10-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K

(Mark One)
[X]    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
                For the fiscal year ended December 31, 2015 or

[   ]    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
                For the transition period from __________________ to ___________________

Commission File Number 1-36117
inTEST Corporation(Exact name of registrant as specified in its charter)

DELAWARE (State or Other Jurisdiction of Incorporation or Organization)	22-2370659 (I.R.S. Employer Identification Number)
804 EAST GATE DRIVE, SUITE 200 MT. LAUREL, NEW JERSEY (Address of Principal Executive Offices)	08054 (Zip Code)
Registrant's telephone number, including area code: (856) 505-8800
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class                Common Stock, par value $0.01 per share	Name of Each Exchange on Which Registered NYSE MKT

Securities registered pursuant to Section 12(g) of the Act: NoneIndicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes /  / No /X/
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes /  / No /X/Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes /X/ No /  /
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes /X/ No /  /
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. /X/
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer /  /                                                                                            Accelerated filer /  /
Non-accelerated filer (Do not check if a smaller reporting company)/  /                    Smaller reporting company /X/Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes /  / No /X/The aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold on June 30, 2015 (the last business day of the registrant's most recently completed second fiscal quarter), was: $35,089,249.The number of shares outstanding of the registrant's Common Stock, as of March 18, 2016, was 10,495,222
                                                                          DOCUMENTS INCORPORATED BY REFERENCE
Portions of the definitive proxy statement of the Registrant for the Registrant's 2016 Annual Meeting of Stockholders, to be filed with the Securities and Exchange Commission within 120 days after the end of the fiscal year covered by this Report, are incorporated by reference into Part III of this Report.

inTEST CORPORATION
FORM 10-K
FOR THE YEAR ENDED DECEMBER 31, 2015

INDEX

PART I		Page
Item 1.	Business	3
Item 1A.	Risk Factors	13
Item 1B.	Unresolved Staff Comments	19
Item 2.	Properties	20
Item 3.	Legal Proceedings	20
Item 4.	Mine Safety Disclosures	20
PART II
Item 5.	Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	20
Item 6.	Selected Financial Data	21
Item 7.	Management's Discussion and Analysis of Financial Condition and Results of Operations	22
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	29
Item 8.	Financial Statements and Supplementary Data	30
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	30
Item 9A.	Controls and Procedures	30
Item 9B.	Other Information	31
PART III
Item 10.	Directors, Executive Officers and Corporate Governance	31
Item 11.	Executive Compensation	31
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	31
Item 13.	Certain Relationships and Related Transactions, and Director Independence	32
Item 14.	Principal Accounting Fees and Services	32
PART IV
Item 15.	Exhibits, Financial Statement Schedules	32
	Signatures	33
	Index to Exhibits	34
	Index to Consolidated Financial Statements and Financial Statement Schedule	36

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inTEST CORPORATION
FORM 10-K
FOR THE YEAR ENDED DECEMBER 31, 2015

PART I

Item 1.    BUSINESS

Cautionary Statement Regarding Forward-Looking Statements

From time to time, we make written or oral "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, including statements contained in our filings with the Securities and Exchange Commission, or SEC, (including this Report on Form 10-K), our annual report to stockholders and in other communications. These statements do not convey historical information, but relate to predicted or potential future events, such as statements of our plans, strategies and intentions, or our future performance or goals. Our forward-looking statements can often be identified by the use of forward-looking terminology such as "believes," "expects," "intends," "may," "will," "should" or "anticipates" or similar terminology, and include, but are not limited to, statements made in this Report regarding:

• the success of our strategy to diversify our business by entering markets outside the integrated circuit, or IC, and automatic test equipment, or ATE, markets, including the automotive, consumer electronics, defense/aerospace, energy, industrial and telecommunications markets;
• the possibility of future acquisitions or dispositions;
• the ability to borrow funds to finance major potential acquisitions;
• the success of our restructuring efforts (the goal of which is to return non-profitable operations to profitability);
• indications of a change in the market cycles in the IC and ATE markets or other markets we serve;
• the success of our 2015 stock repurchase plan;
• developments and trends in the IC and ATE markets;
• the development of new products and technologies by us or our competitors;
• effects of exchange rate fluctuations;
• the availability of materials used to manufacture our products;
• the availability of and retention of key personnel;
• general economic conditions both domestically and globally;
• net revenues generated by foreign subsidiaries;
• competitive pricing pressures;
• the sufficiency of cash balances, lines of credit and net cash from operations;
• stock price fluctuations;
• the anticipated market for our products;
• costs associated with the implementation of new SEC regulations; and
• other projections of net revenues, taxable earnings (loss), net earnings (loss), net earnings (loss) per share, capital expenditures and other financial items.

Investors and prospective investors are cautioned that such forward-looking statements are only projections based on current estimations. These statements involve risks and uncertainties and are based upon various assumptions. We discuss many of these risks and uncertainties under Item 1A "Risk Factors," below, and elsewhere in this Report. These risks and uncertainties, among others, could cause our actual future results to differ materially from those described in our forward-looking statements or from our prior results. We are not obligated to update these forward-looking statements, even though our situation may change in the future.

INTRODUCTION

We are an independent designer, manufacturer and marketer of thermal, mechanical and electrical products that are used by semiconductor manufacturers in conjunction with ATE, in the testing of ICs. In addition, we market our thermal products in markets outside the ATE market, such as the automotive, consumer electronics, defense/aerospace, energy, industrial and telecommunications markets. Our high performance products are designed to enable our customers to improve the efficiency of their test processes and, consequently, their profitability.

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inTEST CORPORATION
FORM 10-K
FOR THE YEAR ENDED DECEMBER 31, 2015

Item 1.    BUSINESS (Continued)

We sell our products worldwide. Within the ATE market, we sell our products both directly to major semiconductor manufacturers and semiconductor test subcontractors and indirectly through leading ATE manufacturers. In markets outside the ATE market, we sell our products directly to the end user of the product. Our largest customers include Analog Devices, Inc., Emerson Electric Co., Hakuto Co. Ltd., Infineon Technologies, Intel Corp., Intersil Corporation, NXP Semiconductors N.V., Raytheon Company, Teradyne, Inc. and Texas Instruments Incorporated.

The consolidated entity is comprised of inTEST Corporation (parent) and our wholly-owned subsidiaries. inTEST Corporation was incorporated in New Jersey in 1981 and reincorporated in Delaware in April 1997. During 2015, we managed our business as three product segments, as more fully discussed under "Our Segments" below, which consisted of our Thermal Products, Mechanical Products and Electrical Products segments.

In January 2016, we announced the formation of the inTEST EMS Products Division which is a result of the combination of the operations of our Electrical and Mechanical Products segments. In 2016, these two product segments will be managed as one business unit. The decision by management to combine the operations of these two product segments reflects the significant similarities between these segments including customer base, markets served, and sales channels. However, we have concluded that these two product segments do not currently meet the aggregation criteria under Accounting Standards Codification Topic 280 (Segment Reporting) due to certain dissimilar economic characteristics. Accordingly, we will continue to show these two product segments as separate reportable segments in our footnote disclosures. Certain operational changes undertaken in the first quarter of 2016 in connection with the formation of this new business unit are discussed further in Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations."

MARKETS

Overview

Our business is grounded in the ATE market, which provides automated test equipment to the semiconductor market; however, since 2009, we have begun to diversify our served markets to address the thermal test requirements of several other markets outside the ATE market. These include the automotive, consumer electronics, defense/aerospace, energy, industrial and telecommunications markets. We offer highly specialized engineering solutions in these markets outside the ATE market, the demand for which is limited and which we expect may vary significantly from period to period. During both 2015 and 2014, our net revenues in markets outside the ATE market were $10.7 million and $11.1 million, respectively, and represented 27% of our total net revenues in both years. In the last five years, our net revenues from sales in markets outside the ATE market have ranged from 18% to 30%.

The level of our net revenues in the various markets we serve outside the ATE market varies significantly from market to market. During 2015 and 2014, our net revenues into the telecommunications market represented 9% and 11%, respectively, of our total net revenues, while our net revenues into the defense/aerospace and industrial markets represented 8% and 4%, respectively, of our total net revenues in both years. The level of our net revenues in these non-ATE markets has varied significantly in the past and we expect will vary significantly in the future as we build our presence in these markets and establish new markets for our products. One of our goals is to further expand our sales in these markets outside the ATE market; however, due to the nature of our highly specialized product offerings in these non-ATE markets, we do not expect broad market penetration in many of these markets and therefore, do not anticipate developing meaningful market shares in these non-ATE markets. Consequently, we are continuing to evaluate buying patterns and opportunities for growth in these markets that may affect our performance. The following discussion of our markets, therefore, is limited to only the ATE and semiconductor markets, which currently represent the majority of our net revenues.

Semiconductor and ATE Markets

Historically, the semiconductor market has been characterized by rapid technological change, wide fluctuations in demand and shortening product life cycles. Designers and manufacturers of a variety of electronic and industrial products, such as cell phones, telecom and datacom systems, Internet access devices, computers, transportation and consumer electronics, require increasingly complex ICs to provide improved end-product performance demanded by their customers. Semiconductor manufacturers generally compete based on product performance and price. We believe that testing costs represent a significant

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inTEST CORPORATION
FORM 10-K
FOR THE YEAR ENDED DECEMBER 31, 2015

Item 1.    BUSINESS (Continued)

portion of the total cost of manufacturing ICs. Semiconductor manufacturers remain under pressure to maximize production yields and reduce testing costs. At the same time, the growing complexity of ICs has increased the difficulty of maximizing test yields. In order to address these market trends, semiconductor manufacturers strive for more effective utilization of ATE, smaller test areas and increased wafer level testing.

Demand for new ATE and related equipment depends upon several factors, including the demand for products that incorporate ICs, the increasing complexity of ICs and the emergence of new IC design, production and packaging technologies. Some of the evolutionary changes in IC technologies included the shift to 300 mm wafers in production, system-on-a-chip, or SOC, where digital, analog and memory functions are combined on a single IC, and chip scale packaging. As a result of these and other advances, semiconductor manufacturers may require additional ATE not only to handle increases in production but also to handle the more sophisticated testing requirements of ICs.

IC Test Process

Semiconductor manufacturers typically produce ICs in multiples of several hundred on a silicon wafer which is later separated or "diced" into individual ICs. Extended leads are then attached to the individual ICs, for later connection to other electrical components. In most cases, the ICs are then encapsulated in a plastic, ceramic or other protective housing. These process steps are called "packaging."

Wafers are tested before being diced and packaged, to ensure that only properly functioning ICs are packaged. This testing step has several names, including "front-end test," "wafer test," "wafer probe" or "wafer sort." In front-end test, an electronic handling device known as a wafer prober automatically positions the wafer under a probe card which is electronically connected to a "test head," which connects electrically to a test system. During front-end testing there is a growing trend of thermally conditioning the wafer during test, especially in the memory and automotive markets. Once the good ICs have been identified, they are packaged.

The packaged ICs also require testing, called "back-end test" or "final test," to determine if they meet design and performance specifications. Packaged ICs are tested after loading into another type of electronic handling device called a "package handler" or "handler," which then transfers the packaged ICs into a test socket which is attached to the test head. These handlers may be temperature controlled for testing. "Wafer probers" and "handlers" are sometimes referred to in this Report collectively as "electronic device handlers."

Testers range in price from approximately $100,000 to over $2.0 million each, depending primarily on the complexity of the IC to be tested and the number of test heads (typically one or two) with which each tester is configured. Probers and handlers range in price from approximately $50,000 to $500,000. A typical test floor of a large semiconductor manufacturer may have 100 test heads and 100 probers or 250 handlers supplied by various vendors for use at any one time. While larger global semiconductor manufacturers typically purchase ATE to test the ICs they manufacture, there are a growing number of semiconductor manufacturers who outsource IC testing to third-party foundries, test and assembly providers.

Test head manipulators, also referred to as positioners, facilitate the movement of the test head to the electronic device handler. Docking hardware mechanically connects the test head to the wafer prober or handler. Tester interface products provide the electrical connection between the test head and the wafer or packaged IC. Traditionally, temperature management products are used in back-end test to allow a manufacturer to test packaged ICs under the extreme temperature conditions in which the IC may be required to operate. However, we believe that temperature-controlled testing will be an increasingly important part of front-end wafer testing as more parameters traditionally tested in back end-test are moved to front-end test.

Trends in IC Testing

ATE is used to identify unacceptable packaged ICs and bad die on wafers. ATE assists IC manufacturers in controlling test costs by performing IC testing in an efficient and cost-effective manner. In order to provide testing equipment that can help IC manufacturers meet these goals, we believe the ATE market must address the following issues:

Change in Technology. End-user applications are demanding ICs with increasingly higher performance, greater speeds, and smaller sizes. ICs that meet these higher standards, including SOC designs, are more complex and dense. These technology trends have significant implications for the IC testing process, including:

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inTEST CORPORATION
FORM 10-K
FOR THE YEAR ENDED DECEMBER 31, 2015

Item 1.    BUSINESS (Continued)

• the need for test heads of higher complexity;
• higher signal densities;
• increasing test speeds; and
• a new generation of testers for SOC and other technologies.

Need for Plug-Compatibility and Integration. Semiconductor manufacturers need test methodologies that will perform increasingly complex tests while lowering the overall cost of testing. This can require combining ATE manufactured by various companies into optimally performing systems. Semiconductor manufacturers have to work closely with various test hardware, software, interface and component vendors to resolve design and compatibility issues in order to make these vendors' products plug-compatible with test equipment manufactured by other vendors.

Testing Under Extreme Conditions. ICs will have to perform across a wider spectrum of temperature and environmental conditions than ever before because of the growing complexity of products in which they are deployed. In recent years, temperature testing has found an increasing role in front-end, wafer level testing. Creating a uniform thermal profile over much larger wafer areas represents a significant engineering and design challenge for ATE manufacturers.

Demand for Higher Levels of Technical Support. As IC testing becomes more complex, semiconductor manufacturers demand higher levels of technical support on a routine basis. ATE manufacturers must commit appropriate resources to technical support in order to develop close working relationships with their customers. This level of support also requires close proximity of service and support personnel to customers' facilities.

Cost Reduction Through Increased Front-End Testing. As the cost of testing ICs increases, semiconductor manufacturers will continue to look for ways to streamline the testing process to make it more cost-effective, such as the trend to use massive parallel testing, in which semiconductor manufacturers test multiple ICs on the wafer simultaneously. We believe that this factor will lead to more front-end, wafer-level testing.

OUR SOLUTIONS

Historically, we have focused our development efforts on designing and producing high quality products that provide superior performance and cost-effectiveness. We have sought to address each manufacturer's individual needs through innovative and customized designs, use of the best materials available, quality manufacturing practices and personalized service. We have designed solutions to overcome the evolving challenges facing the ATE market and other markets that we serve, which we believe provide the following advantages:

Temperature-Controlled Testing. Our Thermostream (R) products are used by manufacturers in a number of markets to stress test a variety of semiconductor and electronic components, PC boards and sub-assemblies. Our Thermochuck (R) products are used by semiconductor manufacturers for front-end temperature stress screening at the wafer level. Factors motivating manufacturers to use temperature testing include design characterization, failure analysis and quality control as well as determining performance under extreme operating temperatures, all of which contribute to manufacturing cost savings. Our acquisitions of Sigma Systems Corporation ("Sigma"), in October 2008, and Thermonics, Inc. ("Thermonics"), in January 2012, have significantly increased our product offerings in the area of temperature-controlled testing. Sigma's thermal platforms and temperature chambers can accommodate large thermal masses and are found in both laboratory and production environments. Thermonics' products provide a range of precision temperature forcing systems used throughout various markets to verify the performance of products at a range of temperatures.

Scalable, Universal, High Performance Interface Technology. Our universal test head manipulators provide a high degree of positioning flexibility with a minimum amount of effort. As a result, our products can be used in virtually any test setting. Our manipulator products are designed to accommodate the increased size of test heads. Our docking hardware offers precise control over the connection to test sockets, probing assemblies and interface boards, reducing downtime and minimizing costly damage to fragile components. Our tester interface products optimize the integrity of the signals transmitted between the test head and the device under test by being virtually transparent to the test signals. This results in increased accuracy of the test data and may thus enable improved test yields. We believe that these characteristics will gain even more significance as testing becomes even more demanding.

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inTEST CORPORATION
FORM 10-K
FOR THE YEAR ENDED DECEMBER 31, 2015

Item 1.    BUSINESS (Continued)

Compatibility and Integration. A hallmark of our products has been, and continues to be, compatibility with a wide variety of ATE. Our manipulator and docking hardware products are all designed to be used with otherwise incompatible ATE. We believe this integrated approach to ATE facilitates smooth changeover from one tester to another, longer lives for interface components, better test results, increased ATE utilization and lower overall test costs.

Worldwide Customer Service and Support. We have long recognized the need to maintain a physical presence near our customers' facilities. As of December 31, 2015, we had domestic manufacturing facilities in Massachusetts, New Jersey and California and provided service to our customers from sales and service personnel based in the U.S., Europe and Asia. Our engineers are easily accessible to, and can work directly with, most of our customers from the time we begin developing our initial proposal, through the delivery, installation and use of the product by our customer. In this way, we are able to develop and maintain close relationships with our customers.

OUR STRATEGIES

We remain committed to our goals of being recognized in our markets as the designer and manufacturer of the highest quality and most cost effective products and becoming the key supplier of all of our customers' product testing needs, other than probers, handlers and testers. Our strategies to achieve these goals include the following:

Pursuing Synergistic Acquisitions. A key element of our growth strategy has been to acquire businesses, technologies or products that are complementary to our current product offerings. Since our initial public offering in 1997, we have acquired several businesses which have enabled us to expand our line of product offerings and have given us the opportunity to market a broader range of products to our customer base. In particular, the acquisitions of Temptronic in 2000, Sigma in 2008, and Thermonics in 2012, provided access to markets that are less sensitive to cyclicality than the ATE market. We seek to make acquisitions that will further expand our product lines as well as increase our exposure to markets outside of the ATE market.

Pursuing Revenue Growth Opportunities Outside the Semiconductor ATE Market. Another element of our growth strategy is to pursue revenue growth opportunities in markets we have not traditionally served, such as the automotive, consumer electronics, defense/aerospace, energy, industrial and telecommunications markets. We believe that we may be able to reduce some of the cyclicality that we have historically experienced by further diversifying our revenue streams outside the semiconductor ATE market. We see the most potential for this within our Thermal Products segment. During 2015 and 2014, approximately $10.7 million and $11.1 million, respectively, or 27%, of our total net revenues in both years were derived from markets outside semiconductor test. These revenues were all generated by our Thermal Products segment. We cannot determine at this time whether we will be successful in building our sales in these non-traditional markets or what the growth rate of our sales in these markets will be in future periods.

Providing Technologically Advanced Solutions. We are committed to designing and producing only the highest quality products which incorporate innovative designs to achieve optimal cost-effectiveness and functionality for each customer's particular situation. Our engineering and design staff is continually engaged in developing new and improved products and manufacturing processes.

Leveraging Our Strong Customer Relationships. Our technical personnel work closely with ATE manufacturers to design tester interface and docking hardware that are compatible with their ATE. As a result, we are often privy to proprietary technical data and information about these manufacturers' products. We believe that because we do not compete with ATE manufacturers in the prober, handler and tester markets, we have been able to establish strong collaborative relationships with these manufacturers that enable us to develop ancillary ATE products on an accelerated basis.

Maintaining Our International Presence. Our existing and potential customers are concentrated in certain regions throughout the world. We believe that we must maintain a presence in the markets in which our customers operate. We currently have offices in the U.S., Germany and Singapore.

Controlling Costs. At the same time as we are pursuing growth opportunities, we will seek ways to more aggressively streamline our cost structure, so that we are positioned to offer products at prices that provide the margin for a reasonable profit as well as the resources for continual product development.

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inTEST CORPORATION
FORM 10-K
FOR THE YEAR ENDED DECEMBER 31, 2015

Item 1.    BUSINESS (Continued)

OUR SEGMENTS

During 2015, we managed our business as three product segments, which were also our reporting units: Thermal Products, Mechanical Products and Electrical Products. Our Thermal Products segment consists of our subsidiaries in Mansfield, Massachusetts (Temptronic Corporation, which manufactures products under the Temptronic, Sigma and Thermonics brand names), Germany (inTEST Thermal Solutions GmbH), and Singapore (inTEST Pte Ltd.). Our Mechanical Products segment consists of our manufacturing operation in Mt. Laurel, New Jersey. Our Electrical Products segment consists of our subsidiary in Fremont, California (inTEST Silicon Valley Corporation). As previously discussed, in January 2016, we announced the formation of the inTEST EMS Products Division which is a result of the combination of the operations of our Electrical and Mechanical Products segments. In 2016, these two product segments will be managed as one business unit.

Semiconductor manufacturers use our mechanical products during testing of wafers and specialized packaged ICs. They use our thermal and electrical products in both front-end and back-end testing of ICs. These ICs include microprocessors, digital signal processing chips, mixed signal devices, MEMS (Micro-Electro-Mechanical Systems), application specific ICs and specialized memory ICs, and are used primarily in the automotive, consumer electronics, defense/aerospace, energy, industrial and telecommunications markets. We custom design most of our products for each customer's particular combination of ATE.

Thermal Products

Our thermal products are sold into the environmental test market encompassing a wide variety of markets including the ATE, automotive, consumer electronics, defense/aerospace, energy, industrial and telecommunications markets. Our thermal products enable a manufacturer to test semiconductor wafers and ICs, electronic components and assemblies, mechanical assemblies and electromechanical assemblies. Our thermal products provide the ability to characterize and stress test a variety of materials over extreme and variable temperature conditions that can occur in actual use.

ThermoStream(R) Products: Our ThermoStream(R) products are used in the semiconductor market as a stand-alone temperature management tool, or in a variety of electronic test applications as part of our MobileTemp systems. ThermoStream(R) products provide a source of heated and cooled air which can be directed over the component or device under test. These systems are capable of controlling temperatures to within +/- 0.1 degree Celsius over a range of -100 degrees Celsius to as high as +300 degrees Celsius within 1.0 degree Celsius of accuracy. As a stand-alone tool, ThermoStreams(R) provide a temperature-controlled air stream to rapidly change and stabilize the temperature of packaged ICs and other devices.

Our MobileTemp Series combines our ThermoStream(R) products with our family of exclusive, high-speed ThermoChambers to offer thermal test systems with fast, uniform temperature control in a compact package enabling temperature testing at the test location. MobileTemp Systems are designed specifically for small thermal-mass applications beyond the semiconductor market and have found application in the automotive, electronic, fiber optic and oil field service markets testing such things as electronic sub-assemblies, sensor assemblies, and printed circuit boards.

Traditionally, our customers used ThermoStream(R) products primarily in engineering, quality assurance and small-run manufacturing environments. However, increasingly, our customers use ThermoStream(R) products in longer-run production applications. Sigma has significantly broadened our product line by providing the ability to thermally test devices and assemblies requiring a far larger scale, both physically and thermally, than previously achievable. ThermoStream(R) and MobileTemp products range in price from approximately $15,000 to $50,000.

ThermoChambers: Our chamber products are available in a variety of sizes, from small bench-top units to chambers with internal volumes of twenty-seven cubic feet and greater and with temperature ranges as wide as from -190 degrees Celsius to +500 degrees Celsius. Chambers can be designed to utilize liquid nitrogen or liquid carbon dioxide cooling or mechanical refrigeration, and sometimes both. These chambers can accommodate large thermal masses and are found in both laboratory and production environments. Chambers are priced from $15,000 to $150,000.

Thermal Platforms: Our platforms are available in surface sizes ranging from 7.2 square inches to 616 square inches. They provide a flat, thermally conductive, precisely temperature controllable surface that is ideal for conditioning of testing devices with a flat surface. Platforms are available with temperature ranges as broad as -100 degrees Celsius to +250 degrees Celsius. Thermal platforms can be designed to utilize either liquid nitrogen or liquid carbon dioxide cooling or mechanical refrigeration. Platforms offer virtually unimpeded access to the device under test and their easy access and compact size makes them ideal for convenient bench-top use. Platforms are priced from $6,500 to $65,000.

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inTEST CORPORATION
FORM 10-K
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Item 1.    BUSINESS (Continued)

ThermoChuck(R) Products: Our ThermoChuck(R) precision vacuum platform assemblies, used primarily in the semiconductor market, quickly change and stabilize the temperature of semiconductor wafers accurately and uniformly during testing without removing the wafer from its testing environment. Such temperatures can range from as low as -65 degrees Celsius to as high as +300 degrees Celsius. ThermoChucks(R) are incorporated into wafer prober equipment for laboratory analysis and for in-line production testing of semiconductor wafers. ThermoChuck(R) products range in price from approximately $16,000 to $120,000.

Thermonics(R) Products: Our Thermonics temperature conditioning products provide tempered gas or fluid to enable customers to maintain desired thermal conditions within their tool or process. Applications include general industrial, chemical processing, energy, electronics and semiconductor markets. Prices range from $20,000 to greater than $100,000.

Mechanical Products

Manipulator Products. We offer three lines of manipulator products: the in2(R), the Aero Series and the Cobal Series. These free-standing universal manipulators can hold a variety of test heads and enable an operator to reposition a test head for alternate use with any one of several probers or handlers on a test floor. Certain members of the Aero family are also available as a lower-cost solution for dedicated prober-only or handler-only test cell applications.

The in2(R) and Cobal Series of manipulator products incorporate our balanced floating-head design. This design permits a test head weighing up to 1,600 pounds to be held in an effectively weightless state, so it can be moved manually or with optional powered assistance, up or down, right or left, forward or backward and rotated around each axis (known as six degrees of motion freedom) by an operator using a modest amount of force. The same design features enable the operator to dock the test head without causing inadvertent damage to the fragile electrical contacts. As a result, after testing a particular production lot of ICs, the operator can quickly and easily disconnect a test head that is held in an in2(R) manipulator and equipped with our docking hardware and dock it to another electronic device handler for testing either a subsequent lot of the same packaged ICs or to test different ICs. The in2(R) and Cobal Series manipulators range in price from approximately $12,000 to $60,000.

The Aero Series of manipulator products consists of the Aero 450H and Aero 150P manipulators. These manipulators are designed to handle test heads weighing less than 1,500 pounds. The up and down movement is supported by an air-pressure-based floating state technology. The Aero Series manipulators range in price from $10,000 to $30,000.

Docking Hardware Products. Our docking hardware products protect the delicate interface contacts and ensure proper repeatable and precise alignment between the test head's interface board and the prober's probing assembly or the handler's test socket as they are brought together, or "docked." A simple cam action docks and locks the test head to the prober or handler, thus eliminating motion of the test head relative to the prober or handler. This minimizes deterioration of the interface boards, test sockets and probing assemblies which is caused by constant vibration during testing. Our docking hardware products are used primarily with floating-head universal manipulators when maximum mobility and inter-changeability of handlers and probers between test heads is required. By using our docking hardware products, semiconductor manufacturers can achieve cost savings through improved ATE utilization, improved accuracy and integrity of test results, and reduced repairs and replacements of expensive ATE interface products.

We believe our docking hardware products offer our customers the ability to make various competing brands of test heads compatible with various brands of probers and handlers by only changing interface boards. This is called "plug-compatibility." Plug-compatibility enables increased flexibility and utilization of test heads, probers and handlers purchased from various ATE manufacturers. We believe that because we do not compete with ATE manufacturers in the sale of probers, handlers or testers, ATE manufacturers are willing to provide us with the information that is integral to the design of plug-compatible products. Our docking hardware products range in price from approximately $2,000 to $25,000.

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inTEST CORPORATION
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Item 1.    BUSINESS (Continued)

Electrical Products

Our electrical products, which include various types of tester interfaces, provide the electrical connections between the tester and the wafer prober or IC handler to carry the electrical signals between the tester and the probe card on the prober or the test socket on the handler. Our designs optimize the integrity of the transmitted signal. Therefore, our tester interfaces can be used with high speed, high frequency, digital or mixed signal testers used in testing more complex ICs. Because our tester interface products enable the tester to provide more reliable yield data, our interfaces may also reduce IC production costs. We design standard and modular interface products to address most possible tester/prober combinations on the market today. In addition, we provide a custom design service that will allow any of our customers to use virtually any tester, prober or handler combination with any type of device, such as analog, digital, mixed signal and radio frequency. For example, our Centaur(R) modular interface is designed to provide flexibility and scalability through the use of replaceable signal modules which can be easily changed on the test floor as our customers' testing requirements change. In addition to the Centaur(R) modular interface, we also offer over 200 different types of tester interface models that we custom designed for our customers' specific applications. These tester interface products range in price from approximately $7,000 to $40,000.

Financial Information About Product Segments and Geographic Areas

Please see Note 15 of our consolidated financial statements included in Item 8 of this Report on Form 10-K for additional data regarding net revenues, profit or loss and total assets of each of our segments and revenues attributable to foreign countries.

MARKETING, SALES AND CUSTOMER SUPPORT

We market and sell our products primarily in markets where semiconductors are manufactured. North American and European semiconductor manufacturers, as well as third-party foundries, test and assembly providers, have located most of their back-end factories in Southeast Asia. The front-end wafer fabrication plants of U.S. semiconductor manufacturers are primarily in the U.S. Likewise, European, Taiwanese, South Korean and Japanese semiconductor manufacturers generally have located their wafer fabrication plants in their respective countries.

Thermal Products: We market our thermal products brands, Temptronic, Sigma and Thermonics, under the umbrella name of inTEST Thermal Solutions and sales to ATE manufacturers are handled directly by our own sales force. Sales to semiconductor manufacturers and customers in other markets in the U.S. are handled through independent sales representative organizations. In Singapore and Malaysia, our sales and service are handled through our internal sales and service staff. In the rest of Asia, our sales are handled through distributors. In Europe, sales managers at our office in Germany, as well as regional distributors and independent sales representatives, sell to semiconductor manufacturers and customers in other markets. We visit our distributors regularly and have trained them to sell and service all of our thermal products.

Mechanical and Electrical Products: In North America, we sell to semiconductor manufacturers principally through the use of independent, commissioned sales representatives. North American sales representatives also coordinate product installation and support with our technical staff and participate in trade shows.

Our internal sales account managers handle sales to ATE manufacturers and are responsible for a portfolio of customer accounts and for managing certain independent sales representatives. In addition, our sales account managers are responsible for pricing, quotations, proposals and transaction negotiations, and they assist with applications engineering and custom product design. Technical support is provided to North American customers and independent sales representatives by employees based in New Jersey, California and Texas.

In Europe we sell to semiconductor and ATE manufacturers through our internal sales staff and through the use of independent sales representatives. Technical support is provided to European customers by an employee based in the UK or by independent sales representatives who we have trained. In China, Malaysia, the Philippines, Singapore, South Korea, Taiwan and Thailand, we sell through the use of independent sales representatives who are supervised by our internal sales staff. International sales representatives are responsible for sales, installation, support and trade show participation in their geographic market areas. Technical support is provided to Asian customers primarily by employees based in Malaysia, the Philippines and Taiwan.

- 10 -

inTEST CORPORATION
FORM 10-K
FOR THE YEAR ENDED DECEMBER 31, 2015

Item 1.    BUSINESS (Continued)

CUSTOMERS

We market all of our products to end users, which include semiconductor manufacturers and third-party foundries, test and assembly providers, as well as to original equipment manufacturers ("OEMs"), which include ATE manufacturers and their third-party outsource manufacturing partners. In the case of thermal products, we also market our products to independent testers of semiconductors, manufacturers of automotive, consumer electronics, defense/aerospace, energy, industrial and telecommunications products, and semiconductor research facilities. Our customers use our products principally in production testing, although our ThermoStream(R) products traditionally have been used largely in engineering development and quality assurance. We believe that we sell to most of the major semiconductor manufacturers in the world.

During the years ended December 31, 2015 and 2014, Hakuto Co. Ltd., one of our distributors, accounted for 12% and 11% of our consolidated net revenues, respectively. These revenues were generated by our Thermal Products segment. During the year ended December 31, 2014, Texas Instruments Incorporated accounted for 13% of our consolidated net revenues. While all three of our operating segments sold products to this customer, these revenues were primarily generated by our Mechanical Products and Electrical Products segments. Our ten largest customers accounted for approximately 43% and 48% of our consolidated net revenues in 2015 and 2014, respectively. The loss of any one or more of our largest customers, or a reduction in orders by a major customer, could materially reduce our net revenues or otherwise materially affect our business, financial condition, or results of operations.

Our largest customers in 2015 include:

Semiconductor Manufacturers	ATE Manufacturers	Other
Analog Devices, Inc.	Teradyne, Inc.	Emerson Electric Co.
Infineon Technologies		Hakuto Co. Ltd.
Intel Corp		Raytheon Company
Intersil Corporation
NXP Semiconductors
Texas Instruments Incorporated

MANUFACTURING AND SUPPLY

As of December 31, 2015, our principal manufacturing operations consisted of assembly and testing at our facilities in Massachusetts, New Jersey and California. We assemble most of our products from a combination of standard components and custom parts that have been fabricated to our specifications by either third-party manufacturers or our own fabrication operation in New Jersey. Our practice is to use the highest quality raw materials and components in our products. The primary raw materials used in fabricated parts are all widely available. We purchase substantially all of our components from multiple suppliers. We purchase certain raw materials and components from single suppliers, however we believe that all materials and components are available in adequate amounts from other sources, although from time to time, certain components may be in short supply because of high demand or the inability of some vendors to consistently meet our quality or delivery requirements.

We conduct inspections of incoming raw materials, fabricated parts and components using sophisticated measurement equipment. This includes testing with coordinate measuring machines in all but one of our manufacturing facilities to ensure that products with critical dimensions meet our specifications. We have designed our inspection standards to comply with applicable MIL specifications and ANSI standards.

Our Massachusetts facility has maintained certification with the ISO 9001:2008 standard since its inception. Our New Jersey and California facilities manufacture products only for the semiconductor industry where ISO certification is not required. However, these locations do employ the practices embodied in the ISO 9001:2008.

- 11 -

inTEST CORPORATION
FORM 10-K
FOR THE YEAR ENDED DECEMBER 31, 2015

Item 1.    BUSINESS (Continued)

ENGINEERING AND PRODUCT DEVELOPMENT

Our success depends on our ability to provide our customers with products and solutions that are well engineered, and to design those products and solutions before, or at least no later than, our competitors. As of December 31, 2015, we employed a total of 26 engineers, who were engaged in engineering and product development. In addition, when the demands of engineering and product development projects exceed the capacity or knowledge of our in-house staff, we retain temporary third-party engineering and product development consultants to assist us. Our practice in many cases is to assign engineers to work with specific customers, thereby enabling us to develop the relationships and exchange of information that is most conducive to successful product development and enhancement. In addition, some of our engineers are assigned to new product research and development and have worked on such projects as the development of new types of universal manipulators, the redesign and development of new thermal products and the development of high performance interfaces.

Since most of our products are customized, we consider substantially all of our engineering activities to be engineering and product development. We spent approximately $3.9 million in 2015 and $3.6 million in 2014 on engineering and product development, respectively.

PATENTS AND OTHER PROPRIETARY RIGHTS

Our policy is to protect our technology by filing patent applications for the technologies that we consider important to our business. We also rely on trademarks, trade secrets, copyrights and unpatented know-how to protect our proprietary rights. It is our practice to require that all of our employees and third-party product development consultants assign to us all rights to inventions or other discoveries relating to our business that were made while working for us. In addition, all employees and third-party product development consultants agree not to disclose any private or confidential information relating to our technology, trade secrets or intellectual property.

As of December 31, 2015, we held 48 active U.S. patents and had 9 pending U.S. patent applications covering various aspects of our technology. Our U.S. patents expire at various times beginning in 2016 and extending through 2034. During 2015, three U.S. patents were issued and we had two U.S. patents expire. We do not believe that the expiration of these patents or the upcoming expiration of certain of our patents in 2016 will have a material impact on our business. We also hold foreign patents and file foreign patent applications, in selected cases corresponding to our U.S. patents and patent applications, to the extent management deems appropriate.

While we believe that our patents and other proprietary rights are important to our business, we also believe that, due to the rapid pace of technological change in the semiconductor equipment market, the successful manufacture and sale of our products also depends upon our engineering, manufacturing, marketing and servicing skills. In the absence of patent protection, we would be vulnerable to competitors who attempt to copy or imitate our products or processes. We believe our intellectual property has value, and we have taken in the past, and will take in the future, actions we deem appropriate to protect such property from misappropriation. There can be no assurance, however, that such actions will provide meaningful protection from competition. For additional information regarding risks related to our intellectual property, see "Risk Factors."

COMPETITION

We operate in an increasingly competitive environment within each of our product segments. Some of our competitors have greater financial resources and more extensive design and production capabilities than we do. Certain markets in which we operate have become more fragmented, with smaller companies entering the market. These new smaller entrants typically have much lower levels of fixed operating overhead than we do, which enables them to be profitable with lower priced products. In order to remain competitive with these and other companies, we must be able to continue to commit a significant portion of our personnel, financial resources, research and development and customer support to developing new products and maintaining customer relationships worldwide.

- 12 -

inTEST CORPORATION
FORM 10-K
FOR THE YEAR ENDED DECEMBER 31, 2015

Item 1.    BUSINESS (Continued)

Our competitors include independent manufacturers, ATE manufacturers and, to a lesser extent, semiconductor manufacturers' in-house ATE interface groups. Competitive factors in our market include price, functionality, timely product delivery, customer service, applications support, product performance and reliability. We believe that our long-term relationships with the industry's leading semiconductor manufacturers and other customers, and our commitment to, and reputation for, providing high quality products, are important elements in our ability to compete effectively in all of our markets.

Our principal competitors for Thermostream products are FTS Systems, a part of SP Industries, and MPI Corporation. Our principal competitors for Thermochuck products include Cascade Microtech, Inc., ERS Electronik GmbH and Espec Corp. Our principal competitors for environmental chambers are Cincinnati Sub-Zero Products, Inc., Espec Corp. and Thermotron Industries. Our principal competitor for thermal platforms is Environmental Stress Systems Inc.

Our principal competitors for manipulator products are Advantest Corporation, Esmo AG, Reid-Ashman Manufacturing and Teradyne, Inc. Our principal competitors for docking hardware products include Advantest Corporation, Esmo AG, Knight Automation, Reid-Ashman Manufacturing and Teradyne, Inc.

Our principal competitors for tester interface products are Advantest Corporation, Esmo AG, Reid-Ashman Manufacturing and Teradyne, Inc.

BACKLOG

At December 31, 2015, our backlog of unfilled orders for all products was approximately $2.4 million compared with approximately $3.8 million at December 31, 2014. Our backlog includes customer orders which we have accepted, substantially all of which we expect to deliver in 2016. While backlog is calculated on the basis of firm purchase orders, a customer may cancel an order or accelerate or postpone currently scheduled delivery dates. Our backlog may be affected by the tendency of customers to rely on shorter lead times available from suppliers, including us, in periods of depressed demand. In periods of increased demand, there is a tendency towards longer lead times that has the effect of increasing backlog. As a result of these factors, our backlog at a particular date is not necessarily indicative of sales for any future period.

EMPLOYEES

At December 31, 2015, we had 125 full time employees, including 56 in manufacturing operations, 49 in customer support/operations and 20 in administration. Substantially all of our key employees are highly skilled and trained technical personnel. None of our employees are represented by a labor union, and we have never experienced a work stoppage. From time to time we retain third-party contractors to assist us in manufacturing operations and engineering and product development projects.

ADDITIONAL INFORMATION

Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, and amendments to these reports that are filed with the SEC pursuant to Section 13(a) or 15(d) of the Exchange Act, are available free of charge through our website (www.intest.com) as soon as reasonably practicable after we electronically file them with, or furnish them to, the SEC.

Item 1A. RISK FACTORS

The following are some of the factors that could materially and adversely affect our future performance or could cause actual results to differ materially from those expressed or implied in our forward-looking statements. The risks and uncertainties described below are not the only ones facing us and we cannot predict every event and circumstance that may adversely affect our business. However, these risks and uncertainties are the most significant factors that we have identified at this time. If one or more of these risks actually occurs, our business, results of operations, and/or financial condition would likely suffer, and the price of our stock could be negatively affected.

- 13 -

inTEST CORPORATION
FORM 10-K
FOR THE YEAR ENDED DECEMBER 31, 2015

Item 1A. RISK FACTORS (Continued)

We seek to further diversify the markets for our thermal products in order to increase the proportion of our sales attributable to markets which are less subject to cyclicality than the semiconductor and ATE markets. If we are unable to do so, our future performance will remain substantially exposed to the fluctuations of the cyclicality of the semiconductor and ATE markets.

Since 2009, we have sold our thermal products in markets outside of the ATE market, including the automotive, consumer electronics, defense/aerospace, energy, industrial and telecommunications markets. Our sales to these non-ATE markets were $10.7 million and $11.1 million in 2015 and 2014, respectively, and represented 27% of our consolidated net revenues in both years. We offer highly specialized engineering solutions in these markets outside the ATE market, the demand for which is limited and which we expect may vary significantly from period to period. Our goal is to increase our sales into these and other non-ATE markets; however, in most cases, the expansion of our thermal product sales into these new markets has occurred in the last several years, and we may experience difficulty in expanding our sales efforts further into these markets. These difficulties could include hiring sales and marketing staff with sufficient experience selling into these new markets and our ability to continue to develop products which meet the needs of customers in these markets and which are not currently offered by our competitors. In addition, due to the nature of our highly specialized product offerings in these non-ATE markets, we do not expect broad market penetration in many of these markets. If we are unable to expand our sales in non-ATE markets, our net revenues and results of operations will remain substantially dependent upon the cycles of the semiconductor and ATE markets.

Our restructuring efforts, the goal of which is to return non-profitable operations to profitability, may not be successful.

In recent years, our Mechanical Products segment has experienced significant operating losses. We have undertaken actions at various times over the last few years to address these losses. On January 4, 2016, in conjunction with the formation of the inTEST EMS Products Division, we implemented a workforce reduction which resulted in our recording a restructuring charge of $99,000 in the first quarter of 2016. The annualized savings from these actions are estimated to be approximately $690,000. Our review of the operations of this product segment is ongoing with the goal of identifying additional opportunities for cost reduction and revenue growth. We cannot be certain that our efforts to restructure this operation to achieve profitability will be successful. These efforts could require us to utilize additional financial resources to pay severance or fund other costs associated with the restructuring of this operation, which would reduce the amount of our cash and cash equivalents available to fund our short term working capital requirements.

Our sales are affected by the cyclicality and seasonality of the semiconductor and ATE markets, which causes our operating results to fluctuate significantly.

Our business depends in significant part upon the capital expenditures of semiconductor manufacturers. Capital expenditures by these companies depend upon, among other things, the current and anticipated market demand for semiconductors and the products that utilize them. Typically, semiconductor manufacturers curtail capital expenditures during periods of economic downturn. Conversely, semiconductor manufacturers increase capital expenditures when market demand requires the addition of new or expanded production capabilities or the reconfiguration of existing fabrication facilities to accommodate new products. In addition to being cyclical, the ATE market has also developed a seasonal pattern in the last several years, with the second and third quarters being the periods of strong demand and the first and fourth quarters being periods of weakened demand. We believe this change has been driven by the strong demand for consumer products containing semiconductor content sold during the year-end holiday shopping season. These market changes and seasonal sales pattern have contributed in the past, and will likely continue to contribute in the future, to fluctuations in our operating results.

We seek to acquire additional businesses. If we are unable to do so, our future rate of growth may be reduced or limited. We may incur significant expenses related to due diligence or other transaction related expenses for a proposed acquisition that may not be completed.

A key element of our growth strategy is to acquire businesses, technologies or products that are complementary to our current product offerings. We seek to make acquisitions that will further expand our product lines as well as increase our exposure to markets outside the ATE market. We may not be able to execute our acquisition strategy if:

- 14 -

inTEST CORPORATION
FORM 10-K
FOR THE YEAR ENDED DECEMBER 31, 2015

Item 1A. RISK FACTORS (Continued)

• we are unable to identify suitable businesses, technologies or products to acquire;
• we do not have sufficient cash or access to required capital at the necessary time; or
• we are unwilling or unable to outbid larger, more resourceful companies.

Our acquisition strategy involves financial and management risks which may adversely affect our results in the future.

If we acquire additional businesses, technologies or products, we will face the following additional risks:

• future acquisitions could divert management's attention from daily operations or otherwise require additional management, operational and financial resources;
• we might not be able to integrate future acquisitions into our business successfully or operate acquired businesses profitably;
• we may realize substantial acquisition related expenses which would reduce our net earnings in future years; and
• our investigation of potential acquisition candidates may not reveal problems and liabilities of the companies that we acquire.

If any of the events described above occur, our earnings could be reduced. If we issue shares of our stock or other rights to purchase our stock in connection with any future acquisitions, we would dilute our existing stockholders' interests and our earnings per share may decrease. If we issue debt in connection with any future acquisitions, lenders may impose covenants on us which could, among other things, restrict our ability to increase capital expenditures or to acquire additional businesses.

Our business is subject to intense competition.

We face significant competition throughout the world in each of our product segments. Some of our competitors have substantial financial resources and more extensive design and production capabilities than we do. Some of our competitors are much smaller than we are, and therefore have much lower levels of overhead than we do, which enables them to sell their competing products at lower prices. In order to remain competitive, we must be able to continually commit a significant portion of our personnel and financial resources to developing new products and maintaining customer satisfaction worldwide. We expect our competitors to continue to improve the performance of their current products and introduce new products or technologies. Over the last several years, in response to significant declines in global demand for our products, some competitors have reduced their product pricing significantly, which has led to intensified price based competition, which has and could continue to materially adversely affect our business, financial condition and results of operations.

Changes in the buying patterns of our customers have affected, and may continue to affect, demand for our products and our gross and net operating margins. Such changes in patterns are difficult to predict and may not be immediately apparent.

In addition to the cyclicality and seasonality of the semiconductor and ATE markets, demand for our products and our gross and net operating margins have also been affected by changes in the buying patterns of our customers. We believe that in recent years there have been a variety of changes within the ATE market, including, for example, changing product requirements, longer time periods between new product offerings by OEMs and changes in customer buying patterns. In particular, demand for our mechanical and electrical products, which are sold exclusively within the ATE market, and our operating margins in these product segments have been affected by shifts in the competitive landscape, including (i) customers placing heightened emphasis on shorter lead times (which places increased demands on our available engineering and production capacity increasing unit costs) and ordering in smaller quantities (which prevents us from acquiring component materials in larger volumes at lower cost and increasing unit costs), (ii) the increasing practice of OEM manufacturers to specify other suppliers as primary vendors, with less frequent opportunities to compete for such designations, (iii) customers requiring products with a greater range of use at the lowest cost, and (iv) customer supply chain management groups demanding lower prices and spreading purchases across multiple vendors.

- 15 -

inTEST CORPORATION
FORM 10-K
FOR THE YEAR ENDED DECEMBER 31, 2015

Item 1A. RISK FACTORS (Continued)

These shifts in market practices have had, and may continue to have, varying degrees of impact on our net revenues and our gross and net operating margins. Such shifts are difficult to predict and may not be immediately apparent, and the impact of these practices is difficult to quantify from period to period. There can be no assurance that we will be successful in implementing effective strategies to counter these shifts.

Increased in-house manufacturing capabilities among certain ATE manufacturers may have resulted, and may continue to result, in reductions in our share of the manipulator, docking hardware and tester interface products markets, reduced revenues in our Mechanical and Electrical Products segments and net losses in our Mechanical Products segment.

Over the last several years, certain ATE manufacturers have begun manufacturing and selling certain products made by both our Mechanical and Electrical Products segments, including manipulator, docking hardware and tester interface products. As a result of the loss of these product sales, we may have lost market share in our manipulator, docking hardware and tester interface products, and our Mechanical Products segment has incurred operating losses. To the extent that we cannot replace these lost sales, our market share may decline, which could have a material adverse impact on the financial results of our Mechanical and Electrical Products segments.

We generate a large portion of our sales from a small number of customers. If we were to lose one or more of our large customers, operating results could suffer dramatically.

During the years ended December 31, 2015 and 2014, Hakuto Co. Ltd., one of our distributors, accounted for 12% and 11% of our consolidated net revenues, respectively. These revenues were generated by our Thermal Products segment. During the year ended December 31, 2014, Texas Instruments Incorporated accounted for 13% of our consolidated net revenues. The reduction in net revenues from Texas Instruments Incorporated during 2015 as compared to 2014 reflects reduced capital spending by this customer during 2015. While all three of our operating segments sold products to this customer, these revenues were primarily generated by our Mechanical Products and Electrical Products segments. Our ten largest customers accounted for approximately 43% and 48% of our consolidated net revenues in 2015 and 2014, respectively. The loss of any one or more of our largest customers, or a reduction in orders by a major customer, could materially reduce our net revenues or otherwise materially affect our business, financial condition, or results of operations.

Our operating results often change significantly from quarter to quarter and may cause fluctuations in our stock price.

Historically, our operating results have fluctuated significantly from quarter to quarter. We believe that these fluctuations occur primarily due to the cycles of demand in the semiconductor manufacturing industry. In addition to the changing cycles of demand in the semiconductor manufacturing industry, other factors that have caused our quarterly operating results to fluctuate in the past, and that may cause fluctuations and losses in the future, include:

• the state of the U.S. and global economies;
• changes in the buying patterns of our customers;
• changes in our market share;
• the technological obsolescence of our inventories;
• quantities of our inventories greater than is reasonably likely to be utilized in future periods;
• fluctuations in the level of product warranty charges;
• competitive pricing pressures;
• the impairment of our assets due to reduced future demand for our products;
• costs related to due diligence and transaction-related expenses for a proposed acquisition that does not get completed.
• costs and timing of integration of our acquisitions and plant consolidations and relocations;
• excess manufacturing capacity;
• our ability to control operating costs;
• costs associated with implementing restructuring initiatives;
• delays in shipments of our products;
• the mix of our products sold;

- 16 -

inTEST CORPORATION
FORM 10-K
FOR THE YEAR ENDED DECEMBER 31, 2015

Item 1A. RISK FACTORS (Continued)

• the mix of customers and geographic regions where we sell our products;
• changes in the level of our fixed costs;
• costs associated with the development of our proprietary technology;
• our ability to obtain raw materials or fabricated parts when needed;
• increases in costs of component materials;
• cancellation or rescheduling of orders by our customers;
• changes in government regulations; and
• political or economic instability.

Because the market price of our common stock has tended to vary based on, and in relation to, changes in our operating results, fluctuations in the market price of our stock are likely to continue as variations in our quarterly results continue.

We have experienced and may continue to experience significant variability in our effective tax rates and may have exposure to additional tax liabilities and costs.

We are subject to paying income taxes in the U.S. and various other countries in which we operate. Our effective tax rate is dependent on where our earnings are generated and the tax regulations and the interpretation and judgment of administrative tax or revenue entities in the U.S. and other countries. We are also subject to tax audits in the countries where we operate. Any material assessment resulting from an audit from an administrative tax or revenue entity could negatively affect our financial results.

Our industry is subject to rapid technological change, and our business prospects would be negatively affected if we are unable to quickly and effectively respond to innovation in the semiconductor and ATE markets.

Semiconductor technology continues to become more complex as manufacturers incorporate ICs into an increasing variety of products. This trend, and the changes needed in automatic testing systems to respond to developments in the semiconductor market, are likely to continue. We cannot be certain that we will be successful or timely in developing, manufacturing or selling products that will satisfy customer needs or that will attain market acceptance. Our failure to provide products that effectively and timely meet customer needs or gain market acceptance will negatively affect our business prospects.

A substantial portion of our customers are located outside the U.S., which exposes us to foreign political and economic risks.

We have operated internationally for many years and expect to expand our international operations as necessary to continue expansion of our sales and service to our non-U.S. customers. Our foreign subsidiaries generated 13% and 15% of consolidated net revenues in 2015 and 2014, respectively. Net revenues from foreign customers totaled $24.6 million, or 63% of consolidated net revenues in 2015 and $27.4 million, or 66% of consolidated net revenues in 2014. We expect our net revenues from foreign customers will continue to represent a significant portion of total net revenues. However, in addition to the risks generally associated with sales and operations in the U.S., sales to customers outside the U.S. and operations in foreign countries are subject to additional risks, which may, in the future, affect our operations. These risks include:

• political and economic instability in foreign countries;
• the imposition of financial and operational controls and regulatory restrictions by foreign governments;
• the need to comply with a wide variety of U.S. and foreign import and export laws;
• local business and cultural factors that differ from our normal standards and practices, including business practices that we are prohibited from engaging in by the Foreign Corrupt Practices Act and other anti-corruption laws and regulations;
• trade restrictions;
• changes in tariffs and taxes;
• longer payment cycles;
• fluctuations in currency exchange rates; and
• the greater difficulty of administering business abroad.

- 17 -

inTEST CORPORATION
FORM 10-K
FOR THE YEAR ENDED DECEMBER 31, 2015

Item 1A. RISK FACTORS (Continued)

A significant portion of our cash position is maintained overseas.

While much of our cash is in the U.S., a significant portion is generated from and maintained by our foreign operations. As of December 31, 2015, $2.0 million of our cash and cash equivalents was held by our foreign subsidiaries. Our financial condition and results of operations could be adversely impacted if we are unable to maintain a sufficient level of cash flow in the U.S. to address our cash requirements or we are unable to efficiently and timely repatriate cash from overseas. Any payment of distributions, loans or advances to us by our foreign subsidiaries could be subject to restrictions on, or taxation of, dividends or repatriation of earnings under applicable local law, monetary transfer restrictions and foreign currency exchange regulations in the jurisdictions in which our subsidiaries operate. If we are unable to repatriate the earnings of our subsidiaries it could have an adverse impact on our ability to redeploy earnings in other jurisdictions where they could be used more profitably.

A breach of our operational or security systems could negatively affect our business and results of operations.

We rely on various information technology networks and systems, some of which are managed by third parties, to process, transmit and store electronic information, including confidential data, and to carry out and support a variety of business activities, including manufacturing, research and development, supply chain management, sales and accounting. A failure in or a breach of our operational or security systems or infrastructure, or those of our suppliers and other service providers, including as a result of cyberattacks, could disrupt our business, result in the disclosure or misuse of proprietary or confidential information, damage our reputation, cause losses and significantly increase our costs. In addition, domestic and international regulatory agencies have implemented, and are continuing to implement, various reporting and remediation requirements that companies must comply with upon learning of a breach. While we have insurance that may protect us from incurring some of these costs, there is no assurance that such insurance coverage is adequate to cover all costs and damages incurred in connection with a cyberattack.

If our suppliers do not meet product or delivery requirements, we could have reduced revenues and earnings.

Certain components may be in short supply from time to time because of high demand or the inability of some vendors to consistently meet our quality or delivery requirements. A significant portion of our material purchases require some custom work and there are not always multiple suppliers capable of performing such custom work on a timely or cost effective basis. If any of our suppliers were to cancel commitments or fail to meet quality or delivery requirements needed to satisfy customer orders for our products, we could lose time-sensitive customer orders, have reduced revenues and earnings, and be subject to contractual penalties, any of which could have a material adverse effect on our business, results of operations and financial condition.

Our business may suffer if we are unable to attract and retain key employees.

The loss of key personnel could adversely affect our ability to manage our business effectively. Our future success will depend largely upon the continued services of our senior management and other key employees or the development of successors with commensurate skills and talents. In the past, during periods of weakened demand which has caused us to experience operating losses, we have implemented temporary salary and benefit reductions and eliminations that have remained in place until our operations returned to profitability. As global economic conditions improve and employment opportunities increase, if we are unable to increase employee salaries and maintain employee benefits commensurate with competitive opportunities, we may not be able to retain our senior management and other key employees. Our business could suffer if we were to lose one of more of our senior officers or other key employees.

If we are not able to obtain patents on or otherwise preserve and protect our proprietary technologies, our business may suffer.

We have obtained domestic and foreign patents covering some of our products which expire between the years 2016 and 2034, and we have applications pending for additional patents. Some of our products utilize proprietary technology that is not covered by a patent or similar protection, and, in many cases, cannot be protected. We cannot be certain that:

• any additional patents will be issued on our applications;

- 18 -

inTEST CORPORATION
FORM 10-K
FOR THE YEAR ENDED DECEMBER 31, 2015

Item 1A. RISK FACTORS (Continued)

• any patents we own now or in the future will protect our business against competitors that develop similar technology or products;
• our patents will be held valid if they are challenged or subjected to reexamination or reissue;
• others will not claim rights to our patented or other proprietary technologies; or
• others will not develop technologies which are similar to, or can compete with, our unpatented proprietary technologies.

If we cannot obtain patent or other protection for our proprietary technologies, our ability to compete in our markets could be impaired.

Claims of intellectual property infringement by or against us could seriously harm our businesses.

From time to time, we may be forced to respond to or prosecute intellectual property infringement claims to defend or protect our rights or a customer's rights. These claims, regardless of merit, may consume valuable management time, result in costly litigation or cause product shipment delays. Any of these factors could seriously harm our business and operating results. We may have to enter into royalty or licensing agreements with third parties who claim infringement. These royalty or licensing agreements, if available, may be costly to us. If we are unable to enter into royalty or licensing agreements with satisfactory terms, our business could suffer. In instances where we have had reason to believe that we may be infringing the patent rights of others, or that someone may be infringing our patent rights, we have asked our patent counsel to evaluate the validity of the patents in question, as well as the potentially infringing conduct. If we become involved in a dispute, neither the third parties nor the courts are bound by our counsel's conclusions.

We may not be able to fully execute our share repurchase program. 

In October 2015, our Board of Directors authorized our management to repurchase up to $5 million of our common stock commencing in December 2015.  We may not be able to purchase this amount of shares in the open market or in privately negotiated transactions in compliance with applicable securities regulations.  Future share repurchases are subject to the discretion of our Board of Directors and will depend, among other things, upon our earnings, capital requirements and financial condition. While we have authorized a share repurchase program, we are not required to repurchase the full dollar amount of shares authorized for repurchase and we may reduce or eliminate our share repurchase program in the future. The reduction or elimination of our share repurchase program, particularly if we do not repurchase the full dollar amount of shares authorized under the program, could adversely affect the market price of our common stock. As of December 31, 2015 we had repurchased a total of 41,332 shares at a cost of $155,000, which includes $1,000 in fees paid to our broker. Through February 29, 2016, we had repurchased a total of 126,356 shares at a cost of $512,000 which included fees paid to our broker of $3,000.

Regulations related to conflict minerals will cause us to experience increased costs.

The Dodd-Frank Wall Street Reform and Consumer Protection Act imposes disclosure requirements regarding the use of "conflict" minerals mined from the Democratic Republic of Congo and adjoining countries in our products. This requirement could affect the pricing, sourcing and availability of minerals used in the manufacture of components we use in our products. In addition, there will be significant additional costs associated with complying with the disclosure requirements, such as costs related to determining the source of any conflict minerals used in our products. Our supply chain is complex and we may be unable to verify the origins for all metals used in our products. As a result, we may be unable to certify that our products are conflict mineral free.

Item 1B.   UNRESOLVED STAFF COMMENTS

None.

- 19 -

inTEST CORPORATION
FORM 10-K
FOR THE YEAR ENDED DECEMBER 31, 2015

Item 2.   PROPERTIES

At December 31, 2015, we leased five facilities worldwide. The following chart provides information regarding each of our principal facilities that we occupied at December 31, 2015:

Location	Lease Expiration	Approx. Square Footage	Principal Uses
Mansfield, MA	8/21	52,700	Thermal Products segment operations.
Mt. Laurel, NJ	4/21	54,897	Corporate headquarters and Mechanical Products segment operations.
Fremont, CA	9/17	15,746	Electrical Products segment operations.

All of our facilities have space to accommodate our needs for the foreseeable future.

Item 3.   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 material legal proceedings.

Item 4.   MINE SAFETY DISCLOSURES

Not applicable.

PART II

Item 5.   MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Market for Common Stock

Our common stock is traded on NYSE MKT under the symbol "INTT." The following table sets forth the high and low sale prices of our common stock, as reported on the NYSE MKT LLC for the periods indicated. Sale prices have been rounded to the nearest full cent.

	Sales Price
2015	High	Low
First Quarter	$4.32	$3.73
Second Quarter	5.21	4.01
Third Quarter	4.50	3.76
Fourth Quarter	4.25	3.47
2014
First Quarter	$4.44	$3.69
Second Quarter	4.25	3.66
Third Quarter	5.75	3.87
Fourth Quarter	4.80	3.98

On March 18, 2016, the closing price for our common stock as reported on the NYSE MKT LLC was $3.89. As of March 18, 2016, we had 10,495,222 shares outstanding that were held by approximately 1,200 beneficial and record holders.

- 20 -

inTEST CORPORATION
FORM 10-K
FOR THE YEAR ENDED DECEMBER 31, 2015

Item 5.   MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES (Continued)

No dividends were paid on our common stock in the years ended December 31, 2015 or 2014. We do not currently plan to pay cash dividends in the foreseeable future. Our current policy is to retain any future earnings for reinvestment in the operation and expansion of our business, including possible acquisitions of other businesses, technologies or products. Payment of any future dividends will be at the discretion of our Board of Directors.

Purchases of Equity Securities

The following table provides information with respect to purchases made by us or on our behalf of our common stock during the year ended December 31, 2015:

Period	Total Number of Shares Repurchased	Average Price Paid Per Share	Total Number of Shares Purchased as Part of Publicly Announced Plans      or Programs	Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs
December 1-31	41,332	$3.72	41,332	$4,846,000
Total	41,332	$3.72	41,332	$4,846,000

On October 27, 2015 our Board of Directors authorized the repurchase of up to $5.0 million of our common stock from time to time on the open market, in compliance with Rule 10b-18 under the Securities Exchange Act of 1934, or in privately negotiated transactions pursuant to a newly authorized stock repurchase plan. Repurchases to date have been made under a Rule 10b5-1 plan entered into with RW Baird & Co, which permits shares to be repurchased when we might otherwise be precluded from doing so under insider trading laws. The timing and amount of any shares repurchased under the 2015 Repurchase Plan will be determined by our management, based on our evaluation of market conditions and other factors. The 2015 Repurchase Plan does not obligate us to purchase any particular amount of common stock and may be suspended or discontinued at any time without prior notice. The 2015 Repurchase Plan will be funded using our operating cash flow or available cash.

As of December 31, 2015, we had repurchased 41,332 shares under this repurchase plan at a fair market value of $154,000. All of the repurchased shares were retired. Fees paid to our broker related to the repurchase of these shares totaled $1,000.

Item 6.   SELECTED FINANCIAL DATA

The following table contains certain selected consolidated financial data of inTEST and is qualified by the more detailed Consolidated Financial Statements and Notes thereto included elsewhere in this Annual Report on Form 10-K and should be read in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations" and the other financial information included in this Annual Report on Form 10-K.

	Years Ended December 31,
	2015	2014	2013	2012	2011
Condensed Consolidated Statement of Operations Data:	(in thousands, except per share data)
Net revenues	$38,889	$41,796	$39,426	$43,376	$47,266
Gross margin	18,698	20,462	19,015	19,059	22,893
Operating income	2,562	4,916	3,962	2,996	7,578
Net earnings	1,861	3,439	3,077	2,156	9,863
Net earnings per common share:
Basic	$0.18	$0.33	$0.30	$0.21	$0.97
Diluted	$0.18	$0.33	$0.30	$0.21	$0.96
Weighted average common shares outstanding :
Basic	10,473	10,432	10,364	10,273	10,148
Diluted	10,494	10,466	10,419	10,347	10,286

- 21 -

inTEST CORPORATION
FORM 10-K
FOR THE YEAR ENDED DECEMBER 31, 2015

Item 6.   SELECTED FINANCIAL DATA (Continued)

	As of December 31,
	2015	2014	2013	2012	2011
Condensed Consolidated Balance Sheet Data:	(in thousands)
Cash and cash equivalents	$25,710	$23,126	$19,018	$15,576	$13,957
Working capital	30,764	28,561	24,749	21,000	19,759
Total assets	39,984	38,738	35,481	32,399	31,237
Long-term debt, net of current portion	-	-	-	-	-
Total stockholders' equity	35,925	34,368	31,149	27,820	26,199

Item 7.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Risk Factors and Forward-Looking Statements

In addition to historical information, this discussion and analysis contains statements relating to possible future events and results that are considered "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements can often be identified by the use of forward-looking terminology such as "believes," "expects," "intends," "may," "will," "should" or "anticipates" or similar terminology. See Part I, Item 1 - "Business - Cautionary Statement Regarding Forward-Looking Statements" for examples of statements made in this report which may be "forward-looking statements." These statements involve risks and uncertainties and are based on various assumptions. Although we believe that our expectations are based on reasonable assumptions, investors and prospective investors are cautioned that such statements are only projections, and there cannot be any assurance that these events or results will occur. Information about the primary risks and uncertainties that could cause our actual future results to differ materially from our historic results or the results described in the forward-looking statements made in this report or presented elsewhere by Management from time to time are included in Part I, Item 1A - "Risk Factors."

Overview

This MD&A should be read in conjunction with the accompanying consolidated financial statements.

Our business and results of operations are substantially dependent upon the demand for ATE by semiconductor manufacturers and companies that specialize in the testing of ICs. Demand for ATE is driven by semiconductor manufacturers that are opening new, or expanding existing, semiconductor fabrication facilities or upgrading existing equipment, which in turn is dependent upon the current and anticipated market demand for semiconductors and products incorporating semiconductors. Such market demand can be the result of market expansion, development of new technologies or redesigned products to incorporate new features, or the replacement of aging equipment. In addition, we continue to focus on design improvements and new approaches for our own products which contribute to our net revenues as our customers adopt these new products.

In the past, the semiconductor industry has been highly cyclical with recurring periods of oversupply, which often have a severe impact on the semiconductor industry's demand for ATE, including the products we manufacture. This can cause wide fluctuations in both our orders and net revenues and, depending on our ability to react quickly to these shifts in demand, can significantly impact our results of operations. ATE market cycles are difficult to predict and in recent years have become more volatile and, in certain cases, shorter in duration. Because the market cycles are generally characterized by sequential periods of growth or declines in orders and net revenues during each cycle, year over year comparisons of operating results may not always be as meaningful as comparisons of periods at similar points in either up or down cycles. In addition, during both downward and upward cycles in our industry, in any given quarter, the trend in both our orders and net revenues can be erratic. This can occur, for example, when orders are canceled or currently scheduled delivery dates are accelerated or postponed by a significant customer or when customer forecasts and general business conditions fluctuate during a quarter. In addition to being cyclical, the ATE market has also developed a seasonal pattern in the last several years, with the second and third quarters being the periods of strong demand and the first and fourth quarters being periods of weakened demand. We believe this change has been driven by the strong demand for consumer products containing semiconductor content sold during the year-end holiday shopping season.

- 22 -

inTEST CORPORATION
FORM 10-K
FOR THE YEAR ENDED DECEMBER 31, 2015

Item 7.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

Third-party market share statistics are not available for the products we manufacture and sell into the ATE market; therefore, comparisons of period over period changes in our market share are not easily determined. As a result, it is difficult to ascertain if ATE market volatility in any period is the result of macro-economic or customer-specific factors impacting ATE market demand, or if we have gained or lost market share to a competitor during the period.

As part of our strategy to reduce the impact of ATE market volatility on our business operations, in 2009, we began to diversify our served markets to address the thermal test requirements of several other markets outside the ATE market. These include the automotive, consumer electronics, defense/aerospace, energy, industrial and telecommunications markets. We believe that these markets usually are less cyclical than the ATE market. While market share statistics exist for some of the markets we serve outside the ATE market, due to the nature of our highly specialized product offerings in these non-ATE markets, we do not expect broad market penetration in many of these markets and, therefore, do not anticipate developing meaningful market shares in these non-ATE markets. In addition, our orders and net revenues in any given period in these markets do not necessarily reflect the overall trends in these non-ATE markets due to our limited market shares. Consequently, we are continuing to evaluate buying patterns and opportunities for growth in these non-ATE markets that may affect our performance. The level of our orders and net revenues from these non-ATE markets has varied in the past, and we expect will vary significantly in the future, as we work to build our presence in these markets and establish new markets for our products.

While the majority of our orders and net revenues are derived from the ATE market, our operating results do not always follow the overall trend in the ATE market in any given period. We believe that these anomalies may be driven by a variety of factors within the ATE market, including, for example, changing product requirements, longer time periods between new product offerings by OEMs and changes in customer buying patterns. In particular, demand for our mechanical and electrical products, which are sold exclusively within the ATE market, and our operating margins in these product segments have been affected by shifts in the competitive landscape, including (i) customers placing heightened emphasis on shorter lead times (which places increased demands on our available engineering and production capacity increasing unit costs) and ordering in smaller quantities (which prevents us from acquiring component materials in larger volumes at lower cost and increasing unit costs), (ii) the practice of OEM manufacturers to specify other suppliers as primary vendors, with less frequent opportunities to compete for such designations, (iii) the in-house manufacturing activities of OEM manufacturers building certain products we have historically sold to them, including manipulators and docking hardware, which has had the impact of significantly reducing the size of the available market for those certain products (iv) the role of third-party test and assembly houses in the ATE market and their requirement of products with a greater range of use at the lowest cost, (v) customer supply chain management groups demanding lower prices and spreading purchases across multiple vendors, and (vi) certain competitors aggressively reducing their products' sales prices (causing us to either reduce our products' sales price to be successful in obtaining the sale or causing loss of the sale).

In addition, in recent periods we have seen instances where demand for ATE is not consistent for each of our product segments or for any given product within a particular product segment. This inconsistency in demand for ATE can be driven by a number of factors, but in most cases we have found the primary reason is unique customer-specific changes in demand for certain products driven by the needs of their customers or markets served. These shifts in market practices and customer-specific needs have had, and may continue to have, varying levels of impact on our operating results and are difficult to quantify or predict from period to period. Management has taken, and will continue to take, such actions it deems appropriate to adjust our strategies, products and operations to counter such shifts in market practices as they become evident.

Orders and Backlog

The following table sets forth, for the periods indicated, a breakdown of the orders received both by product segment and market.

- 23 -

inTEST CORPORATION
FORM 10-K
FOR THE YEAR ENDED DECEMBER 31, 2015

Item 7.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

	Years Ended December 31,		Change
Orders:	2015	2014	$	%
Thermal Products	$23,296	$23,866	$   (570)	(2)%
Mechanical Products	7,065	11,363	(4,298)	(38)
Electrical Products	7,087	7,212	(125)	(2)
	$37,448	$42,441	$(4,993)	(12)%
ATE market	$27,048	$30,214	$(3,166)	(10)%
Non-ATE market	10,400	12,227	(1,827)	(15)
	$37,448	$42,441	$(4,993)	(12)%

Total consolidated orders for the year ended December 31, 2015 were $37.4 million compared to $42.4 million for 2014. The decrease in orders primarily reflects reduced demand in the ATE market for our Mechanical Products segment, and, to a lesser extent, reduced demand from non-ATE markets for our Thermal Products segment.

Orders from customers in the ATE market for the year ended December 31, 2015 declined 10% on a consolidated basis as compared to 2014. We believe the reduced level of demand within the ATE market indicates, in part, cyclical softness within this market which began to impact the level of our orders during the second quarter of 2015 and continued into the first quarter of 2016. Furthermore, we believe the larger percentage decline for our Mechanical Products segment reflects that certain of this segment's customers have been on reduced capital spending budgets for much of 2015 which has decreased the amount of new equipment purchases they have been making this year. In addition, one particular customer of this segment was building a new facility in Southeast Asia during 2014 and, as a result, had a higher level of demand for certain of our products during 2014.

Orders from customers in various markets outside of the ATE market for the year ended December 31, 2015 declined 15% as compared to 2014, reflecting decreased demand from certain customers in the telecommunications market. This decrease was partially offset by an increase in orders from certain customers in the automotive market. As a percent of our total consolidated orders, orders from non-ATE markets were 28% in 2015 compared to 29% in 2014. The level of our orders in these non-ATE markets has varied in the past, and we expect it will vary significantly in the future as we build our presence in these markets and establish new markets for our products.

At December 31, 2015, our backlog of unfilled orders for all products was approximately $2.4 million compared with approximately $3.8 million at December 31, 2014. Our backlog includes customer orders which we have accepted, substantially all of which we expect to deliver in 2016. While backlog is calculated on the basis of firm purchase orders, a customer may cancel an order or accelerate or postpone currently scheduled delivery dates. Our backlog may be affected by the tendency of customers to rely on short lead times available from suppliers, including us, in periods of depressed demand. In periods of increased demand, there is a tendency towards longer lead times that has the effect of increasing backlog. As a result, our backlog at a particular date is not necessarily indicative of sales for any future period.

Net Revenues

The following table sets forth, for the periods indicated, a breakdown of the net revenues both by product segment and market.

- 24 -

inTEST CORPORATION
FORM 10-K
FOR THE YEAR ENDED DECEMBER 31, 2015

Item 7.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

	Years Ended December 31,		Change
Net revenues:	2015	2014	$	%
Thermal Products	$24,084	$23,446	$     638	3%
Mechanical Products	7,540	11,245	(3,705)	(33)
Electrical Products	7,265	7,105	160	2
	$38,889	$41,796	$(2,907)	(7)%
ATE market	$28,238	$30,737	$(2,499)	(8)%
Non-ATE market	10,651	11,059	(408)	(4)
	$38,889	$41,796	$(2,907)	(7)%

Total consolidated net revenues for the year ended December 31, 2015 were $38.9 million compared to $41.8 million for 2014. The decrease in consolidated net revenues primarily reflects the aforementioned reduced levels of demand from the ATE market and, in particular, from certain customers of our Mechanical Products segment, as previously discussed. While third-party market share statistics for the products we manufacture and sell into the ATE market are not available, and, therefore comparison of period over period change in our market share is not easily determined, we believe the reductions in demand experienced by our Mechanical Products segment may also indicate a potential loss of market share.

Net revenues from customers in various markets outside of the ATE market for the year ended December 31, 2015 declined by 4% as compared to 2014, primarily reflecting reduced demand from certain customers in the telecommunications market. This decrease was partially offset by an increase in net revenues from certain customers in the automotive market. As a percent of our total consolidated net revenues, net revenues from customers in non-ATE markets were relatively unchanged at 27% in both 2015 and 2014.

Product/Customer Mix

Our three product segments each have multiple products that we design, manufacture and market to our customers. Due to a number of factors, our products have varying levels of gross margin. The mix of products we sell in any period is ultimately determined by our customers' needs. Therefore, the mix of products sold in any given period can change significantly from the prior period. As a result, our consolidated gross margin can be significantly impacted in any given period by a change in the mix of products sold in that period.

We sell most of our products to semiconductor manufacturers and third-party test and assembly houses (end user sales) and to ATE manufacturers (OEM sales) who ultimately resell our equipment with theirs to semiconductor manufacturers. Our Thermal Products segment also sells into a variety of other markets including the automotive, consumer electronics, defense/aerospace, energy, industrial and telecommunications markets. The mix of customers during any given period will affect our gross margin due to differing sales discounts and commissions. For the years ended December 31, 2015 and 2014, our OEM sales as a percentage of net revenues were 6% and 9%, respectively.

OEM sales generally have a lower gross margin than end user sales, as OEM sales historically have had a more significant discount. Our current net operating margins on most OEM sales, however, are only slightly less than margins on end user sales because of the payment of third party sales commissions on most end user sales. We have also continued to experience demands from our OEM customers' supply chain managers to reduce our sales prices to them. If we cannot further reduce our manufacturing and operating costs, these pricing pressures will negatively affect our gross and operating margins.

- 25 -

inTEST CORPORATION
FORM 10-K
FOR THE YEAR ENDED DECEMBER 31, 2015

Item 7.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

Results of Operations

The results of operations for our three product segments are generally affected by the same factors. Separate discussions and analyses for each product segment would be repetitive and obscure any unique factors that affected the results of operations of our different product segments. The discussion and analysis that follows, therefore, is presented on a consolidated basis and includes discussion of factors unique to each product segment where significant to an understanding of that segment.

Year Ended December 31, 2015 Compared to Year Ended December 31, 2014

Net Revenues. Net revenues were $38.9 million for the year ended December 31, 2015 compared to $41.8 million for the same period in 2014, a decrease of $2.9 million or 7%. For the year ended December 31, 2015, the net revenues of our Thermal and Electrical Products segments increased $638,000 or 3% and $160,000 or 2%, respectively, while the net revenues of our Mechanical Products segment decreased by $3.7 million or 33%. We believe the decrease in our consolidated net revenues during 2015 primarily reflects the factors previously discussed in the Overview.

Gross Margin. Gross margin was 48% for the year ended December 31, 2015 compared to 49% for the same period in 2014. The reduction in the gross margin was primarily the result of our fixed operating costs not being as fully absorbed due to the lower net revenue levels in 2015 as compared to 2014. In absolute dollar terms, these costs decreased $81,000 from 2014 to 2015 but as a percentage of net revenues, these costs increased from 14% in 2014 to 15% in 2015. The reduction in our fixed operating costs in absolute dollar terms primarily reflects a reduction in salary and benefits expense in our Thermal and Mechanical Products segments as a result of a reduction in personnel.

Selling Expense. Selling expense was $5.8 million for the year ended December 31, 2015 compared to $5.7 million for the same period in 2014, an increase of $62,000 or 1%. The increase in selling expense primarily reflects higher levels of commissions as a result of changes in customer mix. 

Engineering and Product Development Expense. Engineering and product development expense was $3.9 million for the year ended December 31, 2015 compared to $3.6 million for the same period in 2014, an increase of $355,000 or 10%. The increase in engineering and product development expense primarily reflects higher salary and benefits expense for all of our products segments. The increase in salary and benefits expense was a result of both additional headcount and annual salary adjustments for existing staff.

General and Administrative Expense. General and administrative expense was $6.4 million for the year ended December 31, 2015 compared to $6.2 million for the same period in 2014, an increase of $173,000 or 3%. The increase primarily reflects increased spending related to our strategic initiatives, including $329,000 for due diligence and transaction related costs associated with a potential acquisition that we decided not to pursue. To a lesser extent, there was also an increase in salary and benefits expense reflecting both annual salary adjustments and performance-based incentive compensation for existing staff. These increases were partially offset by a decrease in board fees paid to our directors due to a reduction in the size of the board.

Income Tax Expense. For the year ended December 31, 2015, we recorded income tax expense of $722,000 compared to $1.5 million for the same period in 2014. Our effective tax rate was 28% for 2015 compared to 30% for 2014. On a quarterly basis, we record income tax expense or benefit based on the expected annualized effective tax rate for the various taxing jurisdictions in which we operate our businesses. The decrease in our effective tax rate in 2015 as compared to 2014 primarily reflects an increase in the level of tax credits available to offset current tax expense in 2015 as compared to 2014.

Liquidity and Capital Resources

As discussed more fully in the Overview, our business and results of operations are substantially dependent upon the demand for ATE by semiconductor manufacturers and companies that specialize in the testing of ICs. The cyclical and volatile nature of demand for ATE makes estimates of future revenues, results of operations and net cash flows difficult.

- 26 -

inTEST CORPORATION
FORM 10-K
FOR THE YEAR ENDED DECEMBER 31, 2015

Item 7.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

Our primary historical source of liquidity and capital resources has been cash flow generated by our operations and we manage our businesses to maximize operating cash flows as our primary source of liquidity. We use cash to fund growth in our operating assets, for new product research and development, for acquisitions and for stock repurchases.

Liquidity

Our cash and cash equivalents and working capital were as follows:

	December 31,
	2015	2014
Cash and cash equivalents	$25,710	$23,126
Working capital	$30,764	$28,561

As of December 31, 2015, $2.0 million of our cash and cash equivalents was held by our foreign subsidiaries. If these funds are needed for our operations in the U.S., we may be required to accrue and pay foreign taxes if we repatriate certain of these funds. During 2015, we repatriated $2.2 million from our foreign subsidiaries.

We currently expect our cash and cash equivalents and projected future cash flow to be sufficient to support our short term working capital requirements and the anticipated purchase of shares under the 2015 Repurchase Plan (which is discussed more fully in Note 13 to our consolidated financial statements.) However, we may need additional financial resources to consummate a significant acquisition if the consideration in such a transaction would require us to utilize a substantial portion of, or an amount equal to or in excess of, our available cash. We do not currently have any credit facilities under which we can borrow to help fund our working capital or other requirements.

In addition, in recent years, our Mechanical Products segment has experienced significant operating losses. We have undertaken actions at various times over the last few years to address these losses. On January 4, 2016, in conjunction with the formation of the inTEST EMS Products Division, we implemented a workforce reduction which resulted in our recording a restructuring charge of $99,000 in the first quarter of 2016. The annualized savings from these actions are estimated to be approximately $690,000. Our review of the operations of this product segment is ongoing with the goal of identifying additional opportunities for cost reduction and revenue growth. We cannot be certain that our efforts to restructure this operation to achieve profitability will be successful. These efforts could require us to utilize additional financial resources to pay severance or fund other costs associated with the restructuring of this operation, which would reduce the amount of our cash and cash equivalents available to fund our short term working capital requirements.

Cash Flows

Operating Activities. Net cash provided by operations for the year ended December 31, 2015 was $3.5 million. During 2015, we recorded net earnings of $1.9 million, which included non-cash charges of $754,000 for depreciation and amortization, $342,000 for excess and obsolete inventory charges and $168,000 of deferred income tax expense. During 2015, accounts receivable and accounts payable decreased $570,000 and $324,000, respectively, compared to the levels at the end of 2014, primarily reflecting the reduced level of business activity in 2015.

Investing Activities. During 2015, purchases of property and equipment were $599,000 which primarily represent additions to leased systems in our Thermal Products segment and computer hardware and software purchases related to a system upgrade for our domestic operations. We have no significant commitments for capital expenditures for 2016, however, depending upon changes in market demand, we may make such purchases as we deem necessary and appropriate.

Financing Activities. During 2015, we utilized $155,000 to repurchase 41,332 shares of our common stock under the 2015 Repurchase Plan.

- 27 -

inTEST CORPORATION
FORM 10-K
FOR THE YEAR ENDED DECEMBER 31, 2015

Item 7.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

New or Recently Adopted Accounting Standards

See Note 2 to the consolidated financial statements for information concerning the implementation and impact of new or recently adopted accounting standards.

Critical Accounting Policies

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, expenses and related disclosure of contingent assets and liabilities. On an on-going basis, we evaluate our estimates, including those related to inventories, long-lived assets, goodwill, identifiable intangibles and deferred income tax valuation allowances. We base our estimates on historical experience and on appropriate and customary assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Some of these accounting estimates and assumptions are particularly sensitive because of their significance to our consolidated financial statements and because of the possibility that future events affecting them may differ markedly from what had been assumed when the financial statements were prepared.

Inventory Valuation

Inventories are valued at cost on a first-in, first-out basis, not in excess of market value. 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. During 2015 and 2014, we recorded inventory obsolescence charges for excess and obsolete inventory of $342,000 and $344,000, respectively.

Goodwill, Intangible and Long-Lived Assets

We account for goodwill and intangible assets in accordance with Accounting Standards Codification ("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 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. 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 we determine this is the case, we are required to perform a two-step goodwill impairment test to identify potential goodwill impairment and measure the amount of goodwill impairment loss to be recognized. The two-step test is discussed below. If we determine that it is more-likely-than-not that the fair value of the reporting unit is greater than its carrying amounts, the two-step goodwill impairment test is not required.

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 two-step goodwill impairment test. In the Step I test, the fair value of a reporting unit is computed and 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. The two-step 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

- 28 -

inTEST CORPORATION
FORM 10-K
FOR THE YEAR ENDED DECEMBER 31, 2015

Item 7.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

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. As of December 31, 2015 and 2014, goodwill was $1.7 million. We did not record any impairment charges related to our goodwill during 2015 or 2014.

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. 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, no 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. As of December 31, 2015 and 2014, our indefinite-lived intangible asset was a trademark carried at $510,000. We did not record any impairment charges related to our indefinite-lived intangible asset during 2015 or 2014.

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. At December 31, 2015 and 2014, finite-lived intangibles and long-lived assets were $1.7 million and $2.2 million, respectively. We did not record any impairment charges related to our long-lived assets during 2015 or 2014.

Income Taxes

Deferred tax assets are analyzed to determine if there will be sufficient taxable income in the future in order to realize such assets. We assess all of the positive and negative evidence concerning the realizability of the deferred tax assets, including our historical results of operations for the recent past and our projections of future results of operations, in which we make subjective determinations of future events. If, after assessing all of the evidence, both positive and negative, a determination is made that the realizability of the deferred tax assets is not more likely than not, we establish a deferred tax valuation allowance for all or a portion of the deferred tax assets depending upon the specific facts. If any of the significant assumptions were changed, materially different results could occur, which could significantly change the amount of the deferred tax valuation allowance established. As of December 31, 2015 and 2014, we had a net deferred tax asset of $1.2 million and $1.4 million, respectively, and a deferred tax valuation allowance of $15,000 and $100,000, respectively.

Off -Balance Sheet Arrangements

There were no off-balance sheet arrangements during the year ended December 31, 2015 that have or are reasonably likely to have, a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to our interests.

Item 7A.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

This disclosure is not required for a smaller reporting company.

- 29 -

inTEST CORPORATION
FORM 10-K
FOR THE YEAR ENDED DECEMBER 31, 2015

Item 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Consolidated financial statements are set forth in this Report beginning at page F-1 and are incorporated by reference into this Item 8.

Item 9.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

Item 9A.  CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures, as such term is defined in Rule 13a-15(e) under the Exchange Act. Because there are inherent limitations in all control systems, a control system, no matter how well conceived and operated, can provide only reasonable, as opposed to absolute, assurance that the objectives of the control system are met. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Our management, including the CEO and CFO, does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent all error and all fraud. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected. Accordingly, our management has designed the disclosure controls and procedures to provide reasonable assurance that the objectives of the control system were met.

CEO/CFO Conclusions about the Effectiveness of the Disclosure Controls and Procedures. As required by Rule 13a-15(b), inTEST management, including our CEO and CFO, conducted an evaluation as of the end of the period covered by this Report, of the effectiveness of our disclosure controls and procedures. Based on that evaluation, our CEO and CFO concluded that, as of the end of the period covered by this Report, our disclosure controls and procedures were effective at the reasonable assurance level.

Changes in Internal Control Over Financial Reporting

During the period covered by this Report, there has been no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the period covered by this Report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Management's Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rule 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934, as amended, as a process designed by, or under the supervision of, our principal executive and principal financial officers and effected by our Board of Directors, management and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:

1. Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets;
2. Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and
3. Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the financial statements.

- 30 -

inTEST CORPORATION
FORM 10-K
FOR THE YEAR ENDED DECEMBER 31, 2015

Item 9A.  CONTROLS AND PROCEDURES (Continued)

Because of inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management assessed the effectiveness of our internal control over financial reporting as of December 31, 2015. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) on Internal Control-Integrated 2013 Framework. Based upon this assessment, management believes that, as of December 31, 2015, our internal control over financial reporting is effective at a reasonable assurance level.

This annual report does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting, as such an attestation is not required pursuant to rules of the Securities and Exchange Commission applicable to smaller reporting companies.

Item 9B.   OTHER INFORMATION

None.

PART III

Item 10.   DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The information required by this Item is incorporated by reference from our definitive proxy statement for our 2016 Annual Meeting of Stockholders to be filed with the SEC on or before April 29, 2016, or, if our proxy statement is not filed on or before April 29, 2016, will be filed by that date by an amendment to this Form 10-K.

Item 11.   EXECUTIVE COMPENSATION

The information required by this Item is incorporated by reference from our definitive proxy statement for our 2016 Annual Meeting of Stockholders to be filed with the SEC on or before April 29, 2016, or, if our proxy statement is not filed on or before April 29, 2016, will be filed by that date by an amendment to this Form 10-K.

Item 12.   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The information required by Item 201(d) of Regulation S-K is set forth below. The remainder of the information required by this Item 12 is incorporated by reference from our definitive proxy statement for our 2016 Annual Meeting of Stockholders to be filed with the SEC on or before April 29, 2016, or, if our proxy statement is not filed on or before April 29, 2016, will be filed by that date by an amendment to this Form 10-K.

The following table shows the number of securities that may be issued pursuant to our equity compensation plans (including individual compensation arrangements) as of December 31, 2015:

- 31 -

inTEST CORPORATION
FORM 10-K
FOR THE YEAR ENDED DECEMBER 31, 2015

Item 12.   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS (Continued)

Equity Compensation Plan Information
Plan Category		Number of securities to be issued upon exercise of outstanding options, warrants and rights	Weighted-average exercise price of outstanding options, warrants and rights	Number of securities remaining available for future issuance under equity compensation plans(1)
Equity compensation plans approved by security holders		-	-	562,500
Equity compensation plans not approved by security holders		-	-	-
Total		-	-	562,500
(1)	The securities that remain available for future issuance are issuable pursuant to the 2014 Stock Plan (500,000 shares) and the 2007 Stock Plan (62,500 shares).

Item 13.   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

The information required by this Item is incorporated by reference from our definitive proxy statement for our 2016 Annual Meeting of Stockholders to be filed with the SEC on or before April 29, 2016, or, if our proxy statement is not filed on or before April 29, 2016, will be filed by that date by an amendment to this Form 10-K.

Item 14.   PRINCIPAL ACCOUNTING FEES AND SERVICES

The information required by this Item is incorporated by reference from our definitive proxy statement for our 2016 Annual Meeting of Stockholders to be filed with the SEC on or before April 29, 2016, or, if our proxy statement is not filed on or before April 29, 2016, will be filed by that date by an amendment to this Form 10-K.

PART IV

Item 15.   EXHIBITS, FINANCIAL STATEMENT SCHEDULES

(a)     The documents filed as part of this Annual Report on Form 10-K are:

(i)     Our consolidated financial statements and notes thereto as well as the applicable report of our independent registered public accounting firm are included in Part II, Item 8 of this Annual Report on Form 10-K.
(ii)    The following financial statement schedule should be read in conjunction with the consolidated financial statements set forth in Part II, Item 8 of this Annual Report on Form 10-K:
                Schedule II -- Valuation and Qualifying Accounts
(iii)   The exhibits required by Item 601 of Regulation S-K are included under Item 15(b) of this Annual Report on Form 10-K.

(b)     Exhibits required by Item 601 of Regulation S-K:

A list of the Exhibits which are required by Item 601 of Regulation S-K and filed with this Report is set forth in the Exhibit Index immediately following the signature page, which Exhibit Index is incorporated herein by reference.

- 32 -

Signatures

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

inTEST Corporation
By:   /s/ Robert E. Matthiessen         Robert E. Matthiessen         President and Chief Executive Officer	March 29, 2016

Pursuant to the requirements of Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

/s/ Robert E. Matthiessen Robert E. Matthiessen, President, Chief Executive Officer and Director (Principal Executive Officer)	March 29, 2016
/s/ Hugh T. Regan, Jr. Hugh T. Regan, Jr., Treasurer, Chief Financial Officer and Secretary (Principal Financial Officer)	March 29, 2016
/s/ Alyn R. Holt Alyn R. Holt, Executive Chairman	March 29, 2016
/s/ Steven J. Abrams Steven J. Abrams, Esq., Director	March 29, 2016
/s/ Joseph W. Dews IV Joseph W. Dews IV, Director	March 29, 2016
/s/ William Kraut William Kraut, Director	March 29, 2016

- 33 -

Index to Exhibits

Exhibit Number	Description of Exhibit
3.1	Certificate of Incorporation. (1)
3.2	Bylaws as amended on June 23, 2014. (2)
10.1	Lease Agreement between Exeter 804 East Gate, LLC and the Company dated May 10, 2010. (3)
10.2	Lease Agreement between AMB-SGP Seattle/Boston, LLC and Temptronic Corporation (a subsidiary of the Company), dated October 25, 2010. (4)
10.3	Lease Agreements between Columbia California Warm Springs Industrial, LLC and inTEST Silicon Valley Corporation dated January 9, 2012. (5)
10.4	Guaranty Agreements between Columbia California Warm Springs Industrial, LLC and inTEST Corporation dated January 9, 2012. (5)
10.5	inTEST Corporation 2014 Stock Plan (6)(*)
10.6	inTEST Corporation 2007 Stock Plan. (7)(*)
10.7	Form of Restricted Stock Grant. (8)(*)
10.8	Form of Non-Qualified Stock Option Grant. (8)(*)
10.9	Form of Incentive Stock Option Grant. (8)(*)
10.10	Change of Control Agreement dated August 27, 2007 between the Company and Robert E. Matthiessen. (9)(*)
10.11	Change of Control Agreement dated August 27, 2007 between the Company and Hugh T. Regan, Jr. (9)(*)
10.12	Change of Control Agreement dated May 5, 2008 between the Company and James Pelrin. (10)(*)
10.13	Amendment to Change of Control Agreement dated December 31, 2008 between the Company and Robert E. Matthiessen. (11)(*)
10.14	Amendment to Change of Control Agreement dated December 31, 2008 between the Company and Hugh T. Regan, Jr. (11)(*)
10.15	Amendment to Change of Control Agreement dated December 31, 2008 between the Company and James Pelrin. (11)(*)
10.16	Compensatory Arrangements of Executive Officers and Directors. (*)(12)
14	Code of Ethics. (13)
21	Subsidiaries of the Company.
23	Consent of RSM US LLP.
31.1	Certification of Chief Executive Officer pursuant to Rule 13a-14(a).
31.2	Certification of Chief Financial Officer pursuant to Rule 13a-14(a).
32.1	Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

- 34 -

Index to Exhibits
(Continued)

(1)	Previously filed by the Company as an exhibit to the Company's Registration Statement on Form S-1, File No. 333-26457 filed May 2, 1997, and incorporated herein by reference.
(2)	Previously filed by the Company as an exhibit to the Company's Form 8-K dated June 23, 2014, File No. 001-36117, filed June 25, 2014, and incorporated herein by reference.
(3)	Previously filed by the Company as an exhibit to the Company's Form 8-K dated May 10, 2010, File No. 000-22529, filed May 13, 2010, and incorporated herein by reference.
(4)	Previously filed by the Company as an exhibit to the Company's Form 8-K dated October 27, 2010, File No. 000-22529, filed October 29, 2010, and incorporated herein by reference.
(5)	Previously filed by the Company as an exhibit to the Company's Form 10-Q for the quarter ended March 31, 2012, File No. 000-22529, filed May 15, 2012, and incorporated herein by reference.
(6)	Previously filed as an appendix to the Company's Proxy Statement filed April 30, 2014, and incorporated herein by reference.
(7)	Previously filed as an appendix to the Company's Proxy Statement filed April 27, 2007, and incorporated herein by reference.
(8)	Previously filed by the Company as an exhibit to the Company's Form 10-K for the year ended December 31, 2004, File No. 000-22529, filed March 31, 2005, and incorporated herein by reference.
(9)	Previously filed by the Company as an exhibit to the Company's Form 10-K for the year ended December 31, 2007, File No. 000-22529, filed March 31, 2008, and incorporated herein by reference.
(10)	Previously filed by the Company as an exhibit to the Company's Form 10-Q for the quarter ended June 30, 2008, File No. 000-22529, filed August 14, 2008, and incorporated herein by reference.
(11)	Previously filed by the Company as an exhibit to the Company's Form 10-Q for the quarter ended June 30, 2009, File No. 000-22529, filed August 14, 2009, and incorporated herein by reference.
(12)	Portions of this exhibit were previously filed on the Company's Current Report on Form 8-K dated January 22, 2016, File No. 001-36117, filed January 28, 2016, and incorporated herein by reference.
(13)	Previously filed by the Company as an exhibit to the Company's Form 10-K for the year ended December 31, 2003, File No. 000-22529, filed March 30, 2004, and incorporated herein by reference.
(*)	Indicates a management contract or compensatory plan, contract or arrangement in which a director or executive officers participate.

- 35 -

inTEST CORPORATION

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND
FINANCIAL STATEMENT SCHEDULE

	Page
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM	F - 1
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated Balance Sheets as of December 31, 2015 and 2014	F - 2
Consolidated Statements of Operations for the years ended        December 31, 2015 and 2014	F - 3
Consolidated Statements of Comprehensive Earnings for the years        ended December 31, 2015 and 2014	F - 3
Consolidated Statements of Stockholders' Equity for the years        ended December 31, 2015 and 2014	F - 4
Consolidated Statements of Cash Flows for the years ended        December 31, 2015 and 2014	F - 5
Notes to Consolidated Financial Statements	F - 6
FINANCIAL STATEMENT SCHEDULE
Schedule II - Valuation and Qualifying Accounts	F - 23

- 36 -

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To The Board of Directors and Stockholders
inTEST Corporation



We have audited the accompanying consolidated balance sheets of inTEST Corporation and subsidiaries as of December 31, 2015 and 2014, and the related consolidated statements of operations, comprehensive earnings, stockholders' equity, and cash flows for the years then ended. Our audits also included the financial statement schedule of inTEST Corporation listed in Item 15(a). These financial statements and financial statement schedule are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements and schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of inTEST Corporation and subsidiaries as of December 31, 2015 and 2014, and the results of their operations and their cash flows for the years then ended in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly in all material respects the information set forth therein.

/s/ RSM US LLP

Blue Bell, Pennsylvania
March 29, 2016

F - 1

inTEST CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)

                                                                       December 31,
                                                                   --------------------
                                                                     2015        2014
ASSETS:                                                            ---------   --------
Current assets:
  Cash and cash equivalents                                         $25,710    $23,126
  Trade accounts receivable, net of allowance for
    doubtful accounts of $146 and $146, respectively                  4,395      5,034
  Inventories                                                         3,520      3,769
  Deferred tax assets                                                   559        529
  Prepaid expenses and other current assets                             639        473
     Total current assets                                            34,823     32,931
Property and equipment:
  Machinery and equipment                                             4,377      4,322
  Leasehold improvements                                                603        593
     Gross property and equipment                                     4,980      4,915
  Less: accumulated depreciation                                     (3,868)    (3,647)
     Net property and equipment                                       1,112      1,268

Deferred tax assets                                                     686        884
Goodwill                                                              1,706      1,706
Intangible assets, net                                                1,104      1,393
Restricted certificates of deposit                                      350        350
Other assets                                                            203        206
     Total assets                                                   $39,984    $38,738
                                                                    =======    =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Accounts payable                                                  $   909    $ 1,234
  Accrued wages and benefits                                          1,466      1,528
  Accrued rent                                                          657        615
  Accrued professional fees                                             363        390
  Accrued sales commissions                                             297        328
  Other current liabilities                                             367        275
     Total current liabilities                                        4,059      4,370

Commitments and Contingencies (Notes 9 and 11)

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;
     10,549,423 and 10,595,755 shares issued, respectively              105        106
  Additional paid-in capital                                         26,286     26,321
  Retained earnings                                                   9,013      7,152
  Accumulated other comprehensive earnings                              725        993
  Treasury stock, at cost; 33,077 and 33,077 shares, respectively      (204)      (204)
     Total stockholders' equity                                      35,925     34,368

     Total liabilities and stockholders' equity                     $39,984    $38,738
                                                                    =======    =======

See accompanying Notes to Consolidated Financial Statements.

F - 2

inTEST CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share data)

                                                          Years Ended December 31,
                                                          ------------------------
                                                            2015             2014
                                                          -------          -------
Net revenues                                              $38,889          $41,796
Cost of revenues                                           20,191           21,334
      Gross margin                                         18,698           20,462

Operating expenses:
   Selling expense                                          5,797            5,735
   Engineering and product development expense              3,935            3,580
   General and administrative expense                       6,404            6,231
      Total operating expenses                             16,136           15,546

Operating income                                            2,562            4,916
Other income (expense)                                         21               (7)

Earnings before income tax expense                          2,583            4,909
Income tax expense                                            722            1,470

      Net earnings                                        $ 1,861          $ 3,439
                                                          =======          =======
Net earnings per common share:
  Basic                                                    $0.18            $0.33
  Diluted                                                  $0.18            $0.33
Weighted average common shares outstanding:
  Basic                                                 10,473,210       10,431,743
  Diluted                                               10,493,830       10,466,064

See accompanying Notes to Consolidated Financial Statements.

inTEST CORPORATION
CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS
(In thousands)

                                                          Years Ended December 31,
                                                          ------------------------
                                                            2015             2014
                                                          -------          -------
Net earnings                                              $ 1,861          $ 3,439

Foreign currency translation adjustments                     (268)            (354)

Comprehensive earnings                                    $ 1,593          $ 3,085
                                                          =======          =======

See accompanying Notes to Consolidated Financial Statements.

F - 3

inTEST CORPORATION
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(In thousands, except share data)

                                                                           Accumulated
                                  Common Stock   Additional                   Other                  Total
                               -----------------  Paid-In     Retained    Comprehensive  Treasury Stockholders'
                                 Shares   Amount  Capital     Earnings       Earnings     Stock      Equity
                               ---------- ------ ---------- ------------  -------------  -------- -------------
Balance, January 1, 2014       10,590,755  $ 106   $26,187    $  3,713       $1,347      $  (204)     $31,149

Net earnings                            -      -         -       3,439            -            -        3,439
Other comprehensive loss                -      -         -           -         (354)           -         (354)
Amortization of deferred
  compensation related to
  restricted stock                      -      -       134           -            -            -          134
Forfeiture of unvested shares
  of restricted stock              (5,000)     -         -           -            -            -            -
Issuance of unvested shares
  of restricted stock              10,000      -         -           -            -            -            -
                               ----------  -----   -------    --------       ------      -------      -------

Balance, December 31, 2014     10,595,755    106    26,321       7,152          993         (204)      34,368

Net earnings                            -      -         -       1,861            -            -        1,861
Other comprehensive loss                -      -         -           -         (268)           -         (268)
Amortization of deferred
  compensation related to
  restricted stock                      -      -       119           -            -            -          119
Forfeiture of unvested shares
  of restricted stock              (5,000)     -         -           -            -            -            -
Repurchase and retirement of
  common stock                    (41,332)    (1)     (154)          -            -            -         (155)
                               ----------  -----   -------    --------       ------      -------      -------

Balance, December 31, 2015     10,549,423  $ 105   $26,286    $  9,013       $  725      $  (204)     $35,925
                               ==========  =====   =======    ========       ======      =======      =======

See accompanying Notes to Consolidated Financial Statements.

F - 4

inTEST CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)

                                                                          Years Ended December 31,
                                                                          ------------------------
                                                                            2015             2014
                                                                          -------          -------
CASH FLOWS FROM OPERATING ACTIVITIES
  Net earnings                                                            $ 1,861          $ 3,439
  Adjustments to reconcile net earnings to net cash provided by
   operating activities:
    Depreciation and amortization                                             754              879
    Provision for excess and obsolete inventory                               342              344
    Foreign exchange loss                                                      33               44
    Amortization of deferred compensation related to restricted stock         119              134
    Loss on sale of property and equipment                                     15               44
    Proceeds from sale of demonstration equipment, net of gain                214              161
    Deferred income tax expense                                               168              318
    Changes in assets and liabilities:
      Trade accounts receivable                                               570              610
      Inventories                                                            (113)            (893)
      Prepaid expenses and other current assets                              (174)            (113)
      Restricted certificates of deposit                                        -              100
      Other assets                                                            (15)             (17)
      Accounts payable                                                       (324)             172
      Accrued wages and benefits                                              (36)             (75)
      Accrued rent                                                             42               38
      Accrued professional fees                                               (25)              25
      Accrued sales commissions                                               (31)              23
      Other current liabilities                                                98             (104)
                                                                          -------          -------
Net cash provided by operating activities                                   3,498            5,129
                                                                          -------          -------

CASH FLOWS FROM INVESTING ACTIVITIES
  Purchase of property and equipment                                         (599)            (831)
  Proceeds from sale of property and equipment                                  -                8
                                                                          -------          -------
Net cash used in investing activities                                        (599)            (823)
                                                                          -------          -------

CASH FLOWS FROM FINANCING ACTIVITIES
  Repurchases of common stock                                                (155)               -
                                                                          -------          -------
Net cash used in financing activities                                        (155)               -
                                                                          -------          -------
Effects of exchange rates on cash                                            (160)            (198)
                                                                          -------          -------
Net cash provided by all activities                                         2,584            4,108
Cash and cash equivalents at beginning of period                           23,126           19,018
                                                                          -------          -------
Cash and cash equivalents at end of period                                $25,710          $23,126
                                                                          =======          =======
Cash payments for:
  Domestic and foreign income taxes                                       $   792          $ 1,213


SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
Issuance of unvested shares of restricted stock                           $     -          $    41
Forfeiture of unvested shares of restricted stock                         $   (20)         $   (20)

See accompanying Notes to Consolidated Financial Statements.

F - 5

inTEST CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share data)

(1)   NATURE OF OPERATIONS

We are an independent designer, manufacturer and marketer of thermal, mechanical 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, we sell our thermal products in markets outside the ATE market, such as the automotive, consumer electronics, defense/aerospace, energy, industrial and telecommunications markets.

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: Thermal Products, Mechanical 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.

The semiconductor 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 semiconductor 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.  In January 2016, we implemented a restructuring plan, as discussed further in Note 17, the goal of which is to return our Mechanical Products segment to profitability.  These efforts could cause us to incur substantial costs and may not be successful.  We also continue to implement an acquisition strategy that may cause us to incur substantial expense in reviewing and evaluating potential transactions.  We may or may not be successful in locating suitable businesses to acquire.  In addition, if we are able to complete an acquisition, we may not be able to successfully integrate the acquired business 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.

(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 ("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 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.

F - 6

inTEST CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share data)

(2)   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

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. There was no bad debt expense recorded in either of the years ended December 31, 2015 or 2014. Cash flows from accounts receivable are recorded in operating cash flows.

Fair Value of Financial Instruments

Our financial instruments, principally accounts receivable and accounts payable, are carried at cost which approximates fair value, due to the short maturities of the accounts.

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 $342 and $344 for the years ended December 31, 2015 and 2014, 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 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 $465 and $524 for the years ended December 31, 2015 and 2014, respectively.

Goodwill, Intangible and Long-Lived Assets

We account for goodwill and intangible assets in accordance with Accounting Standards Codification ("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 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. 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 we determine this is the case, we are required to perform a two-step goodwill impairment test to identify potential goodwill impairment and measure the amount of goodwill impairment loss to be recognized. The two-step test is discussed below. If we determine that it is more-likely-than-not that the fair value of the reporting unit is greater than its carrying amounts, the two-step goodwill impairment test is not required.

F - 7

inTEST CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share data)

(2)   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

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 two-step goodwill impairment test. In the Step I test, the fair value of a reporting unit is computed and 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. The two-step 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 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 at least 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, no 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 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 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 plans in Note 12.

Subsequent Events

We have made an assessment of our operations and determined that there were no material subsequent events requiring adjustment to, or disclosure in, our consolidated financial statements for the year ended December 31, 2015 other than the events discussed in Note 17.

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 collection of the related receivable 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.

F - 8

inTEST CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share data)

(2)   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

In addition, in our Thermal Products segment, we lease certain of our equipment to customers under non-cancellable operating leases. These leases generally have an initial term of six months. We recognize revenue for these leases on a straight-line basis over the term of the lease.

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.

Foreign Currency

For our foreign subsidiary 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, 2015 and 2014, foreign currency transaction losses were $33 and $44, 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 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:

F - 9

inTEST CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share data)

(2)   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

	Years Ended December 31,
	2015	2014
Weighted average common shares outstanding - basic	10,473,210	10,431,743
Potentially dilutive securities:
Unvested shares of restricted stock and employee stock options	20,620	34,321
Weighted average common shares outstanding - diluted	10,493,830	10,466,064
Average number of potentially dilutive securities excluded from   calculation	-	4,753

Effect of Recently Issued Amendments to Authoritative Accounting Guidance

In February 2016, the Financial Accounting Standards Board ("FASB") issued amendments to the current guidance on accounting for lease transactions which is presented in ASC Topic 842 (Leases). 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 12 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. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. We are currently evaluating the impact of the implementation of these amendments on our consolidated financial statements.

In January 2016, the FASB issued amendments to the current guidance on the recognition and measurement of financial assets and financial liabilities which is presented in ASC Topic 825 (Financial Instruments). The intent of the updated guidance is to enhance the reporting model for financial instruments to provide users of financial statements with improved decision-making information. The updated guidance includes amendments to address aspects of recognition, measurement, presentation and disclosure. Changes included in the amendments are the requirement to measure equity investments at fair value, except those accounted for under the equity method of accounting or those that result in the consolidation of an investee, with changes in fair value recognized in net income; the requirement for a qualitative assessment to identify impairment of equity investments without readily determinable fair values; and the requirement for separate presentation of financial assets and financial liabilities by measurement category and form of financial asset on the balance sheet or in the accompanying notes to the financial statements. The amendments are effective for us as of January 1, 2018. Early application is permitted. We do not expect the implementation of these amendments to have a material impact on our consolidated financial statements.

In November 2015, the FASB issued amendments to update the current guidance on the balance sheet classification of deferred taxes which is presented in ASC Topic 740 (Income Taxes). The purpose of the amendments is to simplify the presentation of deferred tax assets. This guidance requires deferred tax assets and liabilities, along with related valuation allowances, to be classified as noncurrent on the balance sheet. As a result, each tax jurisdiction will now only have one net noncurrent deferred tax asset or liability. The new guidance does not change the existing requirement that prohibits offsetting deferred tax liabilities from one jurisdiction against deferred tax assets of another jurisdiction. The amendments are effective for us as of January 1, 2017. Early application is permitted. We currently plan to elect early application of this guidance effective January 1, 2016. We do not expect the implementation of these amendments to have a material impact on our consolidated financial statements.

In September 2015, the FASB issued amendments to update the current guidance on accounting for measurement period adjustments in a business combination which is presented in ASC Topic 805 (Business Combinations). This guidance requires an entity to recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined; record, in the same period's financial statements, the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date; and present separately on the face of the income statement or disclose in the notes the portion of the amount recorded in current-period earnings by line item that would

F - 10

inTEST CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share data)

(2)   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date. The amendments are effective for us as of January 1, 2016, with early application permitted for financial statements that have not been issued. We do not expect the implementation of these amendments to have a material impact on our consolidated financial statements.

In July 2015, the FASB issued amendments to update the current guidance on the subsequent measurement of inventory, which is presented in ASC Topic 330 (Inventory). The purpose of the amendments is to simplify the subsequent measurement of inventory and reduce the number of potential outcomes. It applies to all inventory other than inventory measured using last-in, first-out or the retail inventory method. Current guidance requires an entity to measure inventory at the lower of cost or market. Market could be replacement cost, net realizable value, or net realizable value less a normal profit margin. The updated guidance amends this to require that an entity measure inventory within the scope of the updated guidance at the lower of cost and net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. The amendments are effective for us as of January 1, 2017. We do not expect the implementation of these amendments to have a material impact on our consolidated financial statements.

In May 2014, the FASB issued new guidance on the recognition of revenue from contracts with customers. This guidance is presented in ASC Topic 606 (Revenue from Contracts with Customers). This new guidance will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. Companies can use either the retrospective or cumulative effect transition method. In August 2015, the FASB deferred the effective date of this new guidance for one additional year. As a result, this new guidance is effective for us on January 1, 2018. Early application is only permitted as of the prior effective date, which in our case would be as of January 1, 2017. We have not yet selected a transition method and we are still evaluating the effect that this guidance will have on our consolidated financial statements and related disclosures.

(3)   GOODWILL, INTANGIBLE AND LONG-LIVED ASSETS

Goodwill and intangible assets on our balance sheets are the result of our acquisitions of Sigma Systems Corp. ("Sigma") in October 2008 and Thermonics, Inc. ("Thermonics") in January 2012.

Goodwill

All of our goodwill is allocated to our Thermal Products segment. There were no changes in the amount of the carrying value of goodwill for the year ended December 31, 2015.

Intangible Assets

The following table provides further detail about our intangible assets as of December 31, 2015 and 2014:

	December 31, 2015
	Gross Carrying Amount	Accumulated Amortization	Net Carrying Amount
Finite-lived intangible assets:
Customer relationships	$1,480	$1,166	$   314
Patented technology	590	386	204
Software	270	196	74
Trade name	140	138	2
Total finite-lived intangible assets	2,480	1,886	594
Indefinite-lived intangible assets:
Sigma trademark	510	-	510
Total intangible assets	$2,990	$1,886	$1,104

F - 11

inTEST CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share data)

(3)   GOODWILL, INTANGIBLE AND LONG-LIVED ASSETS (Continued)

	December 31, 2014
	Gross Carrying Amount	Accumulated Amortization	Net Carrying Amount
Finite-lived intangible assets:
Customer relationships	$1,480	$   979	$   501
Patented technology	590	346	244
Software	270	169	101
Trade name	140	103	37
Total finite-lived intangible assets	2,480	1,597	883
Indefinite-lived intangible assets:
Sigma trademark	510	-	510
Total intangible assets	$2,990	$1,597	$1,393

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 finite-lived assets have any residual value. The following table provides further information about the estimated useful lives of our finite-lived intangible assets as of December 31, 2015:

	Estimated Useful Life	Remaining Estimated Useful Life at Dec. 31, 2015
	- - - - (in months) - - - -
Finite-lived intangible assets resulting from the acquisition of Sigma:
Customer relationships	72	-
Software	120	33
Patented technology	60	-
Finite-lived intangible assets resulting from the acquisition of Thermonics:
Customer relationships	72	24.5
Trade name	48	.5
Patented technology	132	84.5

The following table sets forth changes in the amount of the carrying value of finite-lived intangible assets for the year ended December 31, 2015:

Balance - January 1, 2015	$  883
Amortization	(289)
Balance - December 31, 2015	$  594

Total amortization expense for the years ended December 31, 2015 and 2014 was $289 and $355, respectively. The following table sets forth the estimated annual amortization expense for our finite-lived intangible assets for each of the next five years:

2016	$229
2017	212
2018	65
2019	39
2020	30

F - 12

inTEST CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share data)

(3)   GOODWILL, INTANGIBLE AND LONG-LIVED ASSETS (Continued)

Impairment of Goodwill and Indefinite Life Intangible Assets

During December 2015 and 2014, we assessed our goodwill and indefinite life intangible asset 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 rates used in 2015 and 2014 for the discounted cash flows were 20% and 17%, 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 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 2015 and 2014, we performed a Step I test to identify potential impairment, in which the fair value of the Thermal Products 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 84% or $12,019 at December 31, 2015 and by 68% or $15,971 at December 31, 2014.

During the indefinite life intangible asset impairment assessment in both 2015 and 2014, we compared the fair value of our intangible asset with its carrying amount. This assessment indicated no impairment existed as the fair value of the intangible assets exceeded their carrying values in both 2015 and 2014.

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

As previously noted, our long-lived assets consist of our finite-lived intangible assets and property and equipment. During both December 2015 and 2014, due to continued operating losses experienced in our Mechanical Products segment, we assessed the long-lived assets of this segment for impairment. Our assessments indicated that the property and equipment that is allocated to this segment was not impaired. During 2015 and 2014, we did not review our Thermal and Electrical Products segment's long lived assets for impairment as there were no events or changes in business circumstances that would indicate an impairment might exist.

(4)   MAJOR CUSTOMERS

During the years ended December 31, 2015 and 2014, Hakuto Co. Ltd., one of our distributors, accounted for 12% and 11% of our consolidated net revenues, respectively. These revenues were generated by our Thermal Products segment. During the year ended December 31, 2014, Texas Instruments Incorporated accounted for 13% of our consolidated net revenues. While all three of our operating segments sold products to this customer, these revenues were primarily generated by our Mechanical Products and Electrical Products segments. During the years ended December 31, 2015 and 2014, no other customer accounted for 10% or more of our consolidated net revenues.

(5)   INVENTORIES

Inventories held at December 31 were comprised of the following:

	2015	2014
Raw materials	$2,535	$2,505
Work in process	295	406
Inventory consigned to others	119	129
Finished goods	571	729
Total inventories	$3,520	$3,769

F - 13

inTEST CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share data)

(6)  OTHER CURRENT LIABILITIES

Other current liabilities at December 31 were comprised of the following:

	2015	2014
Deferred revenue and customer deposits	$173	$  70
Accrued warranty	94	118
Domestic and foreign income taxes payable	26	22
Other	74	65
Total other current liabilities	$367	$275

(7)   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 30 days prior to their expiration dates for successive terms of not less than one year until lease expiration. Our outstanding letters of credit at December 31, 2015 and 2014 consisted of the following:

		L/C	Lease	Letters of Credit Amount Outstanding
Facility	Original L/C Issue Date	Expiration     Date	Expiration     Date	Dec. 31   2015	Dec. 31,   2014
Mt. Laurel, NJ	3/29/2010	4/01/2016	4/30/2021	$250	$250
Mansfield, MA	10/27/2010	11/08/2016	8/31/2021	100	100
				$350	$350

(8)   EQUIPMENT LEASING

In our Thermal Products segment, we lease certain of our equipment to customers under non-cancellable operating leases. These leases generally have an initial term of six months. We recognize revenue for these leases on a straight-line basis over the term of the lease.

The total cost of leased equipment at December 31, 2015 and 2014 was $338 and $692, respectively, and is included in Machinery and Equipment on our balance sheet. As of December 31, 2015 and 2014, accumulated depreciation for leased equipment was $124 and $167, respectively.

As of December 31, 2015, total minimum payments receivable under non-cancellable operating leases were $55. All of these payments will be received in 2016.

(9)   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 2021. Total rental expense for the years ended December 31, 2015 and 2014 was $1,351 and $1,307, 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

F - 14

inTEST CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share data)

(9)   COMMITMENTS AND CONTINGENCIES (Continued)

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, 2015 are as follows:

2016	$1,149
2017	1,097
2018	1,014
2019	1,006
2020	998
Thereafter	508
Total	$5,772

(10)  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, 2015 and 2014, 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,
	2015	2014
Domestic	$1,868	$4,061
Foreign	715	848
Total	$2,583	$4,909

Income tax expense (benefit) was as follows:

	Years Ended December 31,
	2015	2014
Current
Domestic -- Federal	$ 523	$1,073
Domestic -- state	45	78
Foreign	(14)	1
Total	$ 554	$1,152
Deferred
Domestic -- Federal	$   12	$   401
Domestic -- state	(9)	256
Foreign	165	(339)
Total	168	318
Income tax expense	$ 722	$1,470

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, 2015 and 2014: 

F - 15

inTEST CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share data)

(10)  INCOME TAXES (Continued)

	December 31,
Deferred tax assets:	2015	2014
Depreciation of property and equipment	$   580	$   596
Intangibles	279	224
Net operating loss ("NOL") (state and foreign)	264	513
Inventories	186	184
Accrued vacation pay and stock-based compensation	151	126
Tax credit carryforwards (foreign, research and AMT)	-	92
Allowance for doubtful accounts	55	56
Acquisition costs	31	34
Accrued warranty	5	6
Other	13	21
Total	1,564	1,852
Valuation allowance	(15)	(100)
Deferred tax assets	1,549	1,752
Deferred tax liabilities:
Net intangible assets	(222)	(232)
Unremitted earnings of foreign subsidiaries	(82)	(107)
Deferred tax liabilities	(304)	(339)
Net deferred tax asset	$1,245	$ 1,413

The net change in the valuation allowance for the years ended December 31, 2015 and 2014 were decreases of $85 and $187, 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 2035.

An analysis of the effective tax rate for the years ended December 31, 2015 and 2014 and a reconciliation from the expected statutory rate of 34% is as follows:

		Years Ended December 31,
		2015	2014
Expected income tax provision at U.S. statutory rate		$ 878	$1,669
Increase (decrease) in tax from:
	Current year tax credits (foreign and research)	(207)	(179)
	Changes in valuation allowance	(85)	(187)
	Domestic production activities deduction	(68)	(130)
	Foreign income tax rate differences	(64)	(63)
	Deemed dividend from foreign subsidiaries	151	208
	NOL carryforwards utilized	99	93
	Domestic tax expense, net of Federal benefit	33	52
	Nondeductible expenses	15	7
	Other	(30)	-
Income tax expense		$ 722	$1,470

F - 16

inTEST CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share data)

(10)  INCOME TAXES (Continued)

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, 2015 and 2014, 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, 2012 and thereafter are subject to examination by the relevant taxing authorities.

(11)  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.

(12)  STOCK-BASED COMPENSATION PLAN

As of December 31, 2015, we have unvested restricted stock awards granted under the inTEST Corporation 2007 Stock Plan (the "2007 Stock Plan"). The 2007 Stock Plan was approved at our annual meeting of stockholders held on June 13, 2007. 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. As of December 31, 2015, 62,500 shares remain available to grant under the 2007 Stock Plan.

In addition, at our annual meeting on June 25, 2014, our stockholders approved the inTEST Corporation 2014 Stock Plan (the "2014 Stock Plan"). The 2014 Stock Plan 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. As of December 31, 2015, no stock awards have been granted under the 2014 Stock Plan.

Our unvested restricted stock awards outstanding are accounted for based on their grant date fair value. As of December 31, 2015, total compensation expense to be recognized in future periods was $187. All of this expense is related to unvested shares of restricted stock. The weighted average period over which this expense is expected to be recognized is 1.7 years.

Stock Options

We did not grant any stock options during 2015 or 2014. During the year ended December 31, 2015, there were no stock options outstanding. The following table summarizes the stock option activity for the year ended December 31, 2014:

	Number of Shares	Weighted Average Exercise Price
Options outstanding, January 1, 2014 (10,000 exercisable)	10,000	$5.66
Granted	-	-
Exercised	-	-
Canceled	(10,000)	5.66
Options outstanding, December 31, 2014	-	-

Restricted Stock Awards
We record compensation expense for restricted stock awards (unvested 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 2015 and 2014, related to unvested shares:

F - 17

inTEST CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share data)

(12)  STOCK-BASED COMPENSATION PLAN (Continued)

	Years Ended December 31,
	2015	2014
Cost of revenues	$   10	$   11
Selling expense	5	6
Engineering and product development expense	10	16
General and administrative expense	94	101
	$119	$134

There was no compensation expense capitalized in 2015 or 2014. The following table summarizes the activity related to unvested shares for the two years ended December 31, 2015:

	Number of Shares	Weighted Average Grant Date Fair Value
Unvested shares outstanding, January 1, 2014	180,000	$3.02
Granted	10,000	4.14
Vested	(83,125)	2.31
Forfeited	(5,000)	3.97
Unvested shares outstanding, December 31, 2014	101,875	3.66
Granted	-	-
Vested	(33,125)	3.65
Forfeited	(5,000)	3.97
Unvested shares outstanding, December 31, 2015	63,750	3.64

The total fair value of the shares that vested during the years ended December 31, 2015 and 2014 was $138 and $351, respectively, as of the vesting dates of these shares.

(13)  STOCK REPURCHASE PLAN

On October 27, 2015, our Board of Directors authorized the repurchase of up to $5,000 of our common stock from time to time on the open market, in compliance with Rule 10b-18 under the Securities Exchange Act of 1934, or in privately negotiated transactions pursuant to a newly authorized stock repurchase plan. Repurchases may also be made under a Rule 10b5-1 plan entered into with RW Baird & Co, which permits shares to be repurchased when we might otherwise be precluded from doing so under insider trading laws. The timing and amount of any shares repurchased under the 2015 Repurchase Plan will be determined by our management, based on our evaluation of market conditions and other factors. The 2015 Repurchase Plan does not obligate us to purchase any particular amount of common stock and may be suspended or discontinued at any time without prior notice. The 2015 Repurchase Plan will be funded using our operating cash flow or available cash.

As of December 31, 2015, we had repurchased 41,332 shares under this repurchase plan at a cost of $155, which included fees paid to our broker of $1. All of the repurchased shares were retired.

(14)  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, Temptronic Corporation and inTEST Silicon Valley Corporation 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 ratably over four years. Matching contributions are discretionary. For the years ended December 31, 2015 and 2014, we recorded $329 and $317 of expense for matching contributions, respectively.

F - 18

inTEST CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share data)

(15)  SEGMENT INFORMATION

We have three reportable segments, which are also our reporting units: Thermal Products, Mechanical Products and Electrical Products.

The Thermal Products segment includes the operations of Temptronic Corporation, Thermonics, Sigma, inTEST Thermal Solutions 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, Thermonics and Sigma product lines. In addition, this segment provides post warranty service and support.

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 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 markets outside of the ATE market, including the automotive, consumer electronics, defense/aerospace, energy, industrial and telecommunications markets. Intercompany pricing between segments is either a multiple of cost for component parts or list price for finished goods.

	Years Ended December 31,
	2015	2014
Net revenues from unaffiliated customers:
Thermal Products	$24,084	$23,446
Mechanical Products	7,539	11,245
Electrical Products	7,266	7,105
	$38,889	$41,796
Depreciation/amortization:
Thermal Products	$581	$720
Mechanical Products	79	87
Electrical Products	94	72
	$754	$879
Operating income (loss):
Thermal Products	$4,517	$4,740
Mechanical Products	(1,902)	(18)
Electrical Products	673	781
Corporate	(726)	(587)
	$2,562	$4,916
Earnings (loss) before income tax expense (benefit):
Thermal Products	$4,479	$4,699
Mechanical Products	(1,874)	(5)
Electrical Products	704	802
Corporate	(726)	(587)
	$2,583	$4,909
Income tax expense (benefit):
Thermal Products	$1,252	$1,407
Mechanical Products	(524)	(2)
Electrical Products	197	240
Corporate	(203)	(175)
	$   722	$   1,470

F - 19

inTEST CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share data)

(15)  SEGMENT INFORMATION (Continued)

	Years Ended December 31,
	2015	2014
Net earnings (loss):
Thermal Products	$3,227	$3,292
Mechanical Products	(1,350)	(3)
Electrical Products	507	562
Corporate	(523)	(412)
	$1,861	$3,439
Capital expenditures:
Thermal Products	$389	$595
Mechanical Products	101	96
Electrical Products	109	140
	$599	$831
	December 31,
	2015	2014
Identifiable assets:
Thermal Products	$16,983	$26,211
Mechanical Products	19,733	7,801
Electrical Products	3,268	4,726
	$39,984	$38,738

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,
	2015	2014
Net revenues from unaffiliated customers:
U.S.	$14,294	$14,363
Foreign	24,595	27,433
	$38,889	$41,796
	December 31,
	2015	2014
Property and equipment:
U.S.	$   797	$   621
Foreign	315	647
	$1,112	$1,268

F - 20

inTEST CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share data)

(16)  QUARTERLY CONSOLIDATED FINANCIAL DATA (Unaudited)

The following tables present certain unaudited consolidated quarterly financial information for each of the eight quarters ended December 31, 2015. 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 and ATE markets. 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
	3/31/15	6/30/15	9/30/15	12/31/15	Total
Net revenues	$10,188	$11,559	$  9,203	$  7,939	$38,889
Gross margin	4,918	5,846	4,323	3,611	18,698
Earnings (loss) before income tax expense (benefit)	671	1,659	407	(154)	2,583
Income tax expense (benefit)	233	579	97	(187)	722
Net earnings	438	1,080	310	33	1,861
Net earnings per common share - basic	$0.04	$0.10	$0.03	$0.00	$0.18
Weighted average common shares outstanding - basic	10,465,414	10,471,888	10,473,928	10,481,612	10,473,210
Net earnings per common share - diluted	$0.04	$0.10	$0.03	$0.00	$0.18
Weighted average common shares outstanding - diluted	10,483,527	10,494,457	10,498,911	10,498,369	10,493,830
	Quarters Ended
	3/31/14	6/30/14	9/30/14	12/31/14	Total
Net revenues	$  8,797	$12,343	$10,794	$  9,862	$41,796
Gross margin	4,185	6,082	5,168	5,027	20,462
Earnings before income tax expense	411	2,054	1,268	1,176	4,909
Income tax expense	125	697	431	217	1,470
Net earnings	286	1,357	837	959	3,439
Net earnings per common share - basic	$0.03	$0.13	$0.08	$0.09	$0.33
Weighted average common shares outstanding - basic	10,393,956	10,436,730	10,440,803	10,454,716	10,431,743
Net earnings per common share - diluted	$0.03	$0.13	$0.08	$0.09	$0.33
Weighted average common shares outstanding - diluted	10,448,911	10,456,183	10,477,814	10,480,867	10,466,064

F - 21

inTEST CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share data)

(17)  SUBSEQUENT EVENTS

Restructuring Charges

In recent years, our Mechanical Products segment has experienced significant operating losses. We have undertaken actions at various times over the last few years to address these losses. On January 4, 2016, in conjunction with the formation of the inTEST EMS Products Division, we implemented a workforce reduction which resulted in our recording a restructuring charge of $99 in the first quarter of 2016.

Stock-Based Compensation Awards

On January 22, 2016, we issued 63,900 shares of restricted stock to certain executive officers, directors and key employees. Based on a grant date fair value of $4.37 per share, we will record total compensation expense of $279 related to these shares. Of the total shares issued, 22,500 will vest 100% upon the re-election of three of our independent directors at our annual meeting which is expected to take place in June 2016. The total compensation expense related to these shares is $98 and it will all be recorded in 2016 upon the re-election of the directors. The remaining compensation expense of $181 relates to shares which will vest over a four year period and will be recorded on a straight-line basis over the vesting period.

On January 22, 2016, we also issued 19,800 stock options to certain executive officers. The exercise price of the options is equal to the grant date fair value of our stock. The options have an exercise period of ten years from the date of grant and will vest on a straight-line basis over four years. We determined the fair value of these options using the Black-Scholes option pricing model. Based on a fair value of $1.43 per share, we will record total compensation expense of $28 on a straight-line basis over the vesting period.

Stock Repurchase Plan

As discussed in Note 13, in October 2015 our Board of Directors approved the 2015 Stock Repurchase Plan which commenced in December 2015. Through February 29, 2016, we had repurchased a total of 126,356 shares at a cost of $512 which included fees paid to our broker of $3.

F - 22

inTEST CORPORATION
SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS
(in thousands)

	Balance at Beginning of Period	Expense (Recovery)	Deductions	Balance at End of Period
Year Ended December 31, 2015
Allowance for doubtful accounts	146	-	-	146
Warranty reserve	118	67	(91)	94
Year Ended December 31, 2014
Allowance for doubtful accounts	147	-	(1)	146
Warranty reserve	123	96	(101)	118

F -23

EX-10.16

EXHIBIT 10.16

COMPENSATORY ARRANGEMENTS OF EXECUTIVE OFFICERS AND DIRECTORS

On January 22, 2016, the Compensation Committee (the "Committee") of the Board of Directors (the "Board") of inTEST Corporation (the "Company") recommended and the Board unanimously approved (i) a compensation plan for our executive officers Messrs. Matthiessen, Regan and Pelrin, and (ii) grants of restricted stock to our independent directors.  The details of this compensation plan and these restricted stock grants were previously filed on our Current Report on Form 8-K filed on January 28, 2016, and are incorporated herein by reference. The annual salary of Alyn Holt, our Executive Chairman, remains at $180,180.

In addition, each of our executive officers receives our standard benefits package. Messrs. Matthiessen, Regan, and Pelrin are also parties to Change of Control Agreements with us that provide for the payment of certain benefits upon the executive's termination of employment following a change of control, as defined therein.

Directors who are not also our officers (each a "non-employee director") currently receive an annual retainer of $25,000 (Steven J. Abrams, Esq., Joseph W. Dews IV and William Kraut). Non-employee members of the Executive Committee are paid an additional annual retainer of $15,000 (Mssrs. Abrams and Dews) and the Lead Independent Director is paid an additional annual retainer of $10,000 (Mr. Kraut). The chairmen of the committees of the Board are paid an additional annual fee as follows: the Chairman of the Audit Committee is paid an additional annual fee of $20,000 (Mr. Kraut); the Chairman of the Compensation Committee is paid an additional annual fee of $10,000 (Mr. Dews); and the Chairman of the Nominating and Corporate Governance Committee is paid an additional annual fee of $10,000 (Mr. Abrams).

EX-21

EXHIBIT 21

Subsidiaries of the Registrant

Name of Subsidiaries		Jurisdiction of Incorporation
inTEST Silicon Valley Corporation		Delaware
Temptronic Corporation (a)		Delaware
inTEST PTE, Ltd.		Singapore
inTEST Thermal Solutions GmbH		Germany
(a)	Doing business as inTEST Thermal Solutions Corp.

EX-23

EXHIBIT 23

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in Registration Statements (No. 333-145176 and No. 333-197858) on Form S-8 and Registration Statement (No. 333-195834) on Form S-3 of inTEST Corporation of our report dated March 29, 2016, relating to our audits of the consolidated financial statements and the financial statement schedule, which appear in this Annual Report on Form 10-K of inTEST Corporation for the year ended December 31, 2015. 




/s/ RSM US LLP


Blue Bell, Pennsylvania
March 29, 2016

EX-31.1

EXHIBIT 31.1

CERTIFICATION

          I, Robert E. Matthiessen, certify that:

          1.    I have reviewed this annual report on Form 10-K of inTEST Corporation;

          2.    Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

          3.    Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

          4.    The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

        (a)  Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

        (b)  Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

        (c)  Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

        (d)  Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

          5.    The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

        (a)  All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

        (b)  Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: March 29, 2016

/s/ Robert E. Matthiessen
Robert E. Matthiessen
President and Chief Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATION

          I, Hugh T. Regan, Jr., certify that:

          1.    I have reviewed this annual report on Form 10-K of inTEST Corporation;

          2.    Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

          3.    Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

          4.    The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

        (a)  Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

        (b)  Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

        (c)  Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

        (d)  Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

          5.    The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

        (a)  All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

        (b)  Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: March 29, 2016

/s/ Hugh T. Regan, Jr.
Hugh T. Regan, Jr.
Secretary, Treasurer and Chief Financial Officer

EX-32.1

EXHIBIT 32.1

inTEST CORPORATION


CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of inTEST Corporation (the "Company") on Form 10-K for the year ended December 31, 2015 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Robert E. Matthiessen, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.




Date: March 29, 2016

/s/ Robert E. Matthiessen
Robert E. Matthiessen
President and Chief Executive Officer

EX-32.2

EXHIBIT 32.2

inTEST CORPORATION


CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of inTEST Corporation (the "Company") on Form 10-K for the year ended December 31, 2015 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Hugh T. Regan, Jr., Secretary, Treasurer and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.




Date: March 29, 2016

/s/ Hugh T. Regan, Jr.
Hugh T. Regan, Jr.
Secretary, Treasurer and Chief Financial Officer

XML

Document And Entity Information - USD ($)	12 Months Ended
	Dec. 31, 2015	Mar. 18, 2016	Jun. 30, 2015
Entity Registrant Name	INTEST CORP
Entity Central Index Key	0001036262
Trading Symbol	intt
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 (in shares)		10,495,222
Entity Public Float			$ 35,089,249
Document Type	10-K
Document Period End Date	Dec. 31, 2015
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	FY
Amendment Flag	false

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Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2015	Dec. 31, 2014
ASSETS
Cash and cash equivalents	$ 25,710	$ 23,126
Trade accounts receivable, net of allowance for doubtful accounts of $146 and $146, respectively	4,395	5,034
Inventories	3,520	3,769
Deferred tax assets	559	529
Prepaid expenses and other current assets	639	473
Total current assets	34,823	32,931
Property and equipment:
Machinery and equipment	4,377	4,322
Leasehold improvements	603	593
Gross property and equipment	4,980	4,915
Less: accumulated depreciation	(3,868)	(3,647)
Net property and equipment	1,112	1,268
Deferred tax assets	686	884
Goodwill	1,706	1,706
Intangible assets, net	1,104	1,393
Restricted certificates of deposit	350	350
Other assets	203	206
Total assets	39,984	38,738
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable	909	1,234
Accrued wages and benefits	1,466	1,528
Accrued rent	657	615
Accrued professional fees	363	390
Accrued sales commissions	297	328
Other current liabilities	367	275
Total current liabilities	$ 4,059	$ 4,370
Commitments and Contingencies (Notes 9 and 11)
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; 10,549,423 and 10,595,755 shares issued, respectively	$ 105	$ 106
Addtional paid-in capital	26,286	26,321
Retained earnings	9,013	7,152
Accumulated other comprehensive earnings	725	993
Treasury stock, at cost; 33,077 and 33,077 shares, respectively	(204)	(204)
Total stockholders' equity	35,925	34,368
Total liabilities and stockholders' equity	$ 39,984	$ 38,738

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Consolidated Balance Sheets (Parentheticals) - USD ($) $ in Thousands	Dec. 31, 2015	Dec. 31, 2014
Allowance for doubtful accounts, respectively	$ 146	$ 146
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)	10,549,423	10,595,755
Treasury stock, at cost, shares, respectively (in shares)	33,077	33,077

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Consolidated Statements of Operations - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014
Net revenues	$ 38,889	$ 41,796
Cost of revenues	20,191	21,334
Gross margin	18,698	20,462
Operating expenses:
Selling expense	5,797	5,735
Engineering and product development expense	3,935	3,580
General and administrative expense	6,404	6,231
Total operating expenses	16,136	15,546
Operating income	2,562	4,916
Other income (expense)	21	(7)
Earnings before income tax expense	2,583	4,909
Income tax expense	722	1,470
Net earnings	$ 1,861	$ 3,439
Net earnings per common share:
- Basic (in dollars per share)	$ 0.18	$ 0.33
- Diluted (in dollars per share)	$ 0.18	$ 0.33
Weighted average common shares outstanding:
- Basic (in shares)	10,473,210	10,431,743
- Diluted (in shares)	10,493,830	10,466,064

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Consolidated Statements of Comprehensive Earnings - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014
Net earnings	$ 1,861	$ 3,439
Foreign currency translation adjustments	(268)	(354)
Comprehensive earnings	$ 1,593	$ 3,085

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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, 2013	10,590,755
Balance at Dec. 31, 2013	$ 106	$ 26,187	$ 3,713	$ 1,347	$ (204)	$ 31,149
Net earnings			3,439			3,439
Foreign currency translation adjustments				(354)		(354)
Amortization of deferred compensation related to restricted stock		134				$ 134
Forfeiture of unvested shares of restricted stock (in shares)	(5,000)
Issuance of unvested shares of restricted stock (in shares)	10,000
Balance (in shares) at Dec. 31, 2014	10,595,755					10,595,755
Balance at Dec. 31, 2014	$ 106	26,321	7,152	993	(204)	$ 34,368
Net earnings			1,861			1,861
Foreign currency translation adjustments				(268)		(268)
Amortization of deferred compensation related to restricted stock		119				$ 119
Forfeiture of unvested shares of restricted stock (in shares)	(5,000)
Balance (in shares) at Dec. 31, 2015	10,549,423					10,549,423
Balance at Dec. 31, 2015	$ 105	26,286	$ 9,013	$ 725	$ (204)	$ 35,925
Repurchase and retirement of common stock (in shares)	(41,332)					(41,332)
Repurchase and retirement of common stock	$ (1)	$ (154)				$ (155)

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Consolidated Statements of Cash Flows - USD ($)	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014
CASH FLOWS FROM OPERATING ACTIVITIES
Net earnings	$ 1,861,000	$ 3,439,000
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization	754,000	879,000
Provision for excess and obsolete inventory	342,000	344,000
Foreign exchange loss	33,000	44,000
Amortization of deferred compensation related to restricted stock	119,000	134,000
Loss on sale of property and equipment	15,000	44,000
Proceeds from sale of demonstration equipment, net of gain	214,000	161,000
Deferred income tax expense	168,000	318,000
Changes in assets and liabilities:
Trade accounts receivable	570,000	610,000
Inventories	(113,000)	(893,000)
Prepaid expenses and other current assets	$ (174,000)	(113,000)
Restricted certificates of deposit		100,000
Other assets	$ (15,000)	(17,000)
Accounts payable	(324,000)	172,000
Accrued wages and benefits	(36,000)	(75,000)
Accrued rent	42,000	38,000
Accrued professional fees	(25,000)	25,000
Accrued sales commissions	(31,000)	23,000
Other current liabilities	98,000	(104,000)
Net cash provided by operating activities	3,498,000	5,129,000
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment	$ (599,000)	(831,000)
Proceeds from sale of property and equipment		8,000
Net cash used in investing activities	$ (599,000)	$ (823,000)
CASH FLOWS FROM FINANCING ACTIVITIES
Repurchases of common stock	(155,000)
Net cash used in financing activities	(155,000)
Effects of exchange rates on cash	(160,000)	$ (198,000)
Net cash provided by all activities	2,584,000	4,108,000
Cash and cash equivalents at beginning of period	23,126,000	19,018,000
Cash and cash equivalents at end of period	25,710,000	23,126,000
Cash payments for:
Domestic and foreign income taxes	$ 792,000	1,213,000
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
Issuance of unvested shares of restricted stock		41,000
Forfeiture of unvested shares of restricted stock	$ (20,000)	$ (20,000)

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Note 1 - Nature of Operations

12 Months Ended

Dec. 31, 2015

Notes to Financial Statements

Nature of Operations [Text Block]

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NATURE OF OPERATIONS

We are an independent designer, manufacturer and marketer of thermal, mechanical 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, we sell our thermal products in markets outside the ATE market, such as the automotive, consumer electronics, defense/aerospace, energy, industrial and telecommunications markets.

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: Thermal Products, Mechanical 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.

The semiconductor 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 semiconductor 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.  In January 2016, we implemented a restructuring plan, as discussed further in Note 17, the goal of which is to return our Mechanical Products segment to profitability.  These efforts could cause us to incur substantial costs and may not be successful.  We also continue to implement an acquisition strategy that may cause us to incur substantial expense in reviewing and evaluating potential transactions.  We may or may not be successful in locating suitable businesses to acquire.  In addition, if we are able to complete an acquisition, we may not be able to successfully integrate the acquired business 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.

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Note 2 - Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2015

Notes to Financial Statements

Significant Accounting Policies [Text Block]

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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 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 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. There was no bad debt expense recorded in either of the years ended December 31, 2015 or 2014. Cash flows from accounts receivable are recorded in operating cash flows.

Fair Value of Financial Instruments

Our financial instruments, principally accounts receivable and accounts payable, are carried at cost which approximates fair value, due to the short maturities of the accounts.

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 $342 and $344 for the years ended December 31, 2015 and 2014, 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 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 $465 and $524 for the years ended December 31, 2015 and 2014, respectively.

Goodwill, Intangible and Long-Lived Assets

We account for goodwill and intangible assets in accordance with Accounting Standards Codification ("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 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. 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 we determine this is the case, we are required to perform a two-step goodwill impairment test to identify potential goodwill impairment and measure the amount of goodwill impairment loss to be recognized. The two-step test is discussed below. If we determine that it is more-likely-than-not that the fair value of the reporting unit is greater than its carrying amounts, the two-step goodwill impairment test is not required.

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 two-step goodwill impairment test. In the Step I test, the fair value of a reporting unit is computed and 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. The two-step 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 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 at least 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, no 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 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 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 plans in Note 12.

Subsequent Events

We have made an assessment of our operations and determined that there were no material subsequent events requiring adjustment to, or disclosure in, our consolidated financial statements for the year ended December 31, 2015 other than the events discussed in Note 17.

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 collection of the related receivable 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.

In addition, in our Thermal Products segment, we lease certain of our equipment to customers under non-cancellable operating leases. These leases generally have an initial term of six months. We recognize revenue for these leases on a straight-line basis over the term of the lease.

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.

Foreign Currency

For our foreign subsidiary 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, 2015 and 2014, foreign currency transaction losses were $33 and $44, 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 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,
	2015		2014
Weighted average common shares outstanding - basic		10,473,210		10,431,743
Potentially dilutive securities:
Unvested shares of restricted stock and employee stock options		20,620		34,321
Weighted average common shares outstanding - diluted		10,493,830		10,466,064
Average number of potentially dilutive securities excluded from calculation		-		4,753

Effect of Recently Issued Amendments to Authoritative Accounting Guidance

In February 2016, the Financial Accounting Standards Board (“FASB”) issued amendments to the current guidance on accounting for lease transactions which is presented in ASC Topic 842 (Leases). 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 12 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. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. We are currently evaluating the impact of the implementation of these amendments on our consolidated financial statements.

In January 2016, the

FASB issued amendments to the current guidance on the recognition and measurement of financial assets and financial liabilities which is presented in ASC Topic 825 (Financial Instruments). The intent of the updated guidance is to enhance the reporting model for financial instruments to provide users of financial statements with improved decision-making information. The updated guidance includes amendments to address aspects of recognition, measurement, presentation and disclosure. Changes included in the amendments are the requirement to measure equity investments at fair value, except those accounted for under the equity method of accounting or those that result in the consolidation of an investee, with changes in fair value recognized in net income; the requirement for a qualitative assessment to identify impairment of equity investments without readily determinable fair values; and the requirement for separate presentation of financial assets and financial liabilities by measurement category and form of financial asset on the balance sheet or in the accompanying notes to the financial statements. The amendments are effective for us as of January 1, 2018.

Early application is permitted. We do not expect the implementation of these amendments to have a material impact on our consolidated financial statements.

In November 2015, the FASB i

ssued amendments to update the current guidance on the balance sheet classification of deferred taxes which is presented in ASC Topic 740 (Income Taxes). The purpose of the amendments is to simplify the presentation of deferred tax assets. This guidance requires deferred tax assets and liabilities, along with related valuation allowances, to be classified as noncurrent on the balance sheet. As a result, each tax jurisdiction will now only have one net noncurrent deferred tax asset or liability. The new guidance does not change the existing requirement that prohibits offsetting deferred tax liabilities from one jurisdiction against deferred tax assets of another jurisdiction. The amendments are effective for us as of January 1, 2017. Early application is permitted. We currently plan to elect early application of this guidance effective January 1, 2016. We do not expect the implementation of these amendments to have a material impact on our consolidated financial statements.

In September 2015, the FASB issued amendments to update the current guidance on accounting for measurement period adjustments in a business combination which is presented in ASC Topic 805 (Business Combinations). This guidance requires an entity to recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined; record, in the same period's financial statements, the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date; and present separately on the face of the income statement or disclose in the notes the portion of the amount recorded in current-period earnings by line item that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date. The amendments are effective for us as of January 1, 2016, with early application permitted for financial statements that have not been issued. We do not expect the implementation of these amendments to have a material impact on our consolidated financial statements.

In July 2015, the FASB issued amendments to update the current guidance on the subsequent measurement of inventory, which is presented in ASC Topic 330 (Inventory). The purpose of the amendments is to simplify the subsequent measurement of inventory and reduce the number of potential outcomes. It applies to all inventory other than inventory measured using last-in, first-out or the retail inventory method. Current guidance requires an entity to measure inventory at the lower of cost or market. Market could be replacement cost, net realizable value, or net realizable value less a normal profit margin. The updated guidance amends this to require that an entity measure inventory within the scope of the updated guidance at the lower of cost and net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. The amendments are effective for us as of January 1, 2017. We do not expect the implementation of these amendments to have a material impact on our consolidated financial statements.

In May 2014, the FASB issued new guidance on the recognition of revenue from contracts with customers. This guidance is presented in ASC Topic 606 (Revenue from Contracts with Customers). This new guidance will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. Companies can use either the retrospective or cumulative effect transition method. In August 2015, the FASB deferred the effective date of this new guidance for one additional year. As a result, this new guidance is effective for us on January 1, 2018. Early application is only permitted as of the prior effective date, which in our case would be as of January 1, 2017. We have not yet selected a transition method and we are still evaluating the effect that this guidance will have on our consolidated financial statements and related disclosures.

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Note 3 - Goodwill and Intangible Assets

12 Months Ended

Dec. 31, 2015

Notes to Financial Statements

Goodwill and Intangible Assets Disclosure [Text Block]

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GOODWILL, INTANGIBLE AND LONG-LIVED ASSETS

Goodwill and intangible assets on our balance sheets are the result of our acquisitions of Sigma Systems Corp. ("Sigma") in October 2008 and Thermonics, Inc. ("Thermonics") in January 2012.

Goodwill

All of our goodwill is allocated to our Thermal Products segment. There were no changes in the amount of the carrying value of goodwill for the year ended December 31, 2015.

Intangible Assets

The following table provides further detail about our intangible assets as of December 31, 2015 and 2014:

	December 31, 2015
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Finite-lived intangible assets:
Customer relationships	$	1,480	$	1,166	$	314
Patented technology		590		386		204
Software		270		196		74
Trade name		140		138		2
Total finite-lived intangible assets		2,480		1,886		594
Indefinite-lived intangible assets:
Sigma trademark		510		-		510
Total intangible assets	$	2,990	$	1,886	$	1,104

	December 31, 2014
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Finite-lived intangible assets:
Customer relationships	$	1,480	$	979	$	501
Patented technology		590		346		244
Software		270		169		101
Trade name		140		103		37
Total finite-lived intangible assets		2,480		1,597		883
Indefinite-lived intangible assets:
Sigma trademark		510		-		510
Total intangible assets	$	2,990	$	1,597	$	1,393

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 finite-lived assets have any residual value. The following table provides further information about the estimated useful lives of our finite-lived intangible assets as of December 31, 2015:

	Estimated Useful Life		Remaining Estimated Useful Life at Dec. 31, 2015
	- - - - (in months) - - - -
Finite-lived intangible assets resulting from the acquisition of Sigma:
Customer relationships		72		-
Software		120		33
Patented technology		60		-
Finite-lived intangible assets resulting from the acquisition of Thermonics:
Customer relationships		72		24.5
Trade name		48		.5
Patented technology		132		84.5

The following table sets forth changes in the amount of the carrying value of finite-lived intangible assets for the year ended December 31, 2015:

Balance - January 1, 2015	$	883
Amortization		(289	)
Balance - December 31, 2015	$	594

Total amortization expense for the years ended December 31, 2015 and 2014 was $289 and $355, respectively. The following table sets forth the estimated annual amortization expense for our finite-lived intangible assets for each of the next five years:

2016	$	229
2017		212
2018		65
2019		39
2020		30

Impairment of Goodwill and Indefinite Life Intangible Assets

During December 2015 and 2014, we assessed our goodwill and indefinite life intangible asset 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 rates used in 2015 and 2014 for the discounted cash flows were 20% and 17%, 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 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 2015 and 2014, we performed a Step I test to identify potential impairment, in which the fair value of the Thermal Products 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 84% or $12,019 at December 31, 2015 and by 68% or $15,971 at December 31, 2014.

During the indefinite life intangible asset impairment assessment in both 2015 and 2014, we compared the fair value of our intangible asset with its carrying amount. This assessment indicated no impairment existed as the fair value of the intangible assets exceeded their carrying values in both 2015 and 2014.

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

As previously noted, our long-lived assets consist of our finite-lived intangible assets and property and equipment. During both December 2015 and 2014, due to continued operating losses experienced in our Mechanical Products segment, we assessed the long-lived assets of this segment for impairment. Our assessments indicated that the property and equipment that is allocated to this segment was not impaired. During 2015 and 2014, we did not review our Thermal and Electrical Products segment's long lived assets for impairment as there were no events or changes in business circumstances that would indicate an impairment might exist.

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Note 4 - Major Customers

12 Months Ended

Dec. 31, 2015

Notes to Financial Statements

Concentration Risk Disclosure [Text Block]

(4)

  

MAJOR CUSTOMERS

During the years ended December 31, 2015 and 2014, Hakuto Co. Ltd., one of our distributors, accounted for 12% and 11% of our consolidated net revenues, respectively. These revenues were generated by our Thermal Products segment. During the year ended December 31, 2014, Texas Instruments Incorporated accounted for 13% of our consolidated net revenues. While all three of our operating segments sold products to this customer, these revenues were primarily generated by our Mechanical Products and Electrical Products segments. During the years ended December 31, 2015 and 2014, no other customer accounted for 10% or more of our consolidated net revenues.

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Note 5 - Inventories

12 Months Ended

Dec. 31, 2015

Notes to Financial Statements

Inventory Disclosure [Text Block]

(5)

  

INVENTORIES

Inventories held at December 31 were comprised of the following:

	2015		2014
Raw materials	$	2,535	$	2,505
Work in process		295		406
Inventory consigned to others		119		129
Finished goods		571		729
Total inventories	$	3,520	$	3,769

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Note 6 - Other Current Liabilities

12 Months Ended

Dec. 31, 2015

Notes to Financial Statements

Accounts Payable, Accrued Liabilities, and Other Liabilities Disclosure, Current [Text Block]

(6)

  

OTHER CURRENT LIABILITIES

Other current liabilities at December 31 were comprised of the following:

	2015		2014
Deferred revenue and customer deposits	$	173	$	70
Accrued warranty		94		118
Domestic and foreign income taxes payable		26		22
Other		74		65
Total other current liabilities	$	367	$	275

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Note 7 - Debt

12 Months Ended

Dec. 31, 2015

Notes to Financial Statements

Debt Disclosure [Text Block]

(7)

  

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 30 days prior to their expiration dates for successive terms of not less than one year until lease expiration. Our outstanding letters of credit at December 31, 2015 and 2014 consisted of the following:

		L/C	Lease	Letters of Credit Amount Outstanding
Facility	Original L/C Issue Date	Expiration Date	Expiration Date	Dec. 31 2015		Dec. 31, 2014
Mt. Laurel, NJ	3/29/2010	4/01/2016	4/30/2021	$	250	$	250
Mansfield, MA	10/27/2010	11/08/2016	8/31/2021		100		100
				$	350	$	350

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Note 8 - Equipment Leasing

12 Months Ended

Dec. 31, 2015

Notes to Financial Statements

Operating Leases of Lessor Disclosure [Text Block]

(8)

  

EQUIPMENT LEASING

In our Thermal Products segment, we lease certain of our equipment to customers under non-cancellable operating leases. These leases generally have an initial term of six months. We recognize revenue for these leases on a straight-line basis over the term of the lease.

The total cost of leased equipment at December 31, 2015 and 2014 was $338 and $692, respectively, and is included in Machinery and Equipment on our balance sheet. As of December 31, 2015 and 2014, accumulated depreciation for leased equipment was $124 and $167, respectively.

As of December 31, 2015, total minimum payments receivable under non-cancellable operating leases were $55. All of these payments will be received in 2016.

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Note 9 - Commitments and Contingencies

12 Months Ended

Dec. 31, 2015

Notes to Financial Statements

Commitments and Contingencies Disclosure [Text Block]

(9)

  

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 2021. Total rental expense for the years ended December 31, 2015 and 2014 was $1,351 and $1,307, 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 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, 2015 are as follows:

2016	$	1,149
2017		1,097
2018		1,014
2019		1,006
2020		998
Thereafter		508
Total	$	5,772

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Note 10 - Income Taxes

12 Months Ended

Dec. 31, 2015

Notes to Financial Statements

Income Tax Disclosure [Text Block]

(10)

  

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, 2015 and 2014, 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,
	2015		2014
Domestic	$	1,868	$	4,061
Foreign		715		848
Total	$	2,583	$	4,909

Income tax expense (benefit) was as follows:

	Years Ended December 31,
	2015			2014
Current
Domestic -- Federal	$	523		$	1,073
Domestic -- state		45			78
Foreign		(14	)		1
Total	$	554		$	1,152
Deferred
Domestic -- Federal	$	12		$	401
Domestic -- state		(9	)		256
Foreign		165			(339	)
Total		168			318
Income tax expense	$	722		$	1,470

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, 2015 and 2014: 

	December 31,
Deferred tax assets:	2015			2014
Depreciation of property and equipment	$	580		$	596
Intangibles		279			224
Net operating loss ("NOL") (state and foreign)		264			513
Inventories		186			184
Accrued vacation pay and stock-based compensation		151			126
Tax credit carryforwards (foreign, research and AMT)		-			92
Allowance for doubtful accounts		55			56
Acquisition costs		31			34
Accrued warranty		5			6
Other		13			21
Total		1,564			1,852
Valuation allowance		(15	)		(100	)
Deferred tax assets		1,549			1,752
Deferred tax liabilities:
Net intangible assets		(222	)		(232	)
Unremitted earnings of foreign subsidiaries		(82	)		(107	)
Deferred tax liabilities		(304	)		(339	)
Net deferred tax asset	$	1,245		$	1,413

The net change in the valuation allowance for the years ended December 31, 2015 and 2014 were decreases of $85 and $187, 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 2035.

An analysis of the effective tax rate for the years ended December 31, 2015 and 2014 and a reconciliation from the expected statutory rate of 34% is as follows:

	Years Ended December 31,
	2015			2014
Expected income tax provision at U.S. statutory rate	$	878		$	1,669
Increase (decrease) in tax from:
Current year tax credits (foreign and research)		(207	)		(179	)
Changes in valuation allowance		(85	)		(187	)
Domestic production activities deduction		(68	)		(130	)
Foreign income tax rate differences		(64	)		(63	)
Deemed dividend from foreign subsidiaries		151			208
NOL carryforwards utilized		99			93
Domestic tax expense, net of Federal benefit		33			52
Nondeductible expenses		15			7
Other		(30	)		-
Income tax expense	$	722		$	1,470

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, 2015 and 2014, 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, 2012 and thereafter are subject to examination by the relevant taxing authorities.

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Note 11 - Legal Proceedings

12 Months Ended

Dec. 31, 2015

Notes to Financial Statements

Legal Matters and Contingencies [Text Block]

(11)

  

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.

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Note 12 - Stock-based Compensation Plan

12 Months Ended

Dec. 31, 2015

Notes to Financial Statements

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

(12)

  

STOCK-BASED COMPENSATION PLAN

As of December 31, 2015, we have unvested restricted stock awards granted under the inTEST Corporation 2007 Stock Plan (the "2007 Stock Plan"). The 2007 Stock Plan was approved at our annual meeting of stockholders held on June 13, 2007. 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. As of December 31, 2015, 62,500 shares remain available to grant under the 2007 Stock Plan.

In addition, at our annual meeting on June 25, 2014, our stockholders approved the inTEST Corporation 2014 Stock Plan (the "2014 Stock Plan"). The 2014 Stock Plan 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. As of December 31, 2015, no stock awards have been granted under the 2014 Stock Plan.

Our unvested restricted stock awards outstanding are accounted for based on their grant date fair value. As of December 31, 2015, total compensation expense to be recognized in future periods was $187. All of this expense is related to unvested shares of restricted stock. The weighted average period over which this expense is expected to be recognized is 1.7 years.

Stock Options

We did not grant any stock options during 2015 or 2014. During the year ended December 31, 2015, there were no stock options outstanding. The following table summarizes the stock option activity for the year ended December 31, 2014:

	Number of Shares			Weighted Average Exercise Price
Options outstanding, January 1, 2014 (10,000 exercisable)		10,000		$	5.66
Granted		-			-
Exercised		-			-
Canceled		(10,000	)		5.66
Options outstanding, December 31, 2014		-			-

Restricted Stock Awards

We record compensation expense for restricted stock awards (unvested 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 2015 and 2014, related to unvested shares:

	Years Ended December 31,
	2015		2014
Cost of revenues	$	10	$	11
Selling expense		5		6
Engineering and product development expense		10		16
General and administrative expense		94		101
	$	119	$	134

There was no compensation expense capitalized in 2015 or 2014. The following table summarizes the activity related to unvested shares for the two years ended December 31, 2015:

	Number of Shares			Weighted Average Grant Date Fair Value
Unvested shares outstanding, January 1, 2014		180,000		$	3.02
Granted		10,000			4.14
Vested		(83,125	)		2.31
Forfeited		(5,000	)		3.97
Unvested shares outstanding, December 31, 2014		101,875			3.66
Granted		-			-
Vested		(33,125	)		3.65
Forfeited		(5,000	)		3.97
Unvested shares outstanding, December 31, 2015		63,750			3.64

The total fair value of the shares that vested during the years ended December 31, 2015 and 2014 was $138 and $351, respectively, as of the vesting dates of these shares.

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Note 13 - Stock Repurchase Plan

12 Months Ended

Dec. 31, 2015

Notes to Financial Statements

Stock Repurchase Plan [Text Block]

(13)

  

STOCK REPURCHASE PLAN

On October 27, 2015, our Board of Directors authorized the repurchase of up to $5,000 of our common stock from time to time on the open market, in compliance with Rule 10b-18 under the Securities Exchange Act of 1934, or in privately negotiated transactions pursuant to a newly authorized stock repurchase plan. Repurchases may also be made under a Rule 10b5-1 plan entered into with RW Baird & Co, which permits shares to be repurchased when we might otherwise be precluded from doing so under insider trading laws. The timing and amount of any shares repurchased under the 2015 Repurchase Plan will be determined by our management, based on our evaluation of market conditions and other factors. The 2015 Repurchase Plan does not obligate us to purchase any particular amount of common stock and may be suspended or discontinued at any time without prior notice. The 2015 Repurchase Plan will be funded using our operating cash flow or available cash.

As of December 31, 2015, we had repurchased 41,332 shares under this repurchase plan at a cost of $155, which included fees paid to our broker of $1. All of the repurchased shares were retired.

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Note 14 - Employee Benefit Plans

12 Months Ended

Dec. 31, 2015

Notes to Financial Statements

Pension and Other Postretirement Benefits Disclosure [Text Block]

(14)

  

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, Temptronic Corporation and inTEST Silicon Valley Corporation 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 ratably over four years. Matching contributions are discretionary. For the years ended December 31, 2015 and 2014, we recorded $329 and $317 of expense for matching contributions, respectively.

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Note 15 - Segment Information

12 Months Ended

Dec. 31, 2015

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

(15)

  

SEGMENT INFORMATION

We have three reportable segments, which are also our reporting units: Thermal Products, Mechanical Products and Electrical Products.

The Thermal Products segment includes the operations of Temptronic Corporation, Thermonics, Sigma, inTEST Thermal Solutions 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, Thermonics and Sigma product lines. In addition, this segment provides post warranty service and support.

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 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 markets outside of the ATE market, including the automotive, consumer electronics, defense/aerospace, energy, industrial and telecommunications markets. Intercompany pricing between segments is either a multiple of cost for component parts or list price for finished goods.

	Years Ended December 31,
	2015			2014
Net revenues from unaffiliated customers:
Thermal Products	$	24,084		$	23,446
Mechanical Products		7,539			11,245
Electrical Products		7,266			7,105
	$	38,889		$	41,796
Depreciation/amortization:
Thermal Products	$	581		$	720
Mechanical Products		79			87
Electrical Products		94			72
	$	754		$	879
Operating income (loss):
Thermal Products	$	4,517		$	4,740
Mechanical Products		(1,902	)		(18	)
Electrical Products		673			781
Corporate		(726	)		(587	)
	$	2,562		$	4,916
Earnings (loss) before income tax expense (benefit):
Thermal Products	$	4,479		$	4,699
Mechanical Products		(1,874	)		(5	)
Electrical Products		704			802
Corporate		(726	)		(587	)
	$	2,583		$	4,909
Income tax expense (benefit):
Thermal Products	$	1,252		$	1,407
Mechanical Products		(524	)		(2	)
Electrical Products		197			240
Corporate		(203	)		(175	)
	$	722		$	1,470

	Years Ended December 31,
	2015			2014
Net earnings (loss):
Thermal Products	$	3,227		$	3,292
Mechanical Products		(1,350	)		(3	)
Electrical Products		507			562
Corporate		(523	)		(412	)
	$	1,861		$	3,439
Capital expenditures:
Thermal Products	$	389		$	595
Mechanical Products		101			96
Electrical Products		109			140
	$	599		$	831

	December 31,
	2015		2014
Identifiable assets:
Thermal Products	$	16,983	$	26,211
Mechanical Products		19,733		7,801
Electrical Products		3,268		4,726
	$	39,984	$	38,738

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,
	2015		2014
Net revenues from unaffiliated customers:
U.S.	$	14,294	$	14,363
Foreign		24,595		27,433
	$	38,889	$	41,796

	December 31,
	2015		2014
Property and equipment:
U.S.	$	797	$	621
Foreign		315		647
	$	1,112	$	1,268

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Note 16 - Quarterly Consolidated Financial Data (Unaudited)

12 Months Ended

Dec. 31, 2015

Notes to Financial Statements

Quarterly Financial Information [Text Block]

(16)

  

QUARTERLY CONSOLIDATED FINANCIAL DATA (Unaudited)

The following tables present certain unaudited consolidated quarterly financial information for each of the eight quarters ended December 31, 2015. 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 and ATE markets. 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
	3/31/15		6/30/15		9/30/15		12/31/15			Total
Net revenues	$	10,188	$	11,559	$	9,203	$	7,939		$	38,889
Gross margin		4,918		5,846		4,323		3,611			18,698
Earnings (loss) before income tax expense (benefit)		671		1,659		407		(154	)		2,583
Income tax expense (benefit)		233		579		97		(187	)		722
Net earnings		438		1,080		310		33			1,861
Net earnings per common share - basic	$	0.04	$	0.10	$	0.03	$	0.00		$	0.18
Weighted average common shares outstanding - basic		10,465,414		10,471,888		10,473,928		10,481,612			10,473,210
Net earnings per common share - diluted	$	0.04	$	0.10	$	0.03	$	0.00		$	0.18
Weighted average common shares outstanding - diluted		10,483,527		10,494,457		10,498,911		10,498,369			10,493,830

	Quarters Ended
	3/31/14		6/30/14		9/30/14		12/31/14		Total
Net revenues	$	8,797	$	12,343	$	10,794	$	9,862	$	41,796
Gross margin		4,185		6,082		5,168		5,027		20,462
Earnings before income tax expense		411		2,054		1,268		1,176		4,909
Income tax expense		125		697		431		217		1,470
Net earnings		286		1,357		837		959		3,439
Net earnings per common share - basic	$	0.03	$	0.13	$	0.08	$	0.09	$	0.33
Weighted average common shares outstanding - basic		10,393,956		10,436,730		10,440,803		10,454,716		10,431,743
Net earnings per common share - diluted	$	0.03	$	0.13	$	0.08	$	0.09	$	0.33
Weighted average common shares outstanding - diluted		10,448,911		10,456,183		10,477,814		10,480,867		10,466,064

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Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2015

Accounting Policies [Abstract]

Basis Of Presentation And Use Of Estimates [Policy Text Block]

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 

and 

deferred 

tax 

assets 

and 

liabilities 

including 

related 

valuation 

allowances, 

are 

particularly 

impacted 

by 

estimates.

Reclassification, Policy [Policy Text Block]

Reclassification

Certain 

prior 

year 

amounts 

have 

been 

reclassified 

to 

be 

comparable 

with 

the 

current 

year's 

presentation.

Cash and Cash Equivalents, Policy [Policy Text Block]

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.

Receivables, Policy [Policy Text Block]

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. 

There 

was 

no 

bad 

debt 

expense 

recorded 

in 

either 

of 

the 

years 

ended 

December 

31, 

2015 

or 

2014. 

Cash 

flows 

from 

accounts 

receivable 

are 

recorded 

in 

operating 

cash 

flows.

Fair Value Measurement, Policy [Policy Text Block]

Fair Value of Financial Instruments

Our 

financial 

instruments, 

principally 

accounts 

receivable 

and 

accounts 

payable, 

are 

carried 

at 

cost 

which 

approximates 

fair 

value, 

due 

to 

the 

short 

maturities 

of 

the 

accounts.

Inventory, Policy [Policy Text Block]

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 

$342 

and 

$344 

for 

the 

years 

ended 

December 

31, 

2015 

and 

2014, 

respectively.

Property, Plant and Equipment, Policy [Policy Text Block]

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 

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 

$465 

and 

$524 

for 

the 

years 

ended 

December 

31, 

2015 

and 

2014, 

respectively.

Goodwill Intangible And Long Lived Assets [Policy Text Block]

Goodwill, Intangible and Long-Lived Assets

We 

account 

for 

goodwill 

and 

intangible 

assets 

in 

accordance 

with 

Accounting 

Standards 

Codification 

("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 

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. 

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 

we 

determine 

this 

is 

the 

case, 

we 

are 

required 

to 

perform 

a 

two 

step 

goodwill 

impairment 

test 

to 

identify 

potential 

goodwill 

impairment 

and 

measure 

the 

amount 

of 

goodwill 

impairment 

loss 

to 

be 

recognized. 

The 

two 

step 

test 

is 

discussed 

below. 

If 

we 

determine 

that 

it 

is 

more 

likely 

than 

not 

that 

the 

fair 

value 

of 

the 

reporting 

unit 

is 

greater 

than 

its 

carrying 

amounts, 

the 

two 

step 

goodwill 

impairment 

test 

is 

not 

required. 

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 

two 

step 

goodwill 

impairment 

test. 

In 

the 

Step 

I 

test, 

the 

fair 

value 

of 

a 

reporting 

unit 

is 

computed 

and 

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. 

The 

two 

step 

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 

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 

at 

least 

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, 

no 

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 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.

Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block]

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, which is then amortized to expense over the service periods. See further disclosures related to our stock-based compensation plans in Note 12.

Subsequent Events, Policy [Policy Text Block]

Subsequent Events

We have made an assessment of our operations and determined that there were no material subsequent events requiring adjustment to, or disclosure in, our consolidated financial statements for the year ended December 31, 2015 other than the events discussed in Note 17.

Revenue Recognition, Policy [Policy Text Block]

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 collection of the related receivable 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.

In addition, in our Thermal Products segment, we lease certain of our equipment to customers under non-cancellable operating leases. These leases generally have an initial term of six months. We recognize revenue for these leases on a straight-line basis over the term of the lease.

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.

Standard Product Warranty, Policy [Policy Text Block]

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.

Research and Development Expense, Policy [Policy Text Block]

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 Transactions and Translations Policy [Policy Text Block]

Foreign Currency

For our foreign subsidiary 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, 2015 and 2014, foreign currency transaction losses were $33 and $44, respectively.

Income Tax, Policy [Policy Text Block]

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.

Earnings Per Share, Policy [Policy Text Block]

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,
	2015		2014
Weighted average common shares outstanding - basic		10,473,210		10,431,743
Potentially dilutive securities:
Unvested shares of restricted stock and employee stock options		20,620		34,321
Weighted average common shares outstanding - diluted		10,493,830		10,466,064
Average number of potentially dilutive securities excluded from calculation		-		4,753

New Accounting Pronouncements, Policy [Policy Text Block]

Effect of Recently Issued Amendments to Authoritative Accounting Guidance

In February 2016, the Financial Accounting Standards Board (“FASB”) issued amendments to the current guidance on accounting for lease transactions which is presented in ASC Topic 842 (Leases). 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 12 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. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. We are currently evaluating the impact of the implementation of these amendments on our consolidated financial statements.

In January 2016, the

FASB issued amendments to the current guidance on the recognition and measurement of financial assets and financial liabilities which is presented in ASC Topic 825 (Financial Instruments). The intent of the updated guidance is to enhance the reporting model for financial instruments to provide users of financial statements with improved decision-making information. The updated guidance includes amendments to address aspects of recognition, measurement, presentation and disclosure. Changes included in the amendments are the requirement to measure equity investments at fair value, except those accounted for under the equity method of accounting or those that result in the consolidation of an investee, with changes in fair value recognized in net income; the requirement for a qualitative assessment to identify impairment of equity investments without readily determinable fair values; and the requirement for separate presentation of financial assets and financial liabilities by measurement category and form of financial asset on the balance sheet or in the accompanying notes to the financial statements. The amendments are effective for us as of January 1, 2018.

Early application is permitted. We do not expect the implementation of these amendments to have a material impact on our consolidated financial statements.

In November 2015, the FASB i

ssued amendments to update the current guidance on the balance sheet classification of deferred taxes which is presented in ASC Topic 740 (Income Taxes). The purpose of the amendments is to simplify the presentation of deferred tax assets. This guidance requires deferred tax assets and liabilities, along with related valuation allowances, to be classified as noncurrent on the balance sheet. As a result, each tax jurisdiction will now only have one net noncurrent deferred tax asset or liability. The new guidance does not change the existing requirement that prohibits offsetting deferred tax liabilities from one jurisdiction against deferred tax assets of another jurisdiction. The amendments are effective for us as of January 1, 2017. Early application is permitted. We currently plan to elect early application of this guidance effective January 1, 2016. We do not expect the implementation of these amendments to have a material impact on our consolidated financial statements.

In September 2015, the FASB issued amendments to update the current guidance on accounting for measurement period adjustments in a business combination which is presented in ASC Topic 805 (Business Combinations). This guidance requires an entity to recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined; record, in the same period's financial statements, the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date; and present separately on the face of the income statement or disclose in the notes the portion of the amount recorded in current-period earnings by line item that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date. The amendments are effective for us as of January 1, 2016, with early application permitted for financial statements that have not been issued. We do not expect the implementation of these amendments to have a material impact on our consolidated financial statements.

In July 2015, the FASB issued amendments to update the current guidance on the subsequent measurement of inventory, which is presented in ASC Topic 330 (Inventory). The purpose of the amendments is to simplify the subsequent measurement of inventory and reduce the number of potential outcomes. It applies to all inventory other than inventory measured using last-in, first-out or the retail inventory method. Current guidance requires an entity to measure inventory at the lower of cost or market. Market could be replacement cost, net realizable value, or net realizable value less a normal profit margin. The updated guidance amends this to require that an entity measure inventory within the scope of the updated guidance at the lower of cost and net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. The amendments are effective for us as of January 1, 2017. We do not expect the implementation of these amendments to have a material impact on our consolidated financial statements.

In May 2014, the FASB issued new guidance on the recognition of revenue from contracts with customers. This guidance is presented in ASC Topic 606 (Revenue from Contracts with Customers). This new guidance will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. Companies can use either the retrospective or cumulative effect transition method. In August 2015, the FASB deferred the effective date of this new guidance for one additional year. As a result, this new guidance is effective for us on January 1, 2018. Early application is only permitted as of the prior effective date, which in our case would be as of January 1, 2017. We have not yet selected a transition method and we are still evaluating the effect that this guidance will have on our consolidated financial statements and related disclosures.

XML

Note 2 - Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2015

Notes Tables

Schedule of Weighted Average Number of Shares [Table Text Block]

	Years Ended December 31,
	2015		2014
Weighted average common shares outstanding - basic		10,473,210		10,431,743
Potentially dilutive securities:
Unvested shares of restricted stock and employee stock options		20,620		34,321
Weighted average common shares outstanding - diluted		10,493,830		10,466,064
Average number of potentially dilutive securities excluded from calculation		-		4,753

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Note 3 - Goodwill and Intangible Assets (Tables)

12 Months Ended

Dec. 31, 2015

Notes Tables

Schedule Of Intangible Assets [Table Text Block]

	December 31, 2015
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Finite-lived intangible assets:
Customer relationships	$	1,480	$	1,166	$	314
Patented technology		590		386		204
Software		270		196		74
Trade name		140		138		2
Total finite-lived intangible assets		2,480		1,886		594
Indefinite-lived intangible assets:
Sigma trademark		510		-		510
Total intangible assets	$	2,990	$	1,886	$	1,104

	December 31, 2014
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Finite-lived intangible assets:
Customer relationships	$	1,480	$	979	$	501
Patented technology		590		346		244
Software		270		169		101
Trade name		140		103		37
Total finite-lived intangible assets		2,480		1,597		883
Indefinite-lived intangible assets:
Sigma trademark		510		-		510
Total intangible assets	$	2,990	$	1,597	$	1,393

Schedule of Finite-Lived Intangible Assets [Table Text Block]

	Estimated Useful Life		Remaining Estimated Useful Life at Dec. 31, 2015
	- - - - (in months) - - - -
Finite-lived intangible assets resulting from the acquisition of Sigma:
Customer relationships		72		-
Software		120		33
Patented technology		60		-
Finite-lived intangible assets resulting from the acquisition of Thermonics:
Customer relationships		72		24.5
Trade name		48		.5
Patented technology		132		84.5

Schedule of Carrying Value of Finite-lived Intangible Assets [Table Text Block]

Balance - January 1, 2015	$	883
Amortization		(289	)
Balance - December 31, 2015	$	594

Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block]

2016	$	229
2017		212
2018		65
2019		39
2020		30

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Note 5 - Inventories (Tables)

12 Months Ended

Dec. 31, 2015

Notes Tables

Schedule of Inventory, Current [Table Text Block]

	2015		2014
Raw materials	$	2,535	$	2,505
Work in process		295		406
Inventory consigned to others		119		129
Finished goods		571		729
Total inventories	$	3,520	$	3,769

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Note 6 - Other Current Liabilities (Tables)

12 Months Ended

Dec. 31, 2015

Notes Tables

Current Liabilities [Table Text Block]

	2015		2014
Deferred revenue and customer deposits	$	173	$	70
Accrued warranty		94		118
Domestic and foreign income taxes payable		26		22
Other		74		65
Total other current liabilities	$	367	$	275

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Note 7 - Debt (Tables)

12 Months Ended

Dec. 31, 2015

Notes Tables

Schedule Of Outstanding Letters Of Credit [Table Text Block]

		L/C	Lease	Letters of Credit Amount Outstanding
Facility	Original L/C Issue Date	Expiration Date	Expiration Date	Dec. 31 2015		Dec. 31, 2014
Mt. Laurel, NJ	3/29/2010	4/01/2016	4/30/2021	$	250	$	250
Mansfield, MA	10/27/2010	11/08/2016	8/31/2021		100		100
				$	350	$	350

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Note 9 - Commitments and Contingencies (Tables)

12 Months Ended

Dec. 31, 2015

Notes Tables

Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block]

2016	$	1,149
2017		1,097
2018		1,014
2019		1,006
2020		998
Thereafter		508
Total	$	5,772

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Note 10 - Income Taxes (Tables)

12 Months Ended

Dec. 31, 2015

Notes Tables

Schedule of Income before Income Tax, Domestic and Foreign [Table Text Block]

	Years Ended December 31,
	2015		2014
Domestic	$	1,868	$	4,061
Foreign		715		848
Total	$	2,583	$	4,909

Schedule of Components of Income Tax Expense (Benefit) [Table Text Block]

	Years Ended December 31,
	2015			2014
Current
Domestic -- Federal	$	523		$	1,073
Domestic -- state		45			78
Foreign		(14	)		1
Total	$	554		$	1,152
Deferred
Domestic -- Federal	$	12		$	401
Domestic -- state		(9	)		256
Foreign		165			(339	)
Total		168			318
Income tax expense	$	722		$	1,470

Schedule of Deferred Tax Assets and Liabilities [Table Text Block]

	December 31,
Deferred tax assets:	2015			2014
Depreciation of property and equipment	$	580		$	596
Intangibles		279			224
Net operating loss ("NOL") (state and foreign)		264			513
Inventories		186			184
Accrued vacation pay and stock-based compensation		151			126
Tax credit carryforwards (foreign, research and AMT)		-			92
Allowance for doubtful accounts		55			56
Acquisition costs		31			34
Accrued warranty		5			6
Other		13			21
Total		1,564			1,852
Valuation allowance		(15	)		(100	)
Deferred tax assets		1,549			1,752
Deferred tax liabilities:
Net intangible assets		(222	)		(232	)
Unremitted earnings of foreign subsidiaries		(82	)		(107	)
Deferred tax liabilities		(304	)		(339	)
Net deferred tax asset	$	1,245		$	1,413

Schedule of Effective Income Tax Rate Reconciliation [Table Text Block]

	Years Ended December 31,
	2015			2014
Expected income tax provision at U.S. statutory rate	$	878		$	1,669
Increase (decrease) in tax from:
Current year tax credits (foreign and research)		(207	)		(179	)
Changes in valuation allowance		(85	)		(187	)
Domestic production activities deduction		(68	)		(130	)
Foreign income tax rate differences		(64	)		(63	)
Deemed dividend from foreign subsidiaries		151			208
NOL carryforwards utilized		99			93
Domestic tax expense, net of Federal benefit		33			52
Nondeductible expenses		15			7
Other		(30	)		-
Income tax expense	$	722		$	1,470

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Note 12 - Stock-based Compensation Plan (Tables)

12 Months Ended

Dec. 31, 2015

Notes Tables

Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block]

	Number of Shares			Weighted Average Exercise Price
Options outstanding, January 1, 2014 (10,000 exercisable)		10,000		$	5.66
Granted		-			-
Exercised		-			-
Canceled		(10,000	)		5.66
Options outstanding, December 31, 2014		-			-

Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Table Text Block]

	Years Ended December 31,
	2015		2014
Cost of revenues	$	10	$	11
Selling expense		5		6
Engineering and product development expense		10		16
General and administrative expense		94		101
	$	119	$	134

Schedule of Nonvested Share Activity [Table Text Block]

	Number of Shares			Weighted Average Grant Date Fair Value
Unvested shares outstanding, January 1, 2014		180,000		$	3.02
Granted		10,000			4.14
Vested		(83,125	)		2.31
Forfeited		(5,000	)		3.97
Unvested shares outstanding, December 31, 2014		101,875			3.66
Granted		-			-
Vested		(33,125	)		3.65
Forfeited		(5,000	)		3.97
Unvested shares outstanding, December 31, 2015		63,750			3.64

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Note 15 - Segment Information (Tables)

12 Months Ended

Dec. 31, 2015

Asset [Member]

Notes Tables

Schedule of Segment Reporting Information, by Segment [Table Text Block]

	December 31,
	2015		2014
Identifiable assets:
Thermal Products	$	16,983	$	26,211
Mechanical Products		19,733		7,801
Electrical Products		3,268		4,726
	$	39,984	$	38,738

Schedule of Segment Reporting Information, by Segment [Table Text Block]

	Years Ended December 31,
	2015			2014
Net revenues from unaffiliated customers:
Thermal Products	$	24,084		$	23,446
Mechanical Products		7,539			11,245
Electrical Products		7,266			7,105
	$	38,889		$	41,796
Depreciation/amortization:
Thermal Products	$	581		$	720
Mechanical Products		79			87
Electrical Products		94			72
	$	754		$	879
Operating income (loss):
Thermal Products	$	4,517		$	4,740
Mechanical Products		(1,902	)		(18	)
Electrical Products		673			781
Corporate		(726	)		(587	)
	$	2,562		$	4,916
Earnings (loss) before income tax expense (benefit):
Thermal Products	$	4,479		$	4,699
Mechanical Products		(1,874	)		(5	)
Electrical Products		704			802
Corporate		(726	)		(587	)
	$	2,583		$	4,909
Income tax expense (benefit):
Thermal Products	$	1,252		$	1,407
Mechanical Products		(524	)		(2	)
Electrical Products		197			240
Corporate		(203	)		(175	)
	$	722		$	1,470

	Years Ended December 31,
	2015			2014
Net earnings (loss):
Thermal Products	$	3,227		$	3,292
Mechanical Products		(1,350	)		(3	)
Electrical Products		507			562
Corporate		(523	)		(412	)
	$	1,861		$	3,439
Capital expenditures:
Thermal Products	$	389		$	595
Mechanical Products		101			96
Electrical Products		109			140
	$	599		$	831

Revenue from External Customers by Geographic Areas [Table Text Block]

	Years Ended December 31,
	2015		2014
Net revenues from unaffiliated customers:
U.S.	$	14,294	$	14,363
Foreign		24,595		27,433
	$	38,889	$	41,796

Long-lived Assets by Geographic Areas [Table Text Block]

	December 31,
	2015		2014
Property and equipment:
U.S.	$	797	$	621
Foreign		315		647
	$	1,112	$	1,268

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Note 16 - Quarterly Consolidated Financial Data (Unaudited) (Tables)

12 Months Ended

Dec. 31, 2015

Notes Tables

Schedule of Quarterly Financial Information [Table Text Block]

	Quarters Ended
	3/31/15		6/30/15		9/30/15		12/31/15			Total
Net revenues	$	10,188	$	11,559	$	9,203	$	7,939		$	38,889
Gross margin		4,918		5,846		4,323		3,611			18,698
Earnings (loss) before income tax expense (benefit)		671		1,659		407		(154	)		2,583
Income tax expense (benefit)		233		579		97		(187	)		722
Net earnings		438		1,080		310		33			1,861
Net earnings per common share - basic	$	0.04	$	0.10	$	0.03	$	0.00		$	0.18
Weighted average common shares outstanding - basic		10,465,414		10,471,888		10,473,928		10,481,612			10,473,210
Net earnings per common share - diluted	$	0.04	$	0.10	$	0.03	$	0.00		$	0.18
Weighted average common shares outstanding - diluted		10,483,527		10,494,457		10,498,911		10,498,369			10,493,830

	Quarters Ended
	3/31/14		6/30/14		9/30/14		12/31/14		Total
Net revenues	$	8,797	$	12,343	$	10,794	$	9,862	$	41,796
Gross margin		4,185		6,082		5,168		5,027		20,462
Earnings before income tax expense		411		2,054		1,268		1,176		4,909
Income tax expense		125		697		431		217		1,470
Net earnings		286		1,357		837		959		3,439
Net earnings per common share - basic	$	0.03	$	0.13	$	0.08	$	0.09	$	0.33
Weighted average common shares outstanding - basic		10,393,956		10,436,730		10,440,803		10,454,716		10,431,743
Net earnings per common share - diluted	$	0.03	$	0.13	$	0.08	$	0.09	$	0.33
Weighted average common shares outstanding - diluted		10,448,911		10,456,183		10,477,814		10,480,867		10,466,064

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Note 1 - Nature of Operations (Details Textual)	12 Months Ended
	Dec. 31, 2015
Number of Reportable Segments	3

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Note 2 - Summary of Significant Accounting Policies (Details Textual) - USD ($)	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014
Minimum [Member]
Property, Plant and Equipment, Useful Life	1 year
Maximum [Member]
Property, Plant and Equipment, Useful Life	10 years
Thermal Products and Mechanical Products [Member]
Equipment Leased To Customers Initial Term	180 days
Provision for Doubtful Accounts	$ 0	$ 0
Inventory Write-down	342,000	344,000
Depreciation	465,000	524,000
Foreign Currency Transaction Gain (Loss), before Tax	$ (33,000)	$ (44,000)

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Note 2 - Summary of Significant Accounting Policies - Weighted Average Common Shares (Details) - shares	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014
Weighted average common shares outstanding - basic (in shares)	10,473,210	10,431,743
Potentially dilutive securities:
Unvested shares of restricted stock and employee stock options (in shares)	20,620	34,321
Weighted average common shares outstanding - diluted (in shares)	10,493,830	10,466,064
Average number of potentially dilutive securities excluded from calculation (in shares)		4,753

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Note 3 - Goodwill and Intangible Assets (Details Textual) - USD ($)	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014
Goodwill, Period Increase (Decrease)	$ 0
Amortization of Intangible Assets	$ 289,000	$ 355,000
Fair Value Inputs, Discount Rate	20.00%	17.00%
Percent By Which Goodwill Exceeds Fair Value	84.00%	68.00%
Amount By Which Goodwill Exceeds Fair Value	$ 12,019,000	$ 15,971,000

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Note 3 - Goodwill and Intangible Assets - Intangible Assets (Details) - USD ($) $ in Thousands	Dec. 31, 2015	Dec. 31, 2014
Customer Relationships [Member]
Finite-lived intangible assets:
Finite-lived, Gross Carrying Amount	$ 1,480	$ 1,480
Finite-lived, Accumulated Amortization	1,166	979
Net Carrying Amount	314	501
Indefinite-lived intangible assets:
Finite-lived, Accumulated Amortization	1,166	979
Patented Technology [Member]
Finite-lived intangible assets:
Finite-lived, Gross Carrying Amount	590	590
Finite-lived, Accumulated Amortization	386	346
Net Carrying Amount	204	244
Indefinite-lived intangible assets:
Finite-lived, Accumulated Amortization	386	346
Computer Software, Intangible Asset [Member]
Finite-lived intangible assets:
Finite-lived, Gross Carrying Amount	270	270
Finite-lived, Accumulated Amortization	196	169
Net Carrying Amount	74	101
Indefinite-lived intangible assets:
Finite-lived, Accumulated Amortization	196	169
Trade Names [Member]
Finite-lived intangible assets:
Finite-lived, Gross Carrying Amount	140	140
Finite-lived, Accumulated Amortization	138	103
Net Carrying Amount	2	37
Indefinite-lived intangible assets:
Finite-lived, Accumulated Amortization	138	103
Trademarks [Member]
Indefinite-lived intangible assets:
Indefinite-lived, Gross Carrying Amount	510	510
Finite-lived, Gross Carrying Amount	2,480	2,480
Finite-lived, Accumulated Amortization	1,886	1,597
Net Carrying Amount	594	883
Intangible Assets, Gross Carrying Amount	2,990	2,990
Finite-lived, Accumulated Amortization	1,886	1,597
Net Carrying Amount	$ 1,104	$ 1,393

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Note 3 - Estimated Useful Lives of Finite Lived Intangible Assets (Details)	12 Months Ended
	Dec. 31, 2015
Customer Relationships [Member] | Sigma [Member]
Estimated Useful Life	6 years
Customer Relationships [Member] | Thermonics [Member]
Estimated Useful Life	6 years
Remaining Estimated Useful Life	2 years 15 days
Computer Software, Intangible Asset [Member] | Sigma [Member]
Estimated Useful Life	10 years
Remaining Estimated Useful Life	2 years 270 days
Patented Technology [Member] | Sigma [Member]
Estimated Useful Life	5 years
Patented Technology [Member] | Thermonics [Member]
Estimated Useful Life	11 years
Remaining Estimated Useful Life	7 years 15 days
Trade Names [Member] | Thermonics [Member]
Estimated Useful Life	4 years
Remaining Estimated Useful Life	15 days

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Note 3 - Changes in the Amount of the Carrying Value of Intangible Assets (Details) - USD ($)	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014
Balance - January 1, 2015	$ 883,000
Amortization	(289,000)	$ (355,000)
Balance - December 31, 2015	$ 594,000	$ 883,000

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Note 3 - Goodwill and Intangible Assets - Future Amortization Expense (Details) $ in Thousands	Dec. 31, 2015 USD ($)
2016	$ 229
2017	212
2018	65
2019	39
2020	$ 30

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Note 4 - Major Customers (Details Textual)	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014
Sales Revenue, Net [Member] | Customer Concentration Risk [Member] | Hakuto Co Ltd [Member]
Concentration Risk, Percentage	12.00%	11.00%
Sales Revenue, Net [Member] | Customer Concentration Risk [Member] | Texas Instruments Incorporated [Member]
Concentration Risk, Percentage		13.00%
Number of Operating Segments	3

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Note 5 - Inventories Held (Details) - USD ($) $ in Thousands	Dec. 31, 2015	Dec. 31, 2014
Raw materials	$ 2,535	$ 2,505
Work in process	295	406
Inventory consigned to others	119	129
Finished goods	571	729
Total inventories	$ 3,520	$ 3,769

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Note 6 - Other Current Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2015	Dec. 31, 2014
Deferred revenue and customer deposits	$ 173	$ 70
Accrued warranty	94	118
Domestic and foreign income taxes payable	26	22
Other	74	65
Total other current liabilities	$ 367	$ 275

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Note 7 - Debt - Outstanding Letters of Credit (Details) - Letter of Credit [Member] - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014
Mt Laurel [Member]
Line of Credit, Issue Date	Mar. 29, 2010
Line of Credit, ExpirationDate	Apr. 01, 2016
Lease Expiration Date	Apr. 30, 2021
Letters of Credit Amount Outstanding	$ 250	$ 250
Mansfield [Member]
Line of Credit, Issue Date	Oct. 27, 2010
Line of Credit, ExpirationDate	Nov. 08, 2016
Lease Expiration Date	Aug. 31, 2021
Letters of Credit Amount Outstanding	$ 100	100
Letters of Credit Amount Outstanding	$ 350	$ 350

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Note 8 - Equipment Leasing (Details Textual) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014
Thermal Products and Mechanical Products [Member]
Equipment Leased To Customers Initial Term	180 days
Equipment Leased to Other Party [Member]
Machinery and Equipment, Gross	$ 338	$ 692
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment	124	167
Operating Leases, Future Minimum Payments Receivable, Current	55
Machinery and Equipment, Gross	4,377	4,322
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment	$ 3,868	$ 3,647

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Note 9 - Commitments and Contingencies (Details Textual) - USD ($)	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014
Operating Leases, Rent Expense	$ 1,351	$ 1,307

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Note 9 - Minimum Rental Commitments Under Noncancellable Operating Leases (Details) $ in Thousands	Dec. 31, 2015 USD ($)
2016	$ 1,149
2017	1,097
2018	1,014
2019	1,006
2020	998
Thereafter	508
Total	$ 5,772

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Note 10 - Income Taxes (Details Textual) - USD ($)	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent	34.00%	34.00%
Deferred Tax Liability Not Recognized, Amount of Unrecognized Deferred Tax Liability, Undistributed Earnings of Foreign Subsidiaries	$ 0	$ 0
Valuation Allowance, Deferred Tax Asset, Increase (Decrease), Amount	85,000	187,000
Liability for Uncertain Tax Positions, Current	$ 0	$ 0

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Note 10 - Earnings Before Income Taxes (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014
Domestic	$ 1,868	$ 4,061
Foreign	715	848
Total	$ 2,583	$ 4,909

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Note 10 - Income Tax Expense (Benefit) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014
Current
Domestic -- Federal	$ 523	$ 1,073
Domestic -- state	45	78
Foreign	(14)	1
Total	554	1,152
Deferred
Domestic -- Federal	12	401
Domestic -- state	(9)	256
Foreign	165	(339)
Total	168	318
Income tax expense	$ 722	$ 1,470

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Note 10 - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2015	Dec. 31, 2014
Depreciation of property and equipment	$ 580	$ 596
Intangibles	279	224
Net operating loss ("NOL") (state and foreign)	264	513
Inventories	186	184
Accrued vacation pay and stock-based compensation	$ 151	126
Tax credit carryforwards (foreign, research and AMT)		92
Allowance for doubtful accounts	$ 55	56
Acquisition costs	31	34
Accrued warranty	5	6
Other	13	21
Total	1,564	1,852
Valuation allowance	(15)	(100)
Deferred tax assets	1,549	1,752
Net intangible assets	(222)	(232)
Unremitted earnings of foreign subsidiaries	(82)	(107)
Deferred tax liabilities	(304)	(339)
Net deferred tax asset	$ 1,245	$ 1,413

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Note 10 - Effective Tax Rate Analysis and Reconciliation of Expected Statutory Rate (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014
Expected income tax provision at U.S. statutory rate	$ 878	$ 1,669
Increase (decrease) in tax from:
Current year tax credits (foreign and research)	(207)	(179)
Changes in valuation allowance	(85)	(187)
Domestic production activities deduction	(68)	(130)
Foreign income tax rate differences	(64)	(63)
Deemed dividend from foreign subsidiaries	151	208
NOL carryforwards utilized	99	93
Domestic tax expense, net of Federal benefit	33	52
Nondeductible expenses	15	$ 7
Other	(30)
Income tax expense	$ 722	$ 1,470

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Note 12 - Stock-based Compensation Plan (Details Textual) - USD ($)	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014
Stock Plan 2014 [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant	0
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized	500,000
Stock Plan 2007 [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant	62,500
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized	500,000
Restricted Stock [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs, Capitalized Amount	$ 0	$ 0
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized	$ 187,000
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition	1 year 255 days
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period	4 years
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Fair Value	$ 138,000	$ 351,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross	0	0
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Period Increase (Decrease)	0

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Note 12 - Stock Option Activity (Details)	12 Months Ended
	Dec. 31, 2014 $ / shares shares
Options outstanding, January 1, 2014 (10,000 exercisable) (in shares) | shares	10,000
Options outstanding, January 1, 2014 (10,000 exercisable) (in dollars per share) | $ / shares	$ 5.66
Canceled (in shares) | shares	(10,000)
Canceled (in dollars per share) | $ / shares	$ 5.66
Options outstanding, December 31, 2014 (in shares) | shares
Options outstanding, December 31, 2014 (in dollars per share) | $ / shares

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Note 12 - Stock Option Activity (Details) (Parentheticals)	Dec. 31, 2014 shares
Options exercisable - number of shares (in shares)	10,000

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Note 12 - Stock-based Compensation - Allocation of Share-based Compensation Expense (Details) - Restricted Stock [Member] - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014
Cost of Sales [Member]
Allocation of Share-Based Compensation Expense	$ 10	$ 11
Selling and Marketing Expense [Member]
Allocation of Share-Based Compensation Expense	5	6
Research and Development Expense [Member]
Allocation of Share-Based Compensation Expense	10	16
General and Administrative Expense [Member]
Allocation of Share-Based Compensation Expense	94	101
Allocation of Share-Based Compensation Expense	$ 119	$ 134

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Note 12 - Stock-based Compensation - Nonvested Shares (Details) - Restricted Stock [Member] - $ / shares	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014
Unvested shares outstanding (in shares)	101,875	180,000
Unvested shares outstanding (in dollars per share)	$ 3.66	$ 3.02
Granted (in shares)		10,000
Granted (in dollars per share)		$ 4.14
Vested (in shares)	(33,125)	(83,125)
Vested (in dollars per share)	$ 3.65	$ 2.31
Forfeited (in shares)	(5,000)	(5,000)
Forfeited (in dollars per share)	$ 3.97	$ 3.97
Unvested shares outstanding (in shares)	63,750	101,875
Unvested shares outstanding (in dollars per share)	$ 3.64	$ 3.66

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Note 13 - Stock Repurchase Plan (Details Textual) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Oct. 27, 2015
Stock Repurchase Program, Authorized Amount		$ 5,000
Stock Repurchased and Retired During Period, Shares	41,332
Stock Repurchased and Retired During Period, Value	$ 155
Payments for Brokerage Fees	$ 1

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Note 14 - Employee Benefit Plans (Details Textual) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014
Defined Contribution Plan, Employer Matching Contribution, Percent of Employees' Gross Pay	10.00%
Defined Contribution Plan Maximum Annual Employer Matching Contribution Per Emplyee Amount	$ 5
Defined Contribution Plan Employer Matching Contribution Vesting Period	4 years
Defined Contribution Plan, Employer Discretionary Contribution Amount	$ 329	$ 317

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Note 15 - Segment Information (Details Textual)	12 Months Ended
	Dec. 31, 2015
Number of Reportable Segments	3

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Note 15 - Segment Information - Segment Information (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014
Thermal Products [Member]
Net revenues from unaffiliated customers	$ 24,084	$ 23,446
Depreciation/amorization	581	720
Operating Income (Loss)	4,517	4,740
Earnings (loss) before income tax expense (benefit)	4,479	4,699
Income tax expense (benefit)	1,252	1,407
Net earnings (loss)	3,227	3,292
Capital expenditures	389	595
Mechanical Products [Member]
Net revenues from unaffiliated customers	7,539	11,245
Depreciation/amorization	79	87
Operating Income (Loss)	(1,902)	(18)
Earnings (loss) before income tax expense (benefit)	(1,874)	(5)
Income tax expense (benefit)	(524)	(2)
Net earnings (loss)	(1,350)	(3)
Capital expenditures	101	96
Electrical Products [Member]
Net revenues from unaffiliated customers	7,266	7,105
Depreciation/amorization	94	72
Operating Income (Loss)	673	781
Earnings (loss) before income tax expense (benefit)	704	802
Income tax expense (benefit)	197	240
Net earnings (loss)	507	562
Capital expenditures	109	140
Corporate Segment [Member]
Operating Income (Loss)	(726)	(587)
Earnings (loss) before income tax expense (benefit)	(726)	(587)
Income tax expense (benefit)	(203)	(175)
Net earnings (loss)	(523)	(412)
Net revenues from unaffiliated customers	38,889	41,796
Depreciation/amorization	754	879
Operating Income (Loss)	2,562	4,916
Earnings (loss) before income tax expense (benefit)	2,583	4,909
Income tax expense (benefit)	722	1,470
Net earnings (loss)	1,861	3,439
Capital expenditures	$ 599	$ 831

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Note 15 - Segment Information - Identifiable Assets (Details) - USD ($) $ in Thousands	Dec. 31, 2015	Dec. 31, 2014
Thermal Products [Member]
ASSETS
Identifiable Assets	$ 16,983	$ 26,211
Mechanical Products [Member]
ASSETS
Identifiable Assets	19,733	7,801
Electrical Products [Member]
ASSETS
Identifiable Assets	3,268	4,726
Identifiable Assets	$ 39,984	$ 38,738

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Note 15 - Segment Information - Net Revenue from Unaffiliated Customers (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014
UNITED STATES
Net revenues from unaffiliated customers	$ 14,294	$ 14,363
Foreign [Member]
Net revenues from unaffiliated customers	24,595	27,433
Net revenues from unaffiliated customers	$ 38,889	$ 41,796

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Note 15 - Segment Information - Long-lived Assets by Geographical Area (Details) - USD ($) $ in Thousands	Dec. 31, 2015	Dec. 31, 2014
UNITED STATES
Property and equipment:
Property and Equipment	$ 797	$ 621
Foreign [Member]
Property and equipment:
Property and Equipment	315	647
Property and Equipment	$ 1,112	$ 1,268

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Note 16 - Quarterly Consolidated Financial Data (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2014	Sep. 30, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2015	Dec. 31, 2014
Net revenues	$ 7,939	$ 9,203	$ 11,559	$ 10,188	$ 9,862	$ 10,794	$ 12,343	$ 8,797	$ 38,889	$ 41,796
Gross margin	3,611	4,323	5,846	4,918	5,027	5,168	6,082	4,185	18,698	20,462
Earnings (loss) before income tax expense (benefit)	(154)	407	1,659	671	1,176	1,268	2,054	411	2,583	4,909
Income tax expense (benefit)	(187)	97	579	233	217	431	697	125	722	1,470
Net earnings	$ 33	$ 310	$ 1,080	$ 438	$ 959	$ 837	$ 1,357	$ 286	$ 1,861	$ 3,439
Net earnings per common share - basic (in dollars per share)	$ 0	$ 0.03	$ 0.10	$ 0.04	$ 0.09	$ 0.08	$ 0.13	$ 0.03	$ 0.18	$ 0.33
Weighted average common shares outstanding - basic (in shares)	10,481,612	10,473,928	10,471,888	10,465,414	10,454,716	10,440,803	10,436,730	10,393,956	10,473,210	10,431,743
Net earnings per common share - diluted (in dollars per share)	$ 0	$ 0.03	$ 0.10	$ 0.04	$ 0.09	$ 0.08	$ 0.13	$ 0.03	$ 0.18	$ 0.33
Weighted average common shares outstanding - diluted (in shares)	10,498,369	10,498,911	10,494,457	10,483,527	10,480,867	10,477,814	10,456,183	10,448,911	10,493,830	10,466,064

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Note 17 - Subsequent Event (Details Textual) - USD ($) $ / shares in Units, $ in Thousands			2 Months Ended	12 Months Ended
	Jan. 22, 2016	Jan. 04, 2016	Feb. 29, 2016	Dec. 31, 2015	Dec. 31, 2014
Subsequent Event [Member] | Certain Executive Officers, Directors, and Key Employees [Member] | Restricted Stock [Member] | Share-based Compensation Award, Tranche One [Member]
Stock Issued During Period, Shares, Restricted Stock Award, Gross	22,500
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Share-based Awards Other than Options	$ 98
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage	100.00%
Subsequent Event [Member] | Certain Executive Officers, Directors, and Key Employees [Member] | Restricted Stock [Member]
Stock Issued During Period, Shares, Restricted Stock Award, Gross	63,900
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value	$ 4.37
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Share-based Awards Other than Options	$ 279
Subsequent Event [Member] | Executive Officer [Member] | Employee Stock Option [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period	4 years
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period	10 years
Subsequent Event [Member] | Executive Officer [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value	$ 1.43
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross	19,800
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Stock Options	$ 28
Subsequent Event [Member] | Restricted Stock [Member] | Share-based Compensation Award, Tranche One [Member]
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Share-based Awards Other than Options	$ 181
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period	4 years
Subsequent Event [Member]
Restructuring Charges		$ 99
Stock Repurchased and Retired During Period, Shares			126,356
Stock Repurchased and Retired During Period, Value			$ 512
Payments for Brokerage Fees			$ 3
Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period				4 years
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross				0	0
Stock Repurchased and Retired During Period, Shares				41,332
Stock Repurchased and Retired During Period, Value				$ 155
Payments for Brokerage Fees				$ 1