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spk_0: that afternoon and welcome do our conference call for the quarter in fiscal year ended march thirty first twenty twenty one this is dan baker president ceo then the corporation as always i'm joined by kurt winders our chief financial officer this call is being webcast live in being recorded a replay will be avail able to our website and the dot com after my opening comments or present a financial review of the quarter and fiscal year i'll cover the business and new products and then we'll open the car questions we issued a press release with fourth quarter and fiscal year results and father annual report on form ten k in the past hour following the close a market we also filed with a ten k an extension to our supplier partnering agreement with abbott laboratories links to these documents are available through the as he sees website our website and twitter timeline comments we may make that relate to future plans events financial results are performance are forward looking statements that are subject to certain risks and uncertainties including among others such factors as risks and uncertainties related to future sales and revenue uncertainties related to future stock repurchases and dividend payments and risks related to the coven nineteen pandemic as well as the risk factors listed from time to time in our filings with the fcc including our just a ten k actual results could differ materially from the information provided and we undertake no obligation the update forward looking statements we may make we're pleased to report strong earnings for the fourth quarter in fiscal year despite the effects of the at nineteen pandemic for the quarter we reported earnings at sixty five cents per share versus sixty nine cents in a strong year ago quarter with the effects of covert nineteen the past year earnings decrease to two dollars forty two cents for the fiscal year compared to three dollars for the prior year now court will review the details of our financial results
spk_1: thanks dan
spk_2: total revenue for the quarter ended march thirty first two thousand and twenty one decreased five percent compared to last year due to a five percent decrease in product sales and seven percent decrease in contract or in the revenue
spk_1: the covert nineteen pandemic had a significant impact on revenue the past quarter
spk_2: we believe those effects began to subside although significant uncertainty remains expenses decreased eighteen percent for the fourth quarter from the prior year due primarily to a twenty three percent decrease in our indeed
spk_1: the decrease in our the expense was due to the completion of some new product developments
spk_2: interest income decreased to three hundred and thirty two thousand dollars for the most recent quarter from four hundred and twenty eight thousand dollars in the prior year quarter due to decreases in are available for sale securities and a decrease in the average interest rates on those securities that income for the quarter was three point one three million dollars or sixty five cents per diluted share compared to three point three seven million dollars or sixty nine cents last year gross margin was seventy eight percent for the quarter and net margin was fifty three percent we paid a one dollar per share dividend in the past quarter and today we announce that are bored declared another quarterly dividend of one dollar per se share payable may thirty first to shareholders of record as of may seventeenth for the fiscal year total revenue decreased sixteen percent
spk_1: due to a sixteen percent decrease and product sales and an eighteen percent decrease in contract are d the covert nineteen pandemic had a significant impact on revenue the past fiscal year especially in the first two quarters of the fiscal year
spk_2: net income for the year decreased nineteen percent to eleven point seven million dollars or two dogs and forty two cents per share compared to fourteen point five million dollars or three dollars per share last fiscal year
spk_1: we also had an unrealized gain of five hundred and eighty five thousand dollars on our marketable securities for the fiscal year
spk_2: resulting and comprehensive income of twelve point three million dollars we paid nineteen point three million dollars in dividends and repurchased ninety one thousand dollars of stock in the past year even with those generous returns to our shareholders or balance sheet remain strong with cash plus marketable securities of sixty five point one million dollars as of march thirty first now i'll turn the car back to dance to cover the business damn
spk_0: thanks for i'll cover highlights of the past quarter and fiscal twenty twenty one it's been a year since we first talked about the impact of covert nineteen i was in our may six twenty twenty conference call there's no light at the end of the tunnel at least for the direct effects i want to thank our suppliers distributors and our employees for keeping and be operating effectively the past year tough time show what were made up and we've seen the dedication and resourcefulness have any employees and the tenacity of our managers and leaders i'm pleased have been eligible for a vaccination as essential manufacturing workers since mid march and vaccines have been available to all minnesotans over sixteen since late march the great majority of our employees work on site through the pandemic despite the personal risk other highlights of the past quarter we're proud to supply products to some of the world's most demanding customers including abbott's pacesetters subsidiary abbott is a leading implantable medical device supplier last week we extended our supply partnering agreement with abbott until november to get us time to negotiate a long term a member we've extended are partnering agreements with abbott and st jude medical a number of times dating back to two thousand six and we're allowing more time because their new people involved since abbott's purchase of st jude in twenty seven team the latest amendment was filed as i mentioned with our ten k another validation of our products extraordinary ruggedness and reliability is i selection as a supplier for the europa clipper mission the one of jupiter's moons to explore the possibility of extraterrestrial life in the past quarter nasa completed it's critical design review for the spacecraft nasa pointed out that the spacecraft must be already enough to withstand the radiation and space yet sensitive enough to gather the science needed to investigate the rope as environment i pods qualified for this demanding mission which demonstrates their extraordinary properties we deliver approach for the europa mission and twenty nine team but continue to work with nasa on other missions and an average experience for other demanding applications nasa recently to find the launch vehicle path and is planning on october twenty twenty four launch the weather whether the jupiter in april twenty thirty it will take longer than the other previous scenarios but at least now they are definitive schedule targets turning the product development one of the areas where we have been continuously improving our sensors is noise performance low noise sensors can detect smaller magnetic field changes which means more accurate sensing or electronic for clinton something or electronic competence for example in the past quarter members of our they have said margie team published a peer reviewed paper in the journal of applied physics letters titled maggie the resistive sensor detects that he a comparative analysis detailing the noise performance about various types of sensors if your subscription do applied physics letters has lapsed you can access the article from the papers and presentation section of our website we introduced to groups of new products in the past quarter easy to dc converters and tunneling magneto resistors resistance sensors first we expanded our line of dc to dc converters with the addition of larger parts and combination converters with data couplers pc to dc converters transmit power rather than data we make the world's smallest isolated dc to dc converters at less than a quarter by an eighth of an inch in the past quarter we introduced larger isolated dc to dc converters there are still pretty small less than a half an inch square but the larger size allows us to provide best in class five thousand volts isolation which is remarkable for part that size higher isolation means better reliability in addition to the new standalone d c d c converters in the past quarter we introduced three models that combine five thousand bold isolation dc to dc converters with data couplers to simultaneously transfer data and power in less space and with fewer chips to dc cover introductions are designed for industrial automation and the industrial internet of things in addition to dc to dc converters in the past quarter we introduced high sensitivity tunneling magneto resistance or jamar magnetic switches these parts one on three to four balls which makes the new parts ideal for rechargeable devices such as over the counter hearing aids and smart audio devices there are links information on our new products on our website including demonstrations in the video section of our website there also links to information on a you tube channel twitter timeline and linked in posts in addition of the new products in the past quarter new and improved products in the past fiscal year and code included highfield magnetic sensors and switches for am i talent medical devices ultra precise tunneling maggie to resistance motion sensors for robotics and factory automation the world's smallest the cdc can voters to transmit power as well as day in industrial networks and cars new smart sensors for more this versatility and connectivity and improved couplers with best in class common mode trans he and immunity or cmt i for more power efficient control turning the sales and marketing a coven nineteen way beginning the past quarter in europe caused restrictions and the cancellation of most in person trade shows but despite the pandemic we have opportunities to promote our new products a blood test isn't important industry trade show it's gone digital and is going on this week it's borders the industry's largest of and dedicated to sensors connectivity and systems it's normally held in germany and were participating as a coexist better with thanks than sister formerly known as positron one of our european distributors the exhibition runs through tomorrow may sex we have several new products that the virtual booth and were planning webinars after the exhibition last week was a major industry research conference the i tripoli international magnetics conference or inner mag for short originally scheduled to be openly or france the conference was changed to virtual due to the pandemic five of our researchers authored a paper titled magnetic this cassidy and high precision magneto resistive field sensors at the conference overcoming magnetic this car city to improve accuracy and precision is an example of our leadership and sensor technology dr joe davies a senior physicist and program manager was also the sensor expert on a panel of experts at that conference although we're taking advantage of virtual that's we look forward to the return of in person exhibits sensors expo build the north america's largest event dedicated to sensors conductivity and the internet of things were scheduled for june and san jose it's been postponed the late september data covered nineteen restrictions in california but we still planned to exhibit and are folks attempt champ champing at the bit to get in front of customers again we last attended sensors expo two years ago and promoted or then new smart angle sensors with as my answer based robotics our phone playing do you know the way to san jose we've expanded are smart center line since the last expo but we planned the replies the popular demo there's a video of the twenty nineteen demo on our you tube channel to inherent challenges as a small company or reaching certain target markets like automotive and offering solutions requiring multiple components so we're working with anx them sister the european distributor i mentioned a minute ago to address the market for couplers and electric vehicle on board charging circuitry anx ancestors battery charger platform takes advantage of our couplers best in class isolation voltage and recently upgraded c m t i isolation voltage pretax delicate electronics and harsh environments like electric cars and the i see m t i allows the circuitry to switch faster which means higher efficiency less kilowatt hours per one hundred miles lower fuel costs and faster charging there was a video with more details on our youtube channel an and sisters channel that we also posted videos in the past quarter showing the high common mode trans in immunity and best in class isolation voltage of the cobbler's that are critical to this charging circuitry design now i'd like to open the car for questions am
spk_3: like
spk_4: one
spk_5: or one that
spk_6: one
spk_7: on
spk_8: i'm calling
spk_6: thanks i didn't dead glad to hear you guys are doing well
spk_0: a few questions for you
spk_2: great ended up to talk about them maybe book to bill and come forward looking statements you want to give about how businesses progress progressing for you and and maybe touch on the it's it's shortages and whether that creating in the opportunities for you to drop in some incompatible counterparts yeah absolutely correct do you want to cover the outlook and then i can talk a little bit about the global semiconductor shortage and are threats and opportunities or thanks for richer sure
spk_9: as i mentioned in my prepared remarks jeff the effects of the pandemic on us
spk_2: appear to be subsiding although they're still an impact and a good deal of uncertainty the worldwide semiconductor market is strong although there have been pockets of weakness and or the impact on the pandemic i'm an elective the medical devices appears to be recovering the industrial and factory automation markets are particularly strong
spk_7: based on the orders sir
spk_0: forecasts and what we've been hearing we currently expect a strong year over year growth that this quarter to quarter ending june thirtieth twenty two thousand and twenty one that's nice and you and then as far as the our global semiconductors shortage which is of course been in the news we have index they experienced significant materials shortages lead times have lengthened for many raw materials and and services ah but we typically maintain relatively large inventories as a hedge against this sort of thing and we see the global semiconductor shortages as both a threat an opportunity so the that the threat is is obvious and we've always carried ample inventories and word building inventories as
spk_5: as as we see it being a good opportunity to ah
spk_6: the address these shortages am as a part of l a bold our customers they sing shortages from our competitors so we have as as you probably know we have parts that can drop in directly to replace some of our competitors semiconductor a legacy type parts and were saying
spk_0: opportunities to to reach customers that we might not have been able to reach before so we we we see it does as an opportunity but of folks are also doing a very good job of addressing the frat the threats and working some of the long lead time items which presents some challenges that's great i saw were abbott reported i guess there's a recovery museum in neuromodulation businesses and and had some strength as exiting the quarter it is is the neuromodulation pieces is that relevant to you it it very well could be out we look at opportunities to stem the platforms that we have with leaders in things like the rhythm management because the platforms are often similar and those are fast growing markets with it with great opportunity these to treat ah new types of diseases or diseases that haven't been previously treated with neural stimulators so
spk_6: if you're you're right abbott reported an increase of four five point eight percent the organic increase in rhythm management sales so they said that
spk_10: it was driven by continued recovery
spk_5: from the colbert nineteen pandemic the growth and medical device sale so that's encouraging and then we see long term opportunities in neural stimulators which are a smaller but fast growing market and there treatments are being proposed for neurological disorders say the trick problems in the a psychiatric illnesses and pain management so it's a great opportunity for us and we have experience in that platform with those types of platforms and with adding the reliability that those types of an implantable device applications have great and now wanted to just fall on the and in in sister
spk_6: relationship and that the battery charging system do you think that the design cycles on on these subsystems may be a faster moving forward them for the entire partisan and damn you know just just wondering how are we should think about that and and then on i think you had mentioned last
spk_0: palmer when we spoke recently that that you had ah isolator that were on compatible with with both some gan and silicon carbide ah mosque that and obviously those market seem to be you know starting to really explode and to so wondering about any positioning there yeah great questions and there are other i actually related because the ah battery charging platform uses next generation mosque that and our devices as you correctly pointed out or unique way compatible with those types of ultra high speed moss spats so the advantage there is those types of mass that's actors switches to switch the power and the time d c and to ac and a can do that they can do that faster than conventional moss that but that creates hi transience large and high speed transience and so then the problem is that the isolator don't work and isolator is with those high cmt i specifications can withstand this ultra fast switching saw the path after one can switch these the less power loss is there are because while they're switching you're losing power and so a month when these mosque fat switch very very fast one as higher efficiency and that means as i mentioned in the prepared remarks that means more efficient battery charging and longer right
spk_11: range for the for the vehicle and better equivalent gas mileage so
spk_0: is so we see this is as important technology and it's being demonstrated in the eggs than sister platform with some of these next generation mosque that's as far as the design cycle this is a demonstration and so it's in the early stages but it's a working design and it's very impressive how efficient it is how quickly it switches and we're proud to be a part of it
spk_6: so yeah
spk_12: there is a design cycle but as you know there's a lot of interest in making
spk_13: charging electric vehicles as efficient as possible reducing the charge time so that so you don't have to you don't have to be a part that a are at a recharging station rest stop for a long period of time on a cross country trip and we we see this says as very important technology
spk_3: a great opportunity and we talked about the next generation opportunities that we have in the automotive particularly hybrid electric vehicle automotive industry and this is a great example
spk_10: great thank you thanks to the time i'll let somebody else yet ask questions
spk_6: thanks jeff again or one five and one
spk_0: now on one woman okay i've if no one else is going as i just wonder yeah it looks like there's a lot of zone activity or there's there's a lot a new company activities in hearing aids and here bulls that was all the time allotted design activity despite the fact that the the ft as and put out there rugs yeah
spk_14: you know you give us any indication of of you know what's going on with with your business there
spk_0: yeah i as you know next generation hearing aid so called the a hero balls audio devices i have a great opportunity for us there are estimated to become a ninety three billion dollar market by twenty twenty six so ah
spk_10: way i mentioned in the prepared remarks that we're we're far been developing sensors that work with the that are compatible with a rechargeable batteries used in ah in the some of these next generation hearing aids and consumer were balls rather than the disposable batteries that are generally used in traditional
spk_6: hearing aid so those disposable batteries are are typically in all the familiar one and a half old batteries but ah
spk_15: rechargeable batteries have a higher voltage so we have been targeting that space we have design wins in that space being the parables market and we'd like to see the ft eight
spk_0: wow regulations on possible sale of over the counter hearing aids but the elbows revolution is proceeding and were engaged with developers of had boy and then lastly i'm on the the puffs business i think he was it but i know it's a lumpy business and you are looking for some recovery they're does sound like defense orders are a bit lumpy these days with the continuing resolution new administration and particularly a foreign sales some issues about foreign sales worldwide thing maybe post play in even bigger role of the could you just talk about that that segment shirt so as you know that's not a huge revenues for us but it's important and it has been a choppy market but from a technology standpoint we've been working on contracts for paths and for
spk_16: anti tamper amram applications so those are two technologies that were leaders in and we see some great near term applications an anti tamper for defense applications and longer term these things have commerce
spk_0: will applications as well
spk_10: but we have contracts underway for anti tamper and amram so these are
spk_12: development programs third a generally funded and they allow us to a our technology they allow us to provide a high speed encryption and security for
spk_0: for valuable electronic system system sensitive data or electronics
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