Document And Entity Information(USD $)
12 Months Ended
Dec. 31, 2011
Mar. 15, 2012
Jun. 30, 2011
Entity Information
Entity Registrant Name
inTEST Corporation
Entity Central Index Key
0001036262
Current Fiscal Year End Date
--12-31
Entity Filer Category
Smaller Reporting Company
Entity Current Reporting Status
Yes
Entity Voluntary Filers
No
Entity Well-known Seasoned Issuer
No
Entity Common Stock, Shares Outstanding
10,386,927
Entity Public Float
$26,078,010
Document Information
Document Type
10-K
Amendment Flag
false
Document Period End Date
Dec. 31, 2011
Document Fiscal Year Focus
2011
Document Fiscal Period Focus
FY
Consolidated Balance Sheets(USD $)
In Thousands, unless otherwise specified
Dec. 31, 2011
Dec. 31, 2010
Current assets:
Cash and cash equivalents
$13,957
$6,895
Trade accounts receivable, net of allowance for doubtful accounts of $195 and $150, respectively
6,189
6,244
Inventories
3,896
3,489
Deferred tax assets
453
Prepaid expenses and other current assets
302
430
Total current assets
24,797
17,058
Property and equipment:
Machinery and equipment
3,585
3,534
Leasehold improvements
514
765
Gross property and equipment
4,099
4,299
Less: accumulated depreciation
(2,965)
(3,581)
Net property and equipment
1,134
718
Deferred tax assets
2,028
Goodwill
1,656
1,656
Intangible assets, net
942
1,077
Restricted certificates of deposit
500
700
Other assets
180
199
Total assets
31,237
21,408
Current liabilities:
Accounts payable
1,031
1,672
Accrued wages and benefits
1,795
1,779
Accrued sales commissions
493
522
Accrued rent
407
83
Accrued professional fees
451
373
Accrued warranty
214
274
Customer deposits
425
84
Other current liabilities
222
478
Total current liabilities
5,038
5,265
Deferred rent, net of current portion
39
Total liabilities
5,038
5,304
Commitments and Contingencies (Notes 10, 11, 13 and 16 )
0
0
Stockholders' equity:
Preferred stock, $0.01 par value; 5,000,000 shares authorized; no shares issued or outstanding
0
0
Common stock, $0.01 par value; 20,000,000 shares authorized; 10,463,255 and 10,464,505 shares issued, respectively
105
105
Addtional paid-in capital
26,035
25,973
Accumulated deficit
(686)
(10,549)
Accumulated other comprehensive earnings
1,217
1,311
Treasury stock, at cost; 76,328 and 119,029 shares, respectively
(472)
(736)
Total stockholders' equity
26,199
16,104
Total liabilities and stockholders' equity
$31,237
$21,408
Consolidated Balance Sheets (Parentheticals)(USD $)
In Thousands, except Share data, unless otherwise specified
Dec. 31, 2011
Dec. 31, 2010
Current assets:
Allowance for doubtful accounts, respectively
$195
$150
Stockholders' equity:
Preferred stock, par value
$0.01
$0.01
Preferred stock, shares authorized
5,000,000
5,000,000
Preferred stock, shares issued
0
0
Preferred stock, shares outstanding
0
0
Common stock,
$0.01
$0.01
Common stock, shares authorized
20,000,000
20,000,000
Common stock, shares issued
10,463,255
10,464,505
Treasury stock, at cost, shares, respectively
76,328
119,029
Consolidated Statements of Operations(USD $)
In Thousands, except Share data, unless otherwise specified
12 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Net revenues
$47,266
$46,204
Cost of revenues
24,373
24,059
Gross margin
22,893
22,145
Operating expenses:
Selling expense
5,708
5,717
Engineering and product development expense
3,240
3,044
General and administrative expense
6,367
6,034
Total operating expenses
15,315
14,795
Operating income
7,578
7,350
Other income (expense):
Interest income
13
12
Interest expense
(4)
(64)
Other
72
102
Total other income
81
50
Earnings before income tax expense (benefit)
7,659
7,400
Income tax expense (benefit)
(2,204)
148
Net earnings
$9,863
$7,252
Net earnings per common share:
Basic
$0.97
$0.72
Diluted
$0.96
$0.72
Weighted average common shares outstanding:
Basic
10,147,708
10,019,000
Diluted
10,285,621
10,141,552
Consolidated Statements of Comprehensive Earnings(USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Net earnings
$9,863
$7,252
Foreign currency translation adjustments
(94)
(45)
Comprehensive earnings
$9,769
$7,207
Consolidated Statements of Stockholders' Equity(USD $)
In Thousands, except Share data
Common Stock
Additional Paid-In Capital
Accumulated Deficit
Accumulated Other Comprehensive Earnings
Treasury Stock
Total Stockholders' Equity
Balance at Dec. 31, 2009
$102
$25,798
$(17,801)
$1,356
$(861)
$8,594
Balance (in shares) at Dec. 31, 2009
10,193,255
Net earnings
7,252
7,252
Other comprehensive loss
(45)
(45)
Issuance of non-vested shares of restricted stock
3
(3)
Issuance of non-vested shares of restricted stock (in shares)
273,750
Amortization of deferred compensation related to restricted stock
228
228
Forfeiture of non-vested shares of restricted stock (in shares)
(2,500)
Issuance of treasury stock to satisfy profit sharing liability
(50)
125
75
Balance at Dec. 31, 2010
105
25,973
(10,549)
1,311
(736)
16,104
Balance (in shares) at Dec. 31, 2010
10,464,505
Net earnings
9,863
9,863
Other comprehensive loss
(94)
(94)
Amortization of deferred compensation related to restricted stock
146
146
Forfeiture of non-vested shares of restricted stock (in shares)
(11,250)
Issuance of treasury stock to satisfy profit sharing liability
(114)
264
150
Stock options exercised
30
30
Stock options exercised (in shares)
10,000
Balance at Dec. 31, 2011
$105
$26,035
$(686)
$1,217
$(472)
$26,199
Balance (in shares) at Dec. 31, 2011
10,463,255
Consolidated Statements of Stockholders' Equity (Parentheticals) (Total Stockholders' Equity)
12 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Total Stockholders' Equity
Issuance of shares of treasury stock to satisfy profit sharing liability
42,701
20,270
Consolidated Statements of Cash Flows(USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2011
Dec. 31, 2010
CASH FLOWS FROM OPERATING ACTIVITIES
Net earnings
$9,863
$7,252
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization
394
395
Foreign exchange loss
4
20
Amortization of deferred compensation related to restricted stock
146
228
Profit sharing expense funded through the issuance of treasury stock
150
75
Gain on sale of property and equipment
(48)
(33)
Proceeds from sale of demonstration equipment, net of gain
94
8
Deferred income tax benefit
(2,481)
Changes in assets and liabilities:
Trade accounts receivable
24
(866)
Inventories
(406)
(437)
Prepaid expenses and other current assets
126
(54)
Restricted certificates of deposit
200
(450)
Other assets
13
23
Accounts payable
(640)
(905)
Accrued wages and benefits
24
1,134
Accrued sales commissions
(29)
207
Accrued rent
324
(64)
Accrued professional fees
79
(1)
Accrued warranty
(60)
46
Accrued restructuring and other charges
(130)
Customer deposits
341
(7)
Other current liabilities
(256)
126
Deferred rent, net of current portion
(39)
(118)
Net cash provided by operating activities
7,823
6,449
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment
(780)
(659)
Proceeds from sale of property and equipment
54
Net cash used in investing activitites
(726)
(659)
CASH FLOWS FROM FINANCING ACTIVITIES
Repayment of notes payable to stockholder
(1,525)
Proceeds from stock options exercised
30
Net cash provided by (used in) financing activities
30
(1,525)
Effects of exchange rates on cash
(65)
(17)
Net cash provided by all activities
7,062
4,248
Cash and cash equivalents at beginning of period
6,895
2,647
Cash and cash equivalents at end of period
13,957
6,895
Cash payments for:
Domestic and foreign income taxes
269
135
Interest
1
76
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
Issuance of non-vested shares of restricted stock
448
Forfeiture of non-vested shares of restricted stock
$(20)
$(11)
Note 1 - Nature of Operations
Nature of Operations [Text Block]
(1)    NATURE OF OPERATIONS
 
We are an independent designer, manufacturer and marketer of mechanical, thermal and electrical products that are primarily used by semiconductor manufacturers in conjunction with automatic test equipment ("ATE") in the testing of integrated circuits ("ICs" or "semiconductors"). In addition, in recent years we have begun marketing our thermal products in industries outside the ATE industry, such as the automotive, aerospace and telecommunications industries.
 
The consolidated entity is comprised of inTEST Corporation (parent) and our wholly-owned subsidiaries. We have three reportable segments which are also our reporting units: Mechanical Products, Thermal Products and Electrical Products. We manufacture our products in the U.S. Marketing and support activities are conducted worldwide from our facilities in the U.S., Germany and Singapore. On January 16, 2012, Temptronic Corporation, a wholly-owned subsidiary of inTEST Corporation, acquired substantially all of the assets and certain liabilities of Thermonics, Inc. ("Thermonics"), a division of Test Enterprises, Inc., pursuant to the Asset Purchase Agreement dated December 9, 2011. The acquisition of the Thermonics business will broaden the product line of inTEST's thermal products division. This acquisition is discussed further in Note 19.
 
The semiconductor industry in which we operate is characterized by rapid technological change, competitive pricing pressures and cyclical market patterns. This industry 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 semiconductor industry, our ability to safeguard patents 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 industry. 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
Significant Accounting Policies [Text Block]
(2)    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 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, deferred income tax valuation allowances and product warranty reserves, 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.
 
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 no 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. Bad debt expense was $48 and $62 for the years ended December 31, 2011 and 2010, respectively. Cash flows from accounts receivable are recorded in operating cash flows.
 
Fair Value of Financial Instruments
 
Our financial instruments, principally accounts and notes receivable and accounts payable, are carried at cost which approximates fair value, due to the short maturities of the accounts.
 
Inventories
 
Inventory is valued at standard cost, which approximates actual cost computed on a first-in, first-out basis, not in excess of market value. Cash flows from the sale of inventory 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 industry conditions, anticipated product life cycles, new product introductions and expected future use of the inventory. The charges for excess and obsolete inventory we record establish a new cost basis for the related inventory. We incurred excess and obsolete inventory charges of $403 and $344 for the years ended December 31, 2011 and 2010, respectively.
 
Property and Equipment
 
Machinery and equipment are stated at cost. 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 to seven 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, including amortization of assets acquired under capital leases, was $259 and $261 for the years ended December 31, 2011 and 2010, respectively. Expenditures for maintenance and repairs are charged to operations as incurred.
 
Goodwill, Intangible and Long-Lived Assets
 
Goodwill is assessed for impairment at least 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. 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, changes in working capital, depreciation, amortization and capital expenditures. Changes in assumptions concerning future financial results or other underlying assumptions would 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, we perform a Step I test to identify potential impairment, in which the fair value of a reporting unit is compared with its book value. If the book value of a reporting unit exceeds its fair value, a Step II test is performed in which the implied fair value of goodwill is compared with the carrying amount of goodwill. If the carrying amount of goodwill exceeds the implied fair value, an impairment loss is recorded in an amount equal to that excess. Indefinite-lived intangible assets are assessed for impairment at least annually in the fourth quarter, or more frequently if events or changes in circumstances indicate that the asset might be impaired. The impairment test consists of a comparison of the fair value of an intangible asset with its carrying amount. If the carrying amount of an 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 no 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 Accounting Standards Codification ("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, which is then amortized to expense over the service periods. See further disclosures related to our stock-based compensation plan in Note 15.
 
Revenue Recognition
 
We recognize revenue when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the price is fixed or determinable, and collectibility is reasonably assured. Sales of our products are made through our sales employees, third-party sales representatives and distributors. There are no differences in revenue recognition policies based on the sales channel. We do not provide our customers with rights of return or exchanges. Revenue is generally recognized upon product shipment. Our customers' purchase orders do not typically contain any customer-specific acceptance criteria, other than that the product performs within the agreed upon specifications. We test all products manufactured as part of our quality assurance process to determine that they comply with specifications prior to shipment to a customer. To the extent that any customer purchase order contains customer-specific acceptance criteria, revenue recognition is deferred until customer acceptance.
 
With respect to sales tax collected from customers and remitted to governmental authorities, we use a net presentation in our consolidated statement of operations. As a result, there are no amounts included in either our net revenues or cost of revenues related to sales tax.
 
Product Warranties
 
We generally provide product warranties and record estimated warranty expense at the time of sale based upon historical claims experience. Warranty expense is included in selling expense in the consolidated financial statements.
 
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.
 
Restructuring and Other Charges
 
We recognize a liability for restructuring costs at fair value only when the liability is incurred. The three main components of our restructuring plans have been related to workforce reductions, the consolidation of excess facilities and asset impairments. Workforce-related charges are accrued when it is determined that a liability has been incurred, which is generally after individuals have been notified of their termination dates and expected severance benefits. Plans to consolidate excess facilities result in charges for lease termination fees and future commitments to pay lease charges, net of estimated future sub-lease income. We recognize these charges when we have vacated the premises. In addition, as a result of plans to consolidate excess facilities, we may incur other associated costs such as charges to relocate inventory, equipment or personnel. We recognize charges for other associated costs when these costs are incurred, which is generally when the goods or services have been provided to us. Assets that may be impaired consist of property, plant and equipment and intangible assets. Asset impairment charges are based on an estimate of the amounts and timing of future cash flows related to the expected future remaining use and ultimate sale or disposal of the asset.
 
Foreign Currency
 
For our foreign subsidiaries whose functional currency is 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, 2011 and 2010, foreign currency transaction losses were $3 and $20, 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.
 
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 stock options and unvested shares of restricted stock 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 and their respective weighted average exercise prices that were excluded from the calculation of diluted earnings per share because their effect was anti-dilutive:
 
   
Years Ended December 31,
 
   
2011
   
2010
 
             
Weighted average common shares outstanding - basic
    10,147,708       10,019,000  
Potentially dilutive securities:
               
Employee stock options and unvested shares of restricted stock
    137,913       122,552  
Weighted average common shares outstanding - diluted
    10,285,621       10,141,552  
Average number of potentially dilutive securities excluded from calculation
    129,217       422,260  
Weighted average exercise price of excluded securities
  $ 3.70     $ 3.42  
 
Effect of Recently Adopted Amendments to Authoritative Accounting Guidance
 
In January 2010, the Financial Accounting Standards Board (the "FASB") issued an amendment to an accounting standard regarding disclosure guidance with respect to fair value measurements. Specifically, the new guidance requires disclosure of amounts transferred in and out of Levels 1 and 2 fair value measurements, a reconciliation presented on a gross basis rather than a net basis of activity in Level 3 fair value measurements, greater disaggregation of the assets and liabilities for which fair value measurements are presented and more robust disclosure of the valuation techniques and inputs used to measure Level 2 and 3 fair value measurements. This amendment was effective for interim and annual reporting periods beginning after December 15, 2009, with the exception of the new guidance around the Level 3 activity reconciliations, which was effective for fiscal years beginning after December 15, 2010. The adoption of this amendment did not have any impact on our consolidated financial statements.
 
In July 2010, the FASB issued an amendment to an accounting standard that requires additional disclosure about the credit quality of financing receivables, such as aging information and credit quality indicators. Both new and existing disclosures must be disaggregated by portfolio segment or class, if applicable. The disaggregation of information is based on how allowances for credit losses are developed and how credit exposure is managed. This amendment was effective for interim periods and fiscal years ending after December 15, 2010. The adoption of this amendment did not have any impact on our consolidated financial statements.
 
In December 2010, the FASB issued an amendment to goodwill impairment testing. The amendment modifies Step I of the goodwill impairment test for reporting units with zero or negative carrying amounts. For those reporting units, an entity is required to perform Step II of the goodwill impairment test if it is more likely than not that a goodwill impairment exists. In determining whether it is more likely than not that goodwill impairment exists, an entity should consider whether there are any adverse qualitative factors indicating that impairment may exist. The qualitative factors are consistent with the existing guidance and examples, which require that goodwill of a reporting unit be tested for impairment between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. The amendment is effective for fiscal years, and interim periods within those years, beginning after December 15, 2010. The adoption of this guidance did not have any impact on our consolidated financial statements.
 
In December 2010, the FASB issued an amendment to the disclosure of supplementary pro forma information for business combinations. The amendment specifies that if a public entity presents comparative financial statements, the entity should disclose revenue and earnings of the combined entity as though the business combination that occurred during the current year had occurred as of the beginning of the comparable prior annual reporting period only. The amendment also expands the supplemental pro forma disclosures to include a description of the nature and amount of material, nonrecurring pro forma adjustments directly attributable to the business combination included in the reported pro forma revenue and earnings. The amendment is effective prospectively for business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2010. We will implement this guidance for any business acquisitions we consummate after the effective date. 
 
Effect of Recently Issued Amendments to Authoritative Accounting Guidance
 
In June 2011, the FASB issued an amendment to disclosures about comprehensive income. Under the amendment, an entity has the option to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. In both choices, an entity is required to present each component of net income along with total net income, each component of other comprehensive income along with a total for other comprehensive income, and a total amount for comprehensive income. This amendment eliminates the option to present the components of other comprehensive income as part of the statement of changes in stockholders' equity. Reclassification adjustments between net income and other comprehensive income must be shown on the face of the statement(s), with no resulting change in net earnings. The amendment does not change the items that must be reported in other comprehensive income or when an item of other comprehensive income must be reclassified to net income. The amendment is effective for fiscal years beginning after December 15, 2011. We do not expect the adoption of this amendment to have a material impact on our consolidated financial statements.
 
In September 2011, the FASB issued an amendment to existing guidance on the assessment of goodwill impairment which provides an entity the option to first assess qualitative factors to determine whether it is necessary to perform the current two-step test for goodwill impairment. If an entity believes, as a result of its qualitative assessment, that it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount, the quantitative impairment test is required. Otherwise, no further testing is required. The update also amends the examples of events or circumstances that would be considered in a goodwill impairment evaluation. The amendment is effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. However, an entity can choose to adopt this guidance early even if its annual test date is before the issuance of the final standard, provided that the entity has not yet performed its 2011 annual impairment test or issued its financial statements. We do not expect the adoption of this amendment to have a material impact on our consolidated financial statements.
 
Note 3 - Goodwill and Intangibles Assets
Goodwill and Intangible Assets Disclosure [Text Block]
(3)    GOODWILL, INTANGIBLE AND LONG-LIVED ASSETS
 
Goodwill and Indefinite Life Intangible Assets
 
As of December 31, 2011 and 2010, our goodwill totaled $1,656 and our indefinite life intangible assets totaled $510. Our indefinite life intangible assets consist of trademarks. This goodwill and these intangible assets are a result of our acquisition of Sigma Systems Corporation ("Sigma") in October 2008 and are allocated to our Thermal Products reporting unit.
 
Impairment of Goodwill and Indefinite Life Intangible Assets
 
During December 2011 and 2010, we assessed our goodwill and indefinite life intangible assets for impairment in accordance with the requirements of ASC Topic 350 (Intangibles - Goodwill and Other). 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 rate used in 2011 and 2010 for the discounted cash flows were 20% and 16%, 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, changes in working capital, depreciation, amortization and capital expenditures. Changes in assumptions concerning future financial results or other underlying assumptions would 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 2011 and 2010, we performed a Step I test to identify potential impairment, in which the fair value of the reporting unit was compared with its book value. This assessment indicated no impairment existed as the fair value of this reporting unit was determined to exceed its carrying value by 50% or $8,670 at December 31, 2011 and by 6% or $593 at December 31, 2010.
 
During the indefinite life intangible asset impairment assessment in both 2011 and 2010, we compared the fair value of our intangible assets with their carrying amount. This assessment indicated no impairment existed as the fair value of the intangible assets exceeded their carrying values in both 2011 and 2010.
 
Finite-lived Intangible Assets
 
As of December 31, 2011 and 2010, we had finite-lived intangible assets which totaled $432 and $567, respectively, net of accumulated amortization of $438 and $303, respectively. At December 31, 2011 and 2010, we had three finite-lived intangible assets which consisted of customer relationships, software and patents held by Sigma at the time of our acquisition of this operation in October 2008. These intangible assets are being amortized on a straight-line basis over estimated useful lives of 72 months, 120 months and 60 months, respectively. As of December 31, 2011, these assets had remaining estimated useful lives of 33 months, 81 months, and 21 months, respectively. These intangible assets are allocated to our Thermal Products segment. We assess our finite-lived intangible assets for impairment in accordance with the requirements of ASC Topic 350 (Intangibles - Goodwill and Other). Please see "Impairment of Long-Lived Assets and Finite-Lived Intangible Assets" below for the results of our assessment.
 
The following table sets forth changes in the amount of the carrying value of finite-lived intangible assets for the years ended December 31, 2011 and 2010, respectively:
 
   
2011
   
2010
 
Balance - Beginning of period
  $ 567     $ 701  
Amortization
    (135 )     (134 )
Balance - End of period
  $ 432     $ 567  
 
The following table sets forth the estimated annual amortization expense for our finite-lived intangible assets for each of the next five years:
 
2012
  $ 135  
2013
  $ 123  
2014
  $ 73  
2015
  $ 27  
2016
  $ 27  
 
Impairment of Long-Lived Asset and Finite-lived Intangible Assets
 
In accordance with ASC Topic 350 (Intangibles - Goodwill and Other) and ASC Topic 360 (Property, Plant and Equipment), we review long-lived assets for impairment whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable or that the useful lives of these assets are no longer appropriate. 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. As previously noted, our long-lived assets consist of our finite-lived intangible assets and property and equipment.
 
2011 and 2010 Assessments
 
During 2011 and 2010, we did not review our long-lived assets for impairment as we determined that there were no events or changes in business circumstances that indicated the need for such a review.
 
Note 4 - Restructuring and Other Charges
Restructuring and Related Activities Disclosure [Text Block]
(4)    RESTRUCTURING AND OTHER CHARGES
 
In response to the significant decline in our orders and net revenues during 2008 and 2009, we took actions to reduce our cost structure, including facility closures, workforce reductions and salary and benefits reductions. We consider some of the actions we took to be temporary in nature, such as certain salary and benefits reductions for current employees. At the time we took these temporary actions, it was generally our intent to restore all or a portion of the reduced salary and benefits in future periods when our results of operations and our cash flows improved sufficiently so as to allow us to do so. Any such restoration would impact the ultimate level of savings which will result from our restructuring actions. Effective January 1, 2010, we restored all of the temporary salary reductions we implemented in 2008 and 2009 for our domestic employees, with the exception of the salary of our Executive Chairman, which was restored to approximately 65% of its full reinstated level, reflecting a voluntary continued 35% reduction in his salary. Also on this date, we restored the fees paid to our Board of Directors, which had been reduced by approximately 50%. Effective April 1, 2010, we restored the 401(k) Plan discretionary matching contribution for all domestic employees and the Temptronic profit sharing contributions which had been suspended for most of these employees at the beginning of 2009. There are no other temporary actions remaining to be restored.
 
During 2011 and 2010, we did not record any restructuring charges. At December 31, 2010, we had a liability for restructuring and other charges of $130 related to the relocation of Sigma from El Cajon, California to Sharon, Massachusetts (the "Sigma Relocation") where Temptronic Corporation's manufacturing operations were located at that time. This relocation was approved during the fourth quarter of 2009. We completed the facility closure in El Cajon during the fourth quarter of 2009 and completed the relocation of the product line to the facility in Sharon during the first quarter of 2010.
 
Changes in our liability for restructuring and other charges for the year ended December 31, 2010 are summarized as follows:
 
   
Sigma
Relocation
 
Balance - January 1, 2010
  $ 130  
Severance and other cash payments related to one-time termination benefits and facility closure costs
     (130 )
Balance - December 31, 2010
  $ -  
 
Note 5 - Major Customers
Schedule of Revenue by Major Customers by Reporting Segments [Table Text Block]
(5)    MAJOR CUSTOMERS
 
Texas Instruments Incorporated accounted for 12% and 14% of our consolidated net revenues in 2011 and 2010, respectively. Teradyne, Inc. accounted for 11% of our consolidated net revenues in 2010. While all three of our operating segments sold products to these customers, these revenues were primarily generated by our Mechanical Products and Electrical Products segments. During the years ended December 31, 2011 and 2010, no other customer accounted for 10% or more of our consolidated net revenues.
 
Note 6 - Inventories
Inventory Disclosure [Text Block]
(6)    INVENTORIES
 
Inventories held at December 31 were comprised of the following:

 
   
2011
   
2010
 
Raw materials
  $ 2,784     $ 2,268  
Work in process
    351       385  
Inventory consigned to others
    201       223  
Finished goods
    560       613  
    $ 3,896     $ 3,489  
 
Note 7 - Other Current Liabilities
Accounts Payable and Accrued Liabilities Disclosure [Text Block]
(7)   OTHER CURRENT LIABILITIES
 
Other current liabilities consist of the following:
 
   
December 31,
 
   
2011
   
2010
 
Accrued repairs
  $ -     $ 205  
Current portion of deferred rent
    39       118  
Domestic and foreign income taxes payable
    8       30  
Other
    175       125  
    $ 222     $ 478  
 
Note 8 - Debt
Debt Disclosure [Text Block]
(8)    DEBT
 
Notes Payable to Stockholder
 
At January 1, 2010, as a result of our acquisition of Sigma, we had non-negotiable promissory notes in an aggregate principal amount of $1,525 outstanding. We fully repaid these notes during the fourth quarter of 2010. These notes bore interest at the prime rate plus 1.25% and were secured by the assets of Sigma. Interest was payable annually commencing on the anniversary of closing.
 
Line of Credit
 
At December 31, 2010, we had a secured credit facility that provided for maximum borrowings of $250 and was secured by pledged certificates of deposit totaling $250. During the quarter ended September 30, 2011, this facility was terminated. While this facility was in place, we did not use it to borrow any funds. Our usage consisted of the issuance of two letters of credit in the face amounts of $200 and $50, respectively. These letters of credit were issued as security deposits under two of our operating leases. We paid a quarterly fee of 1.5% per annum on the total amount of the outstanding letters of credit. At the time this facility was terminated, the $200 letter of credit that had been issued under this facility had already been terminated, as discussed below, and the $50 letter of credit that had been issued under this facility was converted to a standalone letter of credit which is secured by a pledged certificate of deposit.
 
Letters of Credit
 
At December 31, 2010, we had an outstanding letter of credit in the amount of $200. This letter of credit was originally issued in December 2000 as a security deposit under a lease that our Temptronic subsidiary entered into for its facility in Sharon, Massachusetts. This letter of credit expired January 1, 2011 and was renewed for an additional year. The terms of the lease required that the letter of credit be renewed at least thirty days prior to its expiration date for successive terms of not less than one year throughout the entire lease term, which ended February 28, 2011. As a result of the termination of this lease in February 2011, this letter of credit was cancelled effective July 12, 2011.
 
At each of December 31, 2011 and 2010, we had an outstanding letter of credit in the amount of $50. This letter of credit is secured by a pledged certificate of deposit in the amount of $50. This letter of credit was originally issued in September 2004 as a portion of the security deposit under a lease that we entered into for a facility for our Electrical Products operation based in northern California. This letter of credit expires September 13, 2012. The terms of the lease require that the letter of credit be renewed at least thirty days prior to its expiration date for successive terms of not less than one year until June 30, 2012, which is sixty days after the expiration of the lease term.
 
At each of December 31, 2011 and 2010, we had an outstanding letter of credit in the amount of $250. This letter of credit is secured by a pledged certificate of deposit in the amount of $250. This letter of credit was originally issued in April 2010 as a security deposit under a lease that we entered into for a facility in Mt. Laurel, New Jersey. Our Mechanical Products operation, which was located in Cherry Hill, New Jersey on December 31, 2010, relocated to this smaller facility in Mt. Laurel, New Jersey during the first quarter of 2011. This letter of credit expires April 1, 2012; however, the terms of the lease require that the letter of credit be renewed at least thirty days prior to its expiration date for successive terms of not less than one year throughout the entire lease term, which ends April 30, 2021. Provided that there is no event of default as defined under the terms and conditions of the lease, the required amount of the letter of credit will decrease to $125 as of the sixty-fourth month of the term of the lease and to $90 as of the one-hundredth month of the term of the lease.
 
At each of December 31, 2011 and 2010, we had an outstanding letter of credit in the amount of $200. This letter of credit is secured by a pledged certificate of deposit in the amount of $200. This letter of credit was originally issued in November 2010 as a security deposit under a lease that we entered into for a facility in Mansfield, Massachusetts. Our Thermal Products operation, which was located in Sharon, Massachusetts on December 31, 2010, relocated to this facility in Mansfield, Massachusetts during the first quarter of 2011. This letter of credit expires November 7, 2012; however, the terms of the lease require that the letter of credit be renewed at least thirty days prior to its expiration date for successive terms of not less than one year throughout the entire lease term, which ends August 23, 2021. Provided that there is no event of default as defined under the terms and conditions of the lease, the required amount of the letter of credit will decrease to $100 as of the thirty-seventh month of the term of the lease and to $50 as of the sixty-first month of the term of the lease.
 
Note 9 - Leasehold Improvements and Deferred Rent
Operating Leases of Lessee Disclosure [Table Text Block]
(9)    LEASEHOLD IMPROVEMENTS AND DEFERRED RENT
 
We record tenant improvements made to our leased facilities based on the amount of the total cost to construct the improvements regardless of whether a portion of that cost was paid through an allowance provided by the facility's landlord. The amount of the allowance, if any, is recorded as deferred rent. We amortize deferred rent on a straight-line basis over the lease term and record the amortization as a reduction of rent expense.
 
During 2005, we recorded $854 of additions to our leasehold improvements which were paid for on our behalf by the landlord of our facility in San Jose, California. We occupied this facility during the first quarter of 2005. We also recorded this amount as deferred rent. Amortization of deferred rent for the years ended December 31, 2011 and 2010 was $118 and $118, respectively. The current portion of deferred rent is included in Other Current Liabilities on our balance sheet.
 
Note 10 - Commitments and Contingencies
Commitments and Contingencies Disclosure [Text Block]
(10)    COMMITMENTS AND CONTINGENCIES
 
Operating Lease Commitments
 
We lease our offices, warehouse facilities, automobiles and certain equipment under noncancellable operating leases which expire at various dates through 2021. Total rental expense for the years ended December 31, 2011 and 2010 was $1,327 and $1,388, 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 Accrued Rent 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 generally included in rental expense in our statement of operations, but they 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 noncancellable operating leases in effect at December 31, 2011 are as follows:
 
2012
  $ 1,241  
2013
  $ 987  
2014
  $ 985  
2015
  $ 994  
2016
  $ 1,079  
Thereafter
  $ 4,539  
         
    $ 9,825  
 
Note 11 - Guarantees
Guarantees [Text Block]
(11)    GUARANTEES
 
Product Warranties
 
Warranty expense for the years ended December 31, 2011 and 2010 was $122 and $187, respectively. The following table sets forth the changes in the liability for product warranties for the years ended December 31, 2011 and 2010:
 
   
2011
   
2010
 
Balance - Beginning of period
  $ 274     $ 228  
Payments made under warranty
    (182 )     (141 )
Accruals for product warranty
    122       187  
                 
Balance - End of period
  $ 214     $ 274  
 
Note 12 - Income Taxes
Income Tax Disclosure [Text Block]
(12)   INCOME TAXES
 
We are subject to Federal and certain state income taxes. In addition, we are taxed in certain foreign countries. As of December 31, 2011 and 2010, there were no cumulative undistributed earnings of our foreign subsidiaries for which U.S. income taxes have not been provided.
 
Earnings before income taxes was as follows:
 
   
Years Ended
December 31,
 
   
2011
   
2010
 
Domestic
  $ 6,722     $ 7,053  
Foreign
    937       347  
                 
    $ 7,659     $ 7,400  
 
Income tax expense (benefit) was as follows:
 
   
Years Ended
December 31,
 
   
2011
   
2010
 
Current
           
Domestic -- Federal
  $ 148     $ -  
Domestic -- state
    133       157  
Foreign
    (20 )     (9 )
      261       148  
Deferred
               
Domestic -- Federal
    (1,676 )     -  
Domestic -- state
    (193 )     -  
Foreign
    (596 )     -  
      (2,465 )     -  
Income tax expense (benefit)
  $ (2,204 )   $ 148  
 
Deferred income taxes reflect the net tax effect of net operating loss and 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, 2011 and 2010:
 
   
December 31,
 
Deferred tax assets:
 
2011
   
2010
 
Net operating loss ("NOL") (Federal, state and foreign)
  $ 1,159     $ 3,268  
Tax credit carryforwards
    963       834  
Depreciation of property and equipment
    815       993  
Inventories
    209       254  
Accrued vacation pay
    162       126  
Allowance for doubtful accounts
    56       55  
Accrued warranty
    25       64  
Other
    41       46  
      3,430       5,640  
Valuation allowance
    (484 )     (5,153 )
Deferred tax assets
    2,946       487  
Deferred tax liabilities:
               
Net intangible assets
    (358 )     (409 )
Unremitted earnings of foreign subsidiaries
    (107 )     (78 )
Deferred tax liabilities
    (465 )     (487 )
Net deferred tax asset
  $ 2,481     $ -  
 
The valuation allowance for deferred tax assets as of the beginning of 2011 and 2010 was $5,153 and $8,599, respectively. The net change in the valuation allowance for the years ended December 31, 2011 and 2010 was a decrease of $4,669 and $3,446, 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 credit carryforwards which expire in various years through 2031.
 
During the past several years, due to our history of operating losses in both our domestic and certain of our foreign operations, we had recorded a full valuation allowance against the deferred tax assets of these operations, including net operating loss carryforwards, where we believed it was more likely than not that we would not have sufficient taxable income to utilize these assets before they expire. During 2011, we reversed $3,110 of the valuation allowance which had been recorded against the deferred tax assets of these operations. The reversal of this amount of the valuation allowance was based on our current assessment that it is now more likely than not that we will be able to fully utilize these assets in the near future. Some of the key factors we considered in making our assessment included our profitability in both 2011 and 2010 and our level of certainty with regard to our forecasts of near term future profitability for the operations to which these assets relate.
 
An analysis of the effective tax rate for the years ended December 31, 2011 and 2010 and a reconciliation from the expected statutory rate of 34% is as follows:
 
   
Years Ended
December 31,
 
   
2011
   
2010
 
Expected income tax (benefit) provision at U.S. statutory rate
  $ 2,604     $ 2,516  
Increase (decrease) in tax from:
               
Changes in valuation allowance     (3,110 )     (743 )
Effects of NOL and tax credit carryforwards     (1,803 )     (1,841 )
Current year tax credits     (349 )     -  
Domestic tax expense, net of Federal benefit     260       104  
Foreign income tax rate differences     94       22  
Deemed dividend from foreign subsidiaries     90       -  
Nondeductible expenses     48       90  
Other     10       90  
Income tax expense (benefit)
  $ (2,204 )   $ 148  
 
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, 2011 and 2010, we did not have an accrual for uncertain tax positions.
 
We file U.S. income tax returns and multiple state and foreign income tax returns. With few exceptions, the U.S. and state income tax returns filed for the tax years ending on December 31, 2008 and thereafter are subject to examination by the relevant taxing authorities.
 
Note 13 - Legal Proceedings
Legal Matters and Contingencies [Text Block]
(13)   LEGAL PROCEEDINGS
 
From time to time we may be a party to legal proceedings occurring in the ordinary course of business. We are not currently involved in any legal proceedings the resolution of which we believe could have a material effect on our business, financial position, results of operations or long-term liquidity.
 
Note 14 - Related Party Transactions
Related Party Transactions Disclosure [Text Block]
(14)   RELATED PARTY TRANSACTIONS
 
At January 1, 2010, we had notes payable in the aggregate amount of $1,525 to one of our stockholders. These notes payable were a result of our acquisition of Sigma in October 2008. We fully repaid these notes during the fourth quarter of 2010.
 
At December 31, 2010, we had an outstanding note receivable in the amount of $6 from the former managing director of our U.K. manufacturing operation which we closed in 2005. During 2010, we extended the term of this note to June 30, 2011. This note receivable was fully repaid during 2011. This note receivable is included in Other Assets on our balance sheet.
 
Note 15 - Stock-Based Compensation
Disclosure of Compensation Related Costs, Share-based Payments [Text Block]
(15)   STOCK-BASED COMPENSATION PLAN
 
As of December 31, 2011 and 2010, we have outstanding stock options and unvested restricted stock awards granted under the Amended and Restated 1997 Stock Plan (the "1997 Stock Plan") as well as under the inTEST Corporation 2007 Stock Plan (the "2007 Stock Plan"). As of March 31, 2007, no additional stock options or shares of restricted stock could be granted under the 1997 Plan.
 
The 2007 Stock Plan was approved at our annual meeting of stockholders held on June 13, 2007, upon the recommendation of our Board of Directors. The 2007 Stock Plan permits 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. A description of the 2007 Stock Plan, including the full text of the 2007 Stock Plan, is contained in the proxy statement for our 2007 annual meeting of stockholders. As of December 31, 2011, 180,000 shares remain available to grant under the 2007 Stock Plan.
 
We have not granted any stock options during 2011 or 2010. Our unvested restricted stock awards outstanding are accounted for based on their grant date fair value. As of December 31, 2011, total compensation expense to be recognized in future periods was $232. All of this expense is related to nonvested shares of restricted stock. The weighted average period over which this expense is expected to be recognized is 2.2 years.
 
Stock Options
 
The following table summarizes the stock option activity for the two years ended December 31, 2011:
 
   
Number
of Shares
   
Weighted
Average
Exercise Price
 
Options outstanding, January 1, 2010 (408,000 exercisable)
    408,000     $ 3.45  
Granted
    -       -  
Exercised
    -       -  
Canceled
    (71,000 )     4.13  
Options outstanding, December 31, 2010 (337,000 exercisable)
    337,000       3.26  
Granted
    -       -  
Exercised
    (10,000 )     3.04  
Canceled
    (78,000 )     3.20  
Options outstanding, December 31, 2011 (249,000 exercisable)
    249,000       3.28  
 
The following table summarizes information about stock options outstanding at December 31, 2011:
 
Range of
Exercise Prices
 
Number
Outstanding and
Exercisable at
December 31, 2011
 
Weighted
Average
Remaining Life
 
Weighted
Average
Exercise Price
   
Aggregate
Intrinsic
Value
 
$3.04 - $3.25
    209,000  
1.37 years
  $ 3.05     $ -  
$3.61 - $4.00
    25,000  
0.38 years
  $ 3.70       -  
$5.66 - $6.13
    15,000  
1.78 years
  $ 5.82       -  
      249,000       $ 3.28     $ -  
 
The aggregate intrinsic value in the table above, if any, represents the total pretax intrinsic value, based on a closing price for our stock of $2.78 at December 31, 2011, assuming all option holders exercised their stock options that were in-the-money as of that date. In general, it is our policy to issue new shares upon the exercise of stock options.
 
Restricted Stock Awards
 
We record compensation expense for restricted stock awards (nonvested shares) based on the quoted market price of our stock at the grant date and amortize the expense over the vesting period. Restricted stock awards generally vest over four years. The following table summarizes the compensation expense we recorded during 2011 and 2010, respectively, related to nonvested shares:
 
   
Years Ended
December 31,
 
   
2011
   
2010
 
Cost of revenues
  $ 10     $ 11  
Selling expense
    15       18  
Engineering and product development expense
    40       42  
General and administrative expense
    81       157  
    $ 146     $ 228  
 
There was no compensation expense capitalized in 2011 or 2010. The following table summarizes the activity related to nonvested shares for the two years ended December 31, 2011:
 
   
Number
of Shares
   
Weighted Average
Grant Date
Fair Value
 
Nonvested shares outstanding, January 1, 2010
    66,500     $ 4.14  
Granted
    273,750       1.64  
Vested
    (34,500 )     4.11  
Forfeited
    (2,500 )     4.24  
Nonvested shares outstanding, December 31, 2010
    303,250       1.89  
Granted
    -       -  
Vested
    (97,000 )     2.45  
Forfeited
    (11,250 )     1.73  
Nonvested shares outstanding, December 31, 2011
    195,000       1.62  
 
The total fair value of the shares that vested during the years ended December 31, 2011 and 2010 was $360 and $81, respectively, as of the vesting dates of these shares.
 
Note 16 - Employee Benefit Plans
Pension and Other Postretirement Benefits Disclosure [Text Block]
(16)   EMPLOYEE BENEFIT PLANS
 
We have a defined contribution 401(k) plan for our employees who work in the U.S. (the "inTEST 401(k) Plan"). All permanent employees of inTEST Corporation and inTEST Silicon Valley Corp who are at least 18 years of age are eligible to participate in the plan. We match employee contributions dollar for dollar up to 10% of the employee's annual compensation, with a maximum limit of $5. Employer contributions vest over four years. Matching contributions are discretionary. At various points in time in the past, these matching contributions have been temporarily suspended as a part of our cost containment efforts. Effective April 1, 2010, we reinstated the matching contributions for the domestic operations within our Mechanical and Electrical Products segments which had been temporarily suspended effective January 1, 2009. For the years ended December 31, 2011 and 2010, we contributed $183 and $162 to the plan, respectively.
 
Temptronic adopted a defined contribution 401(k) plan for its domestic employees in 1988, that was merged into the inTEST 401(k) Plan effective September 1, 2002. The inTEST 401(k) Plan retains the matching provisions of the prior Temptronic plan for all Temptronic employees. Temptronic matches employee contributions $0.50 on the dollar up to 6% of the employees' annual compensation, with a maximum limit of $3. Matching contributions are discretionary. The eligibility and vesting provisions of the prior Temptronic plan have been conformed to those for inTEST Corporation and inTEST Silicon Valley Corporation employees. Effective April 1, 2010, we reinstated matching contributions that had been suspended effective April 1, 2009 as a part of our cost containment efforts. For the years ended December 31, 2011 and 2010, Temptronic contributed $81 and $54 to the plan, respectively.
 
In addition to the employer matching for which Temptronic employees are eligible, upon the termination of the Temptronic Equity Participation Plan ("EPP"), we also acknowledged that it was our intention to contribute $3,000 in the aggregate to the inTEST 401(k) Plan as a form of profit sharing (not to exceed $300 per year) for the benefit of Temptronic employees. The amount of these contributions approximates the amount that we had been committed to contribute to the EPP as of its termination date. All such profit sharing contributions are at the discretion of management, and will be allocated to employees annually in the same manner in which the shares held by the EPP had been allocated. The vesting provisions for these contributions are the same as those of the inTEST 401(k) Plan. Effective January 1, 2009, we temporarily suspended profit sharing contributions due to operating losses being incurred by Temptronic. Effective April 1, 2010, profit sharing contributions were reinstated. Accruals for profit sharing contributions totaling $300 and $225 were made during 2011 and 2010, respectively. Through December 31, 2011, we had made a total of $1,853 in profit sharing contributions. We have historically funded these contributions through the use of treasury shares during the quarter subsequent to the quarter in which we record the profit sharing liability, although management has the discretion to use cash to fund these contributions. Our current intention is to use cash to fund these contributions when our stock price is below $3.00 per share.
 
Note 17 - Segment Information
Segment Reporting Disclosure [Text Block]
(17)   SEGMENT INFORMATION
 
We have three reportable segments, which are also our reporting units: Mechanical Products, Thermal Products and Electrical Products. The Mechanical Products segment includes the operations of our Mt. Laurel, New Jersey manufacturing facility. Sales of our Mechanical Products segment consist primarily of manipulator and docking hardware products, which we design, manufacture and market. In addition, this segment provides post warranty service and support for various ATE equipment.
 
The Thermal Products segment includes the operations of Temptronic Corporation, Sigma Systems Corp., Temptronic GmbH (Germany), and inTEST Pte, Limited (Singapore). Sales of this segment consist primarily of temperature management systems which we design, manufacture and market under our Temptronic and Sigma Systems product lines. In addition, this segment provides post warranty service and support.
 
The Electrical Products segment includes the operations of inTEST Silicon Valley Corporation. Sales of this segment consist primarily of tester interface products which we design, manufacture and market.
 
We operate our business worldwide, and all three segments sell their products both domestically and internationally. All three segments sell to semiconductor manufacturers, third-party test and assembly houses and ATE manufacturers. Our Thermal Products segment also sells into a variety of industries outside of the semiconductor industry, including the aerospace, automotive, communications, consumer electronics and defense industries. Intercompany pricing between segments is either a multiple of cost for component parts or list price for finished goods.
 
   
Years Ended
December 31,
 
Net revenues from unaffiliated customers:
 
2011
   
2010
 
Mechanical Products
  $ 15,208     $ 20,087  
Thermal Products
    26,942       18,194  
Electrical Products
    5,151       7,973  
Intersegment sales
    (35 )     (50 )
    $ 47,266     $ 46,204  
Intersegment sales:
               
Mechanical Products
  $ 7     $ 9  
Thermal Products
    -       -  
Electrical Products
    28       41  
    $ 35     $ 50  
 
   
Years Ended
December 31,
 
Depreciation/amortization:
 
2011
   
2010
 
Mechanical Products
  $ 59     $ 24  
Thermal Products
    319       362  
Electrical Products
    16       9  
    $ 394     $ 395  
Operating income (loss):
               
Mechanical Products
  $ 736     $ 3,180  
Thermal Products
    6,951       2,280  
Electrical Products
    457       2,083  
Corporate
    (566 )     (193 )
    $ 7,578     $ 7,350  
Earnings (loss) before income tax expense (benefit):
               
Mechanical Products
  $ 785     $ 3,256  
Thermal Products
    6,965       2,273  
Electrical Products
    475       2,064  
Corporate
    (566 )     (193 )
    $ 7,659     $ 7,400  
Income tax expense (benefit):
               
Mechanical Products
  $ (170 )   $ 74  
Thermal Products
    (1,823 )     33  
Electrical Products
    (142 )     45  
Corporate
    (69 )     (4 )
    $ (2,204 )   $ 148  
Net earnings (loss):
               
Mechanical Products
  $ 955     $ 3,182  
Thermal Products
    8,788       2,240  
Electrical Products
    617       2,019  
Corporate
    (497 )     (189 )
    $ 9,863     $ 7,252  
Capital expenditures:
               
Mechanical Products
  $ 264     $ 139  
Thermal Products
    431       408  
Electrical Products
    85       112  
    $ 780     $ 659  
 
   
December 31,
 
Identifiable assets:
 
2011
   
2010
 
Mechanical Products
  $ 8,240     $ 7,617  
Thermal Products
    20,030       11,315  
Electrical Products
    2,967       2,476  
    $ 31,237     $ 21,408  
 
The following table provides information about our geographic areas of operation. Net revenues from unaffiliated customers are based on the location to which the goods are shipped.
 
   
Years Ended
December 31,
 
Net revenues from unaffiliated customers:
 
2011
   
2010
 
U.S.
  $ 19,165     $ 17,510  
Foreign
    28,101       28,694  
                 
    $ 47,266     $ 46,204  
 
   
December 31,
 
Long-lived assets:
 
2011
   
2010
 
U.S.
  $ 836     $ 359  
Foreign
    298       359  
                 
    $ 1,134     $ 718  
 
Note 18 - Quarterly Consolidated Financial Data (Unaudited)
Quarterly Financial Information [Text Block]
(18)   QUARTERLY CONSOLIDATED FINANCIAL DATA (Unaudited)
 
The following tables present certain unaudited consolidated quarterly financial information for each of the eight quarters ended December 31, 2011. In our opinion, this quarterly information has been prepared on the same basis as the consolidated financial statements and includes all adjustments (consisting only of normal recurring adjustments) necessary to present fairly the information for the periods presented. The results of operations for any quarter are not necessarily indicative of results for the full year or for any future period.
 
Year-over-year quarterly comparisons of our results of operations may not be as meaningful as the sequential quarterly comparisons set forth below that tend to reflect the cyclical activity of the semiconductor industry as a whole. Quarterly fluctuations in expenses are related directly to sales activity and volume and may also reflect the timing of operating expenses incurred throughout the year.
 
   
Quarters Ended
       
   
3/31/11
   
6/30/11
   
9/30/11
   
12/31/11
   
Total
 
Net revenues
  $ 11,704     $ 13,800     $ 11,681     $ 10,081     $ 47,266  
Gross margin
    5,093       6,798       6,133       4,869       22,893  
Earnings before income tax expense (benefit)
    1,317       2,733       2,420       1,189       7,659  
Income tax expense (benefit)
    60       78       (2,762 )     420       (2,204 )
Net earnings
    1,257       2,655       5,182       769       9,863  
                                         
Net earnings per common share - basic
  $ 0.13     $ 0.26     $ 0.51     $ 0.08     $ 0.97  
Weighted average common shares outstanding - basic
    10,067,748       10,146,613       10,182,795       10,191,927       10,147,708  
Net earnings per common share - diluted
  $ 0.12     $ 0.26     $ 0.50     $ 0.08     $ 0.96  
Weighted average common shares outstanding - diluted
    10,266,644       10,296,902       10,297,284       10,281,364       10,285,621  
 
   
Quarters Ended
       
   
3/31/10
   
6/30/10
   
9/30/10
   
12/31/10
   
Total
 
Net revenues
  $ 9,529     $ 15,260     $ 11,305     $ 10,110     $ 46,204  
Gross margin
    4,537       7,368       5,452       4,788       22,145  
Earnings before income tax expense (benefit)
    1,115       3,166       1,694       1,425       7,400  
Income tax expense (benefit)
    3       (2 )     16       131       148  
Net earnings
    1,112       3,168       1,678       1,294       7,252  
                                         
Net earnings per common share - basic
  $ 0.11     $ 0.32     $ 0.17     $ 0.13     $ 0.72  
Weighted average common shares outstanding - basic
    9,993,089       10,006,956       10,033,034       10,042,226       10,019,000  
Net earnings per common share - diluted
  $ 0.11     $ 0.31     $ 0.17     $ 0.13     $ 0.72  
Weighted average common shares outstanding - diluted
    9,998,892       10,186,364       10,194,580       10,183,760       10,141,552  
 
Note 19 - Subsequent Events
Subsequent Events [Text Block]
(19)   SUBSEQUENT EVENTS
 
Acquisition
 
On January 16, 2012, Temptronic Corporation acquired substantially all of the assets and certain liabilities of Thermonics pursuant to the Asset Purchase Agreement dated December 9, 2011. Thermonics is engaged in the business of designing, manufacturing, selling and distributing temperature forcing systems used in the testing of various products under temperature controlled situations. The acquisition of the Thermonics business will broaden the product line of inTEST's Thermal Products segment.
 
The purchase price for the assets was approximately $3,821 in cash, plus the assumption of specified liabilities, including trade payables and certain customer contract obligations.  We placed $400 of the purchase price in escrow to provide security for certain indemnification obligations set forth in the acquisition agreement. In connection with this acquisition, we also signed a separate one year lease for the facility occupied by Thermonics. This facility is owned by the seller. The total minimum rental commitments under this operating lease are $240. This amount is included in the amounts reported in the table in Note 10. We ceased operations at this facility in February 2012 and relocated the Thermonics product line to our facility in Mansfield, Massachusetts where our Temptronic and Sigma operations are located. We expect to record a restructuring charge in the first quarter of 2012 of approximately $220 related to this action.
 
Total acquisition costs incurred through February 29, 2012 were $431. The portion of these costs that was incurred in 2011 was $148. Acquisition costs are expensed as incurred and included in general and administrative expense.
 
The Thermonics acquisition will be accounted for as a purchase business combination and, accordingly, the results will be included in our consolidated results of operations from the date of acquisition. The allocation of the total purchase price of Thermonics net tangible and identifiable intangible assets will be based on their estimated fair values as of the acquisition date. The tangible assets acquired include accounts receivable, inventory and property and equipment. Liabilities assumed include trade payables and certain customer contract obligations. The excess of the purchase price over the identifiable intangible and net tangible assets will be allocated to goodwill. We have not completed our purchase accounting for this transaction and are still in the process of valuing the assets acquired. In addition, we are not yet able to provide the proforma income statement disclosures for the year ended December 31, 2011. These disclosures cannot be provided currently as certain factors that impact them, such as intangible asset amortization expense, are based on the final valuation of the assets acquired. We expect to complete this process by June 30, 2012.