtaining contracts with customers are sales commissions that we pay to our internal sales personnel or

third

-party sales representatives. These costs are calculated based on an established percentage of the selling price of each product or service sold. Commissions are considered earned by our internal sales personnel at the time we recognize revenue for a particular transaction. Commissions are considered earned by

third

-party sales representatives at the time that revenue is recognized for a particular transaction. We record commission expense in our consolidated statements of operations at the time the commission is earned. Commissions earned but

not

yet paid are included in current liabilities on our balance sheets.

Product Warranties

In connection with the sale of our products, we generally provide standard

one

two

year product warranties which are detailed in our terms and conditions and communicated to our customers. Our standard warranties are

not

offered for sale separately from our products, therefore there is

not

a separate performance obligation related to our standard warranties. We record estimated warranty expense for our standard warranties at the time of sale based upon historical claims experience. In very limited cases, we offer customers an option to separately purchase an extended warranty for certain of our products. In the case of extended warranties, we recognize revenue in the amount of the sale price for the extended warranty on a straight-line basis over the extended warranty period. We record costs incurred to provide service under an extended warranty at the time the service is provided. Warranty expense is included in selling expense in our consolidated statements of operations.

Refer to Notes

and

for further information about our revenue from contracts with customers.

Inventories

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. These criteria identify material that has

not

been used in a work order during the prior

twelve

months and the quantity of material on hand that is greater than the average annual usage of that material over the prior

three

years. In certain cases, additional excess and obsolete inventory charges are recorded based upon current market conditions, anticipated product life cycles, new product introductions and expected future use of the inventory. The excess and obsolete inventory charges we record establish a new cost basis for the related inventories. We incurred excess and obsolete inventory charges of

$285

and

$251

for the years ended

December 31, 2018

and

2017,

respectively.

Property and Equipment

Machinery and equipment are stated at cost, except for machinery and equipment acquired in a business combination, which are stated at fair value at the time of acquisition. As further discussed below under "Goodwill, Intangible and Long-Lived Assets," machinery and equipment that has been determined to be impaired is written down to its fair value at the time of the impairment. Depreciation is based upon the estimated useful life of the assets using the straight-line method. The estimated useful lives range from

one

ten

years. Leasehold improvements are recorded at cost and amortized over the shorter of the lease term or the estimated useful life of the asset. Total depreciation expense was

$768

and

$618

for the years ended

December 31, 2018

and

2017,

respectively.

Contingent Liability for Repayment of State and Local Grant Funds Received

In connection with Ambrell’s new facility in Rochester, New York, which we occupied in

May 2018,

we entered into agreements with the city of Rochester and the state of New York under which we expect to receive grants totaling

$550

to help offset a portion of the cost of the leasehold improvements we have made to this facility. In exchange for the funds granted to us under these agreements, we are required to create and maintain specified levels of employment in this location through various dates ending in

2023.

If we fail to meet these employment targets, we will be required to repay a proportionate share of the funds received. As of

December 31, 2018,

we have received

$200

in grant funds. We expect to receive the balance of the grant funds during

2019.

We have recorded the amounts received under these agreements as a contingent liability on our balance sheet. As time passes, portions of the funds received will

longer be subject to repayment if we have met the employment requirements of the agreements. Amounts which we are irrevocably entitled to keep will be reclassified to deferred revenue and amortized to income on a straightline basis over the remaining lease term for the Rochester facility.

Goodwill, Intangible and Long-Lived Assets

We account for goodwill and intangible assets in accordance with ASC

350

(Intangibles - Goodwill and Other). Finite-lived intangible assets are amortized over their estimated useful economic life and are carried at cost less accumulated amortization. Goodwill is assessed for impairment annually in the

fourth

quarter on a reporting unit basis, or more frequently when events and circumstances occur indicating that the recorded goodwill

may

be impaired. As a part of the goodwill impairment assessment, we have the option to perform a qualitative assessment to determine whether it is more-likely-than-

not

that the fair value of a reporting unit is less than its carrying amount. If, as a result of our qualitative assessment, we determine this is the case, we are required to perform a goodwill impairment test to identify potential goodwill impairment and measure the amount of goodwill impairment loss to be recognized. The impairment test is discussed below. 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.

In

January 2017,

the FASB issued amendments to the guidance on accounting for goodwill impairment. The amendments simplify the accounting for goodwill impairment by removing step

two

of the goodwill impairment test, which required a hypothetical purchase price allocation. Under the amendments, a goodwill impairment will now be the amount by which a reporting unit's carrying value exceeds its fair value,

not

to exceed the carrying amount of goodwill. The amendments are to be applied prospectively and are effective for us as of

January 1, 2020,

with early application permitted beginning

January 1, 2017.

We implemented this guidance effective with our impairment assessment that was performed in the

fourth

quarter of

2018.

The implementation of these amendments did

not

have any impact on our consolidated financial statements.

As previously mentioned, if we determine it is more-likely-than-

not

that the fair value of a reporting unit is less than its carrying amount as a result of our qualitative assessment, we will perform a quantitative goodwill impairment test. 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. 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. The goodwill impairment assessment is based upon a combination of the income approach, which estimates the fair value of our reporting units based upon a discounted cash flow approach, and the market approach which estimates the fair value of our reporting units based upon comparable market multiples. This fair value is then reconciled to our market capitalization at year end with an appropriate control premium. The determination of the fair value of our reporting units requires management to make significant estimates and assumptions including the selection of appropriate peer group companies, control premiums, discount rate, terminal growth rates, forecasts of revenue and expense growth rates, income tax rates, changes in working capital, depreciation, amortization and capital expenditures. 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.

Indefinite-lived intangible assets are assessed for impairment annually in the

fourth

quarter, or more frequently if events or changes in circumstances indicate that the asset might be impaired. As a part of the impairment assessment, we have the option to perform a qualitative assessment to determine whether it is more likely than

not

that an indefinite-lived intangible asset is impaired. If, as a result of our qualitative assessment, we determine that it is more-likely-than-

not

that the fair value of the indefinite-lived intangible asset is less than its carrying amount, the quantitative impairment test is required; otherwise,

further testing is required. The quantitative impairment test consists of a comparison of the fair value of the intangible asset with its carrying amount. If the carrying amount of the intangible asset exceeds its fair value, an impairment loss is recognized in an amount equal to that excess.

Long-lived assets, which consist of finite-lived intangible assets and property and equipment, 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

longer appropriate. Each impairment test is based on a comparison of the estimated undiscounted cash flows to the recorded value of the asset. If impairment is indicated, the asset is written down to its estimated fair value. The cash flow estimates used to determine the impairment, if any, contain management's best estimates using appropriate assumptions and projections at that time.

Stock-Based Compensation

We account for stock-based compensation in accordance with ASC Topic

718

(Compensation - Stock Compensation) which requires that employee share-based equity awards be accounted for under the fair value method and requires the use of an option pricing model for estimating fair value of stock options, which is then amortized to expense over the service periods. See further disclosures related to our stock-based compensation plans in Note

14.

Subsequent Events

We have made an assessment of our operations and determined that there were

material subsequent events requiring adjustment to, or disclosure in, our consolidated financial statements for the year ended

December 31, 2018.

Engineering and Product Development

Engineering and product development costs, which consist primarily of the salary and related benefits costs of our technical staff, as well as the cost of materials used in product development, are expensed as incurred.

Foreign Currency

For our foreign subsidiaries whose functional currencies are

not

the U.S. dollar, assets and liabilities are translated using the exchange rate in effect at the balance sheet date. The results of operations are translated using an average exchange rate for the period. The effects of rate fluctuations in translating assets and liabilities of these international operations into U.S. dollars are included in accumulated other comprehensive earnings in stockholders' equity. Transaction gains or losses are included in net earnings. For the years ended

December 31, 2018

and

2017,

foreign currency transaction gains (losses) were $(

165

) and

$146,

respectively.

Income Taxes

The asset and liability method is used in accounting for income taxes. Under this method, deferred tax assets and liabilities are recognized for operating loss and tax credit carryforwards and for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. 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. A valuation allowance is recorded to reduce the carrying amounts of deferred tax assets if it is more likely than

not

that such assets will

not

be realized.

On

December 22, 2017,

the President of the United States signed into law the Tax Cuts and Jobs Act (the “Tax Act”). This legislation made significant changes in the U.S. tax laws including reducing the corporate tax rate to

21%

and creating a territorial tax system with a

one

-time mandatory transition tax payable on previously unremitted earnings of foreign subsidiaries, among other things. See Note

for additional information regarding income taxes.

Net Earnings Per Common Share

Net earnings per common share - basic is computed by dividing net earnings by the weighted average number of common shares outstanding during each period. Net earnings per common share - diluted is computed by dividing net earnings by the weighted average number of common shares and common share equivalents outstanding during each period. Common share equivalents represent unvested shares of restricted stock and stock options and are calculated using the treasury stock method. Common share equivalents are excluded from the calculation if their effect is anti-dilutive.

The table below sets forth, for the periods indicated, a reconciliation of weighted average common shares outstanding - basic to weighted average common shares and common share equivalents outstanding - diluted and the average number of potentially dilutive securities that were excluded from the calculation of diluted earnings per share because their effect was anti-dilutive:

	Years Ended December 31,
	2018		2017

Weighted average common shares outstanding–basic		10,347,947		10,284,572
Potentially dilutive securities:
Unvested shares of restricted stock and employee stock options		34,247		54,741
Weighted average common shares and common share equivalents outstanding–diluted		10,382,194		10,339,313
Average number of potentially dilutive securities excluded from calculation		216,420		77,047

Effect of Recently Adopted Amendments to Authoritative Accounting Guidance

May 2017,

the FASB issued amendments to the guidance on accounting for a change to the terms or conditions (modification) of a share-based payment award. The amendments provide that an entity should account for the effects of a modification unless the fair value and vesting conditions of the modified award and the classification of the modified award (equity or liability instrument) are the same as the original award immediately before the modification. The amendments were effective for us as of

January 1, 2018.

The amendments will be applied prospectively to an award modified on or after the adoption date. The implementation of these amendments did

not

have any impact on our consolidated financial statements.

In

January 2017,

the FASB issued amendments to the guidance on accounting for goodwill impairment. As previously discussed, the amendments simplify the accounting for goodwill impairment by removing step

two

of the goodwill impairment test, which required a hypothetical purchase price allocation. As permitted, we applied this new guidance for our goodwill impairment assessment completed during the

fourth

quarter of

2018.

The implementation of these amendments did

not

have any impact on our consolidated financial statements.

In

January 2017,

the FASB issued amendments to clarify the current guidance on the definition of a business. The objective of the amendments is to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The amendments were effective for us as of

January 1, 2018.

The implementation of these amendments did

not

have any impact on our consolidated financial statements. The amendments will be considered prospectively on future acquisitions.

November 2016,

the FASB issued amendments to the guidance on presentation of restricted cash within the statement of cash flows. The amendments require that restricted cash be included within cash and cash equivalents on the statement of cash flows. The amendments were effective for us as of

January 1, 2018,

and have been applied retrospectively. The implementation of these amendments did

not

have any impact on our consolidated financial statements.

May 2014,

the FASB issued new guidance on the recognition of revenue from contracts with customers. This new guidance is presented in ASC

606

and replaced most existing revenue recognition guidance in U.S. GAAP when it became effective. In

August 2015,

the FASB deferred the effective date of this new guidance for

one

additional year. As a result, this new guidance was effective for us as of

January 1, 2018.

As previously discussed, we implemented this new guidance on

January 1, 2018

using the cumulative effect transition method. However, we did

not

have a cumulative adjustment to retained earnings to record as of the transition date as this new guidance did

not

have a significant impact on the timing or amount of revenue we recognized in any given period in comparison to the amount recognized under prior guidance.

Effect of Recently Issued Amendments to Authoritative Accounting Guidance

February 2016,

the FASB issued amendments to the current guidance on accounting for lease transactions, which is presented in ASC Topic

842

(Leases). Subsequent to

February 2016,

the FASB has issued additional clarifying guidance on certain aspects of this new guidance, along with certain practical expedients that

may

be applied. The intent of the updated guidance is to increase transparency and comparability among organizations by requiring lessees to recognize assets and liabilities on the balance sheet for the rights and obligations created by leases and to disclose key information about leasing arrangements. Under the new guidance, a lessee will be required to record a right-of-use asset and a lease liability on the balance sheet for all leases with terms longer than

months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. The amendments are effective for us as of

January 1, 2019.

The

two

permitted transition methods under the guidance are the modified retrospective transition approach, which requires application of the guidance for all comparative periods presented, and the cumulative effect adjustment approach, which requires prospective application at the adoption date.

We will adopt the amendments on

January 1, 2019

using the cumulative effect adjustment approach. Accordingly, prior periods will

not

be restated. The implementation of this new guidance will have a significant impact on our consolidated balance sheet as a result of recording right-of-use assets and lease liabilities for all of our multi-year leases. Under current guidance,

none

of these leases has any related asset recorded on our balance sheets. The only related liability currently recorded on our balance sheets is the amount which represents the difference between the lease payments we have made and the straightline rent expense we have recorded in our statements of operations. At

December 31, 2018,

that liability was

$380

and is included in Other Current Liabilities on our balance sheet. At

January 1, 2019,

we expect to record an increase in total assets and liabilities of approximately

$4,873

as a result of the implementation of this new guidance. We do

not

expect that the implementation of this new guidance will have a significant impact on our pattern of expense recognition for any of our multi-year leases.

Note 3 - Acquisition

12 Months Ended

Dec. 31, 2018

Notes to Financial Statements

Business Combination Disclosure [Text Block]

(

)

ACQUISITION

May 24, 2017,

we completed our acquisition of Ambrell. The purchase price for Ambrell was

$22,000

in cash paid at closing, subject to a customary post-closing working capital adjustment, and additional contingent consideration of up to

$18,000

in the form of earnouts paid based upon a multiple of adjusted EBITDA for

2017

and

2018,

as further discussed below. The acquisition was completed by acquiring all of the outstanding capital stock of Ambrell. Total acquisition costs incurred to complete this transaction were

$935.

Acquisition costs were expensed as incurred and included in general and administrative expense.

The acquisition of Ambrell has been accounted for as a business combination using purchase accounting and, accordingly, the results of Ambrell have been included in our consolidated results of operations from the date of acquisition. The allocation of the Ambrell purchase price was based on fair values as of

May 24, 2017.

The determination of fair value reflects our estimates and assumptions based on the information available as of the date the estimate is calculated.

The excess of the purchase price over the identifiable intangible and net tangible assets was allocated to goodwill and is

not

deductible for tax purposes. Goodwill is attributed to synergies that are expected to result from the operations of the combined businesses.

The total purchase price of

$26,733

was comprised of:

Cash paid to acquire the capital stock of Ambrell	$	22,610
Estimated fair value of contingent consideration		4,123

Total purchase price	$	26,733

As noted above, the consideration paid for the acquisition of Ambrell includes contingent consideration in the form of earnouts based on the adjusted EBITDA of Ambrell for

2017

and

2018.

Adjusted EBITDA is earnings (or loss) from operations before interest expense, benefit or provision for income taxes, depreciation and amortization, and excludes other non-recurring income and expense items as defined in the stock purchase agreement for Ambrell. The

first

earnout paid after calendar year

2017

was completed was an amount equal to

Ambrell's adjusted EBITDA for

2017

minus the

$22,000

paid at closing. This amount was

$5,833

and was paid in

April 2018.

The

second

earnout to be paid after calendar year

2018

is completed, will be an amount equal to

Ambrell's adjusted EBITDA for

2018

minus the sum of the

$22,000

paid at closing and

$5,833,

the earnout paid with respect to

2017.

The

2017

and

2018

earnouts, in the aggregate, are capped at

$18,000.

December 31, 2018,

we have accrued

$12,167

as additional acquisition consideration payable on our balance sheet representing the amount of the

second

earnout. To estimate the fair value of the contingent consideration, an option based income approach using a Monte Carlo simulation model was utilized due to the non-linear payout structure. As of the acquisition date, this resulted in an estimated fair value of

$4,123

for the

2017

and

2018

earnouts. This amount was recorded as a contingent consideration liability and included in the purchase price as of the acquisition date. Changes in the amount of the estimated fair value of the earnouts after the acquisition date were recorded as operating expenses in our statement of operations in the quarter in which they occurred.

The total purchase price of

$26,733

has been allocated as follows:

Goodwill	$	12,032
Identifiable intangible assets		16,300
Tangible assets acquired and liabilities assumed:
Cash		648
Trade accounts receivable		3,621
Inventories		1,917
Other current assets		200
Property and equipment		614
Accounts payable		(1,420	)
Accrued expenses		(1,280	)
Customer advances		(554	)
Deferred tax liability		(5,345	)

Total purchase price	$	26,733

We estimated the fair value of identifiable intangible assets acquired using a combination of the income, cost and market approaches. Identifiable intangible assets acquired include customer relationships, customer backlog, technology and trademarks. We generally amortize our finite-lived intangible assets over their estimated useful lives on a straight-line basis, unless an alternate amortization method can be reliably determined. Any such alternate amortization method would be based on the pattern in which the economic benefits of the intangible asset are expected to be consumed.

The following table summarizes the estimated fair value of Ambrell's identifiable intangible assets and their estimated useful lives as of the acquisition date:

	Fair Value		Weighted Average Estimated Useful Life
			(in years)
Finite-lived intangible assets:
Customer relationships	$	9,000		9.0
Technology		600		9.0
Customer backlog		500		0.3
Total finite-lived intangible assets		10,100		8.6
Indefinite-lived intangible assets:
Trademarks		6,200
Total intangible assets	$	16,300

For the period from

May 24, 2017

December 31, 2017,

Ambrell contributed

$13,562

of net revenues and had a net loss of

$6,238,

which includes the impact of a

$6,976

increase in the amount of our contingent consideration liability from the date of acquisition through

December 31, 2017.

During

2018,

Ambrell contributed

$26,446

of net revenues and had a net loss of

$5,162,

which includes the impact of a

$6,901

increase in the amount of our contingent consideration liability during

2018.

The following unaudited pro forma information gives effect to the acquisition of Ambrell as if the acquisition occurred on

January 1, 2017.

This proforma summary does

not

reflect any operating efficiencies or costs savings that

may

be achieved by the combined businesses. This proforma summary is presented for informational purposes only and is

not

necessarily indicative of what the actual results of operations would have been had the acquisition taken place as of that date, nor is it indicative of future consolidated results of operations:

	Year Ended December 31, 2017
Net revenues	$	74,421
Net earnings	$	1,593
Diluted earnings per share	$	0.15

The pro forma results shown above do

not

reflect the impact on general and administrative expense of investment advisory costs, legal costs and other costs of

$935

incurred by us as a direct result of the transaction. The pro forma results shown above include a

$6,976

increase in the amount of our contingent consideration liability which we recorded during the

second

half of

2017.

Note 4 - Fair Value Measurements

12 Months Ended

Dec. 31, 2018

Notes to Financial Statements

Fair Value Disclosures [Text Block]

(

)

FAIR VALUE MEASUREMENTS

ASC Topic

820

(Fair Value Measurement) 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). Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent of us. Unobservable inputs are inputs that reflect our assumptions about the inputs that market participants would use in pricing the asset or liability, and are developed based on the best information available in the circumstances.

ASC

820

identifies fair value as the exchange price, or exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As a basis for considering market participant assumptions in fair value measurements, ASC

820

establishes a

three

-tier fair value hierarchy that distinguishes among the following:

	Level 1	Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that we have the ability to access.

	Level 2	Valuations based on quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active and models for which all significant inputs are observable, either directly or indirectly.

	Level 3	Valuations based on inputs that are unobservable and significant to the overall fair value measurement.

To the extent that the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by us in determining fair value is greatest for instruments categorized in Level

A financial instrument's level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.

Recurring Fair Value Measurements

The contingent consideration liability on our balance sheets is measured at fair value on a recurring basis using Level

inputs. Our contingent consideration liability is a result of our acquisition of Ambrell on

May 24, 2017,

and it represents the estimated fair value of the additional cash consideration payable that is contingent upon the achievement of certain financial results by Ambrell, as discussed more fully in Note

Estimating the fair value of this Level

instrument involves generating various scenarios for projected adjusted EBITDA over a specified time period, calculating the associated contingent consideration payments and discounting the average payments to present value. Changes in the projected adjusted EBITDA of Ambrell can result in significant fluctuations in the estimated fair value of this liability during interim periods.

During the

second

half of

2017,

we recorded a

$6,976

increase in the fair value of our contingent consideration liability. This increase primarily reflected higher actual adjusted EBITDA for the year ended

December 31, 2017,

as a result of significantly higher than expected levels of net revenues and EBITDA in the

fourth

quarter of

2017,

and an increase in the projected adjusted EBITDA for the year ended

December 31, 2018.

December 31, 2017,

our forecasts for both

2018

net revenues and

2018

EBITDA significantly exceeded the amounts projected as of the acquisition date.

During

2018,

we recorded a

$6,901

increase in the fair value of our contingent consideration liability as a result of further increases in the actual adjusted EBITDA of Ambrell for the year ended

December 31, 2018.

The following fair value hierarchy table presents information about liabilities measured at fair value on a recurring basis:

	Amounts at		Fair Value Measurement Using
	Fair Value		Level 1		Level 2		Level 3
As of December 31, 2017
Contingent consideration liability	$	5,744	$	-	$	-	$	5,744

Changes in the fair value of our Level

contingent consideration liability for the years ended

December

31,

2018

and

2017

were as follows:

Balance – January 1, 2017	$	-
Contingent consideration liability established in connection with the acquisition of Ambrell		4,123
Fair value adjustment		6,976
Transfer of contingent consideration liability to 2017 earnout payable		(5,355	)

Balance – December 31, 2017		5,744
Fair value adjustment		6,901
Transfer of contingent consideration liability to 2018 earnout payable		(12,645	)

Balance – December 31, 2018	$	-

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Note 5 - Goodwill and Intangible Assets

12 Months Ended

Dec. 31, 2018

Notes to Financial Statements

Goodwill and Intangible Assets Disclosure [Text Block]

(

)

GOODWILL AND INTANGIBLE ASSETS

Goodwill and intangible assets on our balance sheets are the result of our acquisitions of Sigma Systems Corp. ("Sigma") in

October 2008,

Thermonics, Inc. ("Thermonics") in

January 2012

and Ambrell in

May 2017.

All of our goodwill and intangible assets are allocated to our Thermal segment.

Goodwill

Goodwill totaled

$13,738

at both

December 31, 2018

and

2017

and was comprised of the following:

Sigma	$	1,656
Thermonics		50
Ambrell		12,032
Total	$	13,738

Intangible Assets

Changes in the amount of the carrying value of finite-lived intangible assets for the years ended

December 31, 2018

and

2017

are as follows:

Balance - January 1, 2017	$	365
Acquisition of Ambrell		10,100
Amortization		(1,161	)
Balance - December 31, 2017		9,304
Amortization		(1,103	)
Balance - December 31, 2018	$	8,201

The following tables provide further detail about our intangible assets as of

December 31, 2018

and

2017:

	December 31, 2018
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Finite-lived intangible assets:
Customer relationships	$	10,480	$	2,717	$	7,763
Technology		600		250		350
Patents		590		502		88
Software		270		270		-
Trade name		140		140		-
Customer backlog		500		500		-
Total finite-lived intangible assets		12,580		4,379		8,201
Indefinite-lived intangible assets:
Trademarks		6,710		-		6,710
Total intangible assets	$	19,290	$	4,379	$	14,911

	December 31, 2017
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Finite-lived intangible assets:
Customer relationships	$	10,480	$	1,828	$	8,652
Technology		600		95		505
Patents		590		463		127
Software		270		250		20
Trade name		140		140		-
Customer backlog		500		500		-
Total finite-lived intangible assets		12,580		3,276		9,304
Indefinite-lived intangible assets:
Trademarks		6,710		-		6,710
Total intangible assets	$	19,290	$	3,276	$	16,014

We generally amortize our finite-lived intangible assets over their estimated useful lives on a straight-line basis, unless an alternate amortization method can be reliably determined. Any such alternate amortization method would be based on the pattern in which the economic benefits of the intangible asset are expected to be consumed.

None

of our intangible assets have any residual value.

Total amortization expense for our finite-lived intangible assets was

$1,103

and

$1,161,

respectively, for the years ended

December 31, 2018

and

2017.

The following table sets forth the estimated annual amortization expense for each of the next

five

years:

2019	$	1,257
2020	$	1,233
2021	$	1,227
2022	$	1,167
2023	$	1,067

Impairment of Goodwill and Indefinite Life Intangible Assets

During

December 2018

and

2017,

we assessed our goodwill and indefinite life intangible asset for impairment in accordance with the requirements of ASC

350

using a quantitative approach. Our goodwill impairment assessment is based upon a combination of the income approach, which estimates the fair value of our reporting units based upon a discounted cash flow approach, and the market approach which estimates the fair value of our reporting units based upon comparable market multiples. This fair value is then reconciled to our market capitalization at year end with an appropriate control premium. The discount rates used in

2018

and

2017

for the discounted cash flows were

18.5%

and

14.5%,

respectively. The selection of these rates was based upon our analysis of market based estimates of capital costs and discount rates. The peer companies used in the market approach operate in our market segment. The determination of the fair value of our reporting units requires management to make significant estimates and assumptions including the selection of appropriate peer group companies, control premiums, discount rate, terminal growth rates, forecasts of revenue and expense growth rates, income tax rates, changes in working capital, depreciation, amortization and capital expenditures. 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.

During the goodwill impairment assessment in both

2018

and

2017,

we compared the fair value of our Thermal reporting unit with its carrying value. This assessment indicated

impairment existed as the fair value of the reporting unit exceeded its carrying value in both

2018

and

2017.

During the indefinite life intangible asset impairment assessment in both

2018

and

2017,

we compared the fair value of our intangible assets with their carrying values. This assessment indicated

impairment existed as the fair value of the intangible assets exceeded their carrying values in both

2018

and

2017.

Impairment of Long-Lived Assets and Finite-lived Intangible Assets

During

2018

and

2017,

we did

not

review any of our long lived assets for impairment as there were

events or changes in business circumstances that would indicate an impairment might exist.

Note 6 - Revenue From Contracts With Customers

12 Months Ended

Dec. 31, 2018

Notes to Financial Statements

Revenue from Contract with Customer [Text Block]

(

)

REVENUE FROM CONTRACTS WITH CUSTOMERS

The following tables provide additional information about our revenue from contracts with customers, including revenue by customer and product type and revenue by market. See also Note

for information about revenue by operating segment and geographic region.

	Years Ended December 31,
	2018		2017
Net revenues by customer type:
End user	$	68,093	$	60,731
OEM/Integrator		10,470		6,070
	$	78,563	$	66,801
Net revenues by product type:
Thermal test	$	25,289	$	24,657
Induction heating		24,104		11,915
Semiconductor production test		21,445		22,952
Service/other		7,725		7,277
	$	78,563	$	66,801
Net revenues by market:
Semiconductor	$	45,378	$	37,763
Industrial		21,220		14,148
Telecommunications		5,574		10,262
Other non-semiconductor markets		6,391		4,628
	$	78,563	$	66,801

Changes in the amount of the allowance for doubtful accounts for the years ended

December 31, 2018

and

2017

are as follows:

Balance - January 1, 2017	$	146
Bad debt expense		68
Write-offs		(1	)
Balance - December 31, 2017		213
Bad debt expense		20
Write-offs		-
Balance - December 31, 2018	$	233

Note 10 - Debt

12 Months Ended

Dec. 31, 2018

Notes to Financial Statements

Debt Disclosure [Text Block]

(

)

DEBT

Letters of Credit

We have issued letters of credit as the security deposits for certain of our domestic leases. These letters of credit are secured by pledged certificates of deposit which are classified as Restricted Certificates of Deposit on our balance sheets. The terms of our leases require us to renew these letters of credit at least

days prior to their expiration dates for successive terms of

not

less than

one

year until lease expiration. In accordance with the terms of our lease, the letter of credit related to our facility in Mt. Laurel, New Jersey will be reduced from

$125

$90

April 1, 2019.

Our outstanding letters of credit at

December 31, 2018

and

2017

consisted of the following:

L/C

Lease

Letters of Credit
Amount Outstanding

Facility

Original L/C
Issue Date

Expiration
Date

Dec. 31
2018

Dec. 31
2017

Mt. Laurel, NJ

3/29/2010

3/31/2020

4/30/2021

125

Mansfield, MA

10/27/2010

11/08/2019

8/31/2021

175

Note 11 - Commitments and Contingencies

12 Months Ended

Dec. 31, 2018

Notes to Financial Statements

Commitments and Contingencies Disclosure [Text Block]

(

)

COMMITMENTS AND CONTINGENCIES

Operating Lease Commitments

We lease our offices, warehouse facilities and certain equipment under non-cancellable operating leases which expire at various dates through

2029.

Total rental expense for the years ended

December 31, 2018

and

2017

was

$1,848

and

$1,600,

respectively. Certain of our operating leases contain predetermined fixed escalations of minimum rentals and rent holidays during the original lease terms. Rent holidays are periods during which we have control of the leased facility but are

not

obligated to pay rent. For these leases, we recognize the related rental expense on a straight-line basis over the life of the lease, which includes any rent holiday, and record the difference between the amounts charged to operations and amounts paid as Other Current Liabilities on our balance sheet. In addition to the monthly rental payments due, most of our leases for our offices and warehouse facilities require us to pay our portion of the common area maintenance, property taxes and insurance charges incurred by the landlord for the facilities which we occupy. These amounts are

not

included in the minimum rental commitments disclosed below as they are based on actual charges incurred in the periods to which they apply.

The aggregate minimum rental commitments under the non-cancellable operating leases in effect at

December 31, 2018

are as follows:

2019	$	1,710
2020		1,612
2021		868
2022		296
2023		286
Thereafter		1,421
Total	$	6.193

Note 12 - Income Taxes

12 Months Ended

Dec. 31, 2018

Notes to Financial Statements

Income Tax Disclosure [Text Block]

(

)

INCOME TAXES

We are subject to Federal and certain state income taxes. In addition, we are taxed in certain foreign countries.

As previously discussed in Note

December 22, 2017

the President of the United States signed into law the Tax Act. The

two

principal elements of the Tax Act impacting our

2018

and

2017

consolidated statement of operations and our balance sheet as of

December 31, 2018

and

2017

were the reduction in the corporate tax rate from

35%

21%

and the

one

-time transition tax that is imposed on the previously unremitted earnings of our foreign subsidiaries. As a result of the legislative changes enacted, we were required to revalue our deferred tax assets and liabilities to the new rate of

21%

as of

December 31, 2017,

which resulted in our recording a current period tax benefit of

$1,743

in our

2017

consolidated statement of operations and a corresponding reduction in the amount of the net deferred tax liability. Due to the complexities involved in determining the previously unremitted earnings of our foreign subsidiaries, at

December 31, 2017,

we recorded a provisional amount for the transition tax payable on those unremitted earnings. The provisional amount recorded, net of related foreign tax credits, was a tax of

$476.

During the

first

half of

2018

we completed the process of obtaining, preparing and analyzing the required information, including a Section

965

analysis and an earnings and profits study. As a result, we have determined that

transition tax is due, and, accordingly, during the

second

quarter of

2018

we reversed the

$476

that had been accrued in the

fourth

quarter of

2017.

Earnings before income taxes was as follows:

	Years Ended December 31,
	2018		2017
Domestic	$	3,647	$	2,580
Foreign		1,396		1,258
Total	$	5,043	$	3,838

Income tax expense (benefit) was as follows:

	Years Ended December 31,
	2018			2017
Current
Domestic – Federal	$	1,352		$	4,106
Domestic – state		190			175
Foreign		381			212
Total	$	1,923		$	4,493
Deferred
Domestic – Federal	$	103		$	(1,886	)
Domestic – state		(20	)		244
Foreign		-			12
Total		83			(1,630	)
Income tax expense	$	2,006		$	2,863

Deferred income taxes reflect the net tax effect of net operating loss and tax credit carryforwards as well as temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The following is a summary of the significant components of our deferred tax assets and liabilities as of

December 31, 2018

and

2017:

	December 31,
	2018			2017
Deferred tax assets:
Net operating loss (state and foreign)	$	299		$	444
Inventories		212			185
Accrued vacation pay and stock-based compensation		184			156
Tax credit carryforwards		81			206
Depreciation of property and equipment		-			97
Allowance for doubtful accounts		46			47
Accrued warranty		20			20
Acquisition costs		13			15
Other		18			15
Total		873			1,185
Valuation allowance		(241	)		(370	)
Deferred tax assets		632			815
Deferred tax liabilities:
Net intangible assets		(3,167	)		(3,421	)
Depreciation of property and equipment		(154	)		-
Deferred tax liabilities		(3,321	)		(3,421	)
Net deferred tax liabilities	$	(2,689	)	$	(2,606	)

The net change in the valuation allowance for the years ended

December 31, 2018

and

2017

was a decrease of

$129

and an increase of

$370,

respectively. In assessing the ability to realize the deferred tax assets, we consider whether it is more likely than

not

that some portion or all of the deferred tax assets will

not

be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during periods in which those temporary differences become deductible. We consider the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. In order to fully realize the total deferred tax assets, we will need to generate future taxable income prior to the expiration of net operating loss and tax credit carryforwards which expire in various years through

2038.

An analysis of the effective tax rate for the years ended

December 31, 2018

and

2017

and a reconciliation from the expected statutory rate of

21%

(for

2018

) and

35%

(for

2017

) is as follows:

	Years Ended December 31,
	2018			2017
Expected income tax provision at U.S. statutory rate	$	1,059		$	1,343
Increase (decrease) in tax from:
Nondeductible expenses		1,466			2,463
Domestic tax expense, net of Federal benefit		310			791
Deemed dividend from foreign subsidiaries		175			423
NOL carryforwards utilized		118			36
Foreign income tax rate differences		90			(229	)
Restricted stock		67			(59	)
Global intangible low taxed income		57			-
Current year tax credits (foreign and research)		(553	)		(379	)
Federal transition tax payable		(476	)		476
Section 250 foreign derived intangible income deduction		(233	)		-
Changes in valuation allowance		(129	)		17
Federal tax rate changes		-			(1,843	)
Domestic production activities deduction		-			(290	)
Acquisition costs		-			142
Other		55			(28	)
Income tax expense	$	2,006		$	2,863

In accounting for income taxes, we follow the guidance in ASC Topic

740

(Income Taxes) regarding the recognition and measurement of uncertain tax positions in our financial statements. Recognition involves a determination of whether it is more likely than

not

that a tax position will be sustained upon examination with the presumption that the tax position will be examined by the appropriate taxing authority having full knowledge of all relevant information. Our policy is to record interest and penalties associated with unrecognized tax benefits as additional income taxes in the statement of operations. As of

December 31, 2018

and

2017,

we did

not

have an accrual for uncertain tax positions.

Note 14 - Stock-based Compensation Plan

12 Months Ended

Dec. 31, 2018

Notes to Financial Statements

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

(

)

STOCK-BASED COMPENSATION PLAN

As of

December 31, 2018,

we have unvested restricted stock awards and stock options outstanding which were granted under the inTEST Corporation

2007

Stock Plan (the

"2007

Stock Plan") and the inTEST Corporation Amended and Restated

2014

Stock Plan (the

"2014

Stock Plan"). The

2007

Stock Plan was approved at our annual meeting of stockholders held on

June 13, 2007

and permitted the granting of stock options or restricted stock for up to

500,000

shares of our common stock to officers, other key employees and consultants.

further grants

may

be made under the

2007

Stock Plan. The

2014

Stock Plan was originally approved at our annual meeting of stockholders held on

June 25, 2014

and permits the granting of stock options, restricted stock, stock appreciation rights or restricted stock units for up to

500,000

shares of our common stock to directors, officers, other key employees and consultants. On

June 27, 2018,

our stockholders approved the amendment and restatement of the

2014

Stock Plan to increase the number of shares of common stock that

may

be delivered pursuant to awards granted under the

2014

Stock Plan from

500,000

1,000,000

shares. As of

December 31, 2018,

there were

561,600

aggregate shares available to grant under these plans.

Our unvested restricted stock awards and stock options are accounted for based on their grant date fair value. As of

December

31,

2018,

total compensation expense to be recognized in future periods was

$1,253.

The weighted average period over which this expense is expected to be recognized is

2.9

years.

The following table summarizes the compensation expense we recorded during

2018

and

2017,

related to unvested shares of restricted stock and stock options.

	Years Ended December 31,
	2018		2017
Cost of revenues	$	-	$	6
Selling expense		-		-
Engineering and product development expense		9		5
General and administrative expense		645		333
	$	654	$	344

There was

compensation expense capitalized in

2018

2017.

Stock Options

We record compensation expense for stock options based on the fair market value of the options as of the grant date.

option

may

be granted with an exercise period in excess of

ten

years from the date of grant. Generally, stock options will be granted with an exercise price equal to the fair market value of our stock on the date of grant and will vest over

four

years.

The fair value for stock options granted during

2018

and

2017

was estimated at the date of grant using the Black-Scholes option pricing model with the following weighted average assumptions:

	2018			2017
Risk-free interest rate		2.75	%		2.14	%
Dividend yield		0.00	%		0.00	%
Expected common stock market price volatility factor		.39			.39
Weighted average expected life of stock options (years)		6.25			6.25

The per share weighted average fair value of stock options issued during

2018

and

2017

was

$3.50

and

$2.64,

respectively.

The following table summarizes the activity related to stock options for the

two

years ended

December 31, 2018:

	Number of Shares			Weighted Average Exercise Price
Options outstanding, January 1, 2017		19,800		$	4.37
Granted		96,000			6.35
Exercised		-			-
Canceled		(39,400	)		6.08
Options outstanding, December 31, 2017 (4,950 exercisable)		76,400			5.98
Granted		189,800			8.14
Exercised		-			-
Canceled		(1,800	)		4.37
Options outstanding, December 31, 2018 (21,800 exercisable)		264,400			7.54