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spk_0: they keep standing by at welcome to the and be corporations first quarter to does put up to fiscal year results at this time all participants are listen only mode after the speakers presentation there will be a question and answer session to ask a question during the session you'll need to press star one on your telephone as a reminder to these program may be recorded i would now like to introduce your hosts for today's program daniel they get president and ceo please go ahead sir
spk_1: good afternoon and welcome to our conference call for the quarter ended june thirtieth twenty twenty one with me as our chief financial officer kurt riders this call is being webcast live and being recorded a replay will be available through our website and the a dot com after my opening comments kurt will present financial review of the quarter and i'll cover the business and then we'll open the call the questions we issued a press release with first quarter results and filed are quarterly report on form tend to in the past hour following the close of market links to the press release and the tend to are available through the as he sees website our website and or twitter timeline comments we may make the relate to future plans of financial results or 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 dividend payments and future stock repurchases and risk for late into the covert nineteen pandemic as well as the risk factors listed from time to time and are filings with the se si including our annual report on for ten k for the year ended march thirty first twenty twenty one as updated and are just filed tend to actual results could differ materially from the information provided and we undertake know obligate recent update forward looking statements we may make we're pleased to report a strong recovery from there but pandemic impacted year ago quarter for the quarter we reported earnings of seventy four cents per share versus fifty cents in the year ago quarter driven by a sixty percent increase in product sales now car or cover the details of our financial results kirk
spk_2: thanks dan total revenue for the quarter ended june thirtieth two thousand twenty one increased fifty six percent to seven point one five million dollars compared to four point five nine million last year due to a sixty percent increase in product sales partially offset by a fourteen percent decrease in contract are in the revenue
spk_3: this was our highest revenue quarter since two thousand and eighteen
spk_2: the covert nineteen pandemic at a significant impact on revenue in the past year we believe those effects or subsiding although risks and uncertainties remain expenses increased three percent for the quarter from the prior year due to a thirty one percent increase in stl a partially offset by an eight percent decrease in our in d the increase and as she and i was due to increased employee compensation expense the decrease in our the expense was due to staffing changes in the completion of some new product development interest income decreased to two hundred ninety thousand dollars for the most recent quarter from three hundred and ninety nine thousand 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 net income for the quarter was three point five eight million dollars or seventy four cents per diluted share compared to two point four one million dollars or fifty cents last year gross margin decreased to seventy five percent versus eighty two percent for the prior year quarter due to revenue mix and that margin was a salad fifty percent
spk_3: with a the one dollar per share david and in the past quarter and today we announced that are board declared another quarterly dividend of one dollar per share payable august thirty first to shareholders of record as of august second
spk_2: now turn the call back down to cover the business them
spk_1: thanks card i'll cover business and marketing and we continue to manage the challenges and opportunities presented by global semiconductor shortages some it said shortages could last several more years raw material on packaging service lead times have increased and prices of many raw materials have increased we've addressed these threads by increasing inventory that all stay ages and increasing our production capacity to support converting that inventory to finished goods we've increased some prices were we've had to because of higher material and labor costs for other parts we've been able to keep our prices the same while improving our competitive position the shortages of created opportunities to provide products where we have drop in replacements for competitors had particularly couplers we've won some business because we are parts available and we hope they keep their business by demonstrating more reliable supplier with excellent product performance and quality or advanced technology team continues to work on new and improved tunneling magneto resistance or tmr sensors which have more signal and use less power than conventional sensors this is especially important for automotive current sensors which are a key element of our long term growth strategy or advanced technology team also worked on spintronics memory or amram under a customer sponsored are and d contract for custom parts amram as one of our court technologies we manufacture am rams for specialized applications such as anti tamper and these programs allows to build our technology capabilities turning the sales and marketing most in person industry trade shows were cancelled or were virtual in the past quarter but one of about distributors participated in the small in person exhibition in late june in northern italy we hope there will be more and person exhibitions censor plus test is an important industry try eight show it's normally held in germany but took place virtually in the past quarter it's billed as the industry largest of and dedicated to sensors conductivity and systems we participated as a code zeb there with eggs and sister one of our european distributors we had several new products at the virtual booth and webinars after the exhibition in of as quarter we presented a couple or couplers that a web and are on silicon carbide power control hosted by accident sister silicon carbide transistors are leading edge devices their ideal for power control because they're faster and and have less energy loss than older silicon transistors our couplers are ideal for transmitting signals to these transistors because they have best in class isolation and common mode trans and immunity isolation enhances reliability by protecting delicate electronics and harsh environments like electric cars and common mode trans the and immunity allows the circuitry to switch faster and therefore operate more efficiently a major industry research conference the i tripoli international magnetics conference or in er mag for short was held virtually in the past quarter originally scheduled to be held in all france the conference was held virtually due to the pandemic five of i researchers authored a paper titled magnetic this cassidy and i precision make the to resist the field sensors at the inner mag conference overcoming magnetic viscosity to improve accuracy and precision is an example of our leadership and sensor technology joe davies a senior physicist and program manager was also the sensor expert on a panel of experts although we're taking advantage of virtual of as we look forward to the return of in person exhibits this quarter sensors expo build north america's largest event dedicated to sensors conductivity and the internet of things has been postponed several times but is still scheduled for september in san jose we plan to exhibit and are folks check out champing at the bit to get in front of customers we last attended sensors expo two years ago and promoted our new smart angle sensors with a smart censor based robotic xylophone playing do you know the way to san jose we've expanded our smart center line since the last sensors expo but we plan to reprise the popular demo there's a video of the twenty nineteen robotic xylophone on our you tube channel our annual shareholders meeting will be held august fifth via telephone i have the know with sadness the passing of to members of the in the family the past quarter of both of whom some of you will remember from are in person annual meetings catherine harm and who coordinated our annual meetings and greeted shareholders as they arrive passed away unexpectedly and may she worked to hear more than twenty three years and handle the variety of accounting investor relations and human resource functions she's deeply missed we also lost former director robert a iris and may bob was on a board for twenty two years from ninety ninety two until he retired and twenty fourteen in addition to serving our board he was told that the company until two thousand and three he was a dedicated director with a big personality the first annual meeting agenda item a selection of directors gary maharaja's i'm standing for reelection gary joined our board and twenty four team when bob iris retired he's provided strong oversight oversight and valuable advice and seven years on our board we appreciate his service gary will be concentrating on his day job of ceo of sir maddox incorporated and we wish him continued success we are pleased to have been able to nominate the doctor james w brackets to replace carry on our board jim as an accomplished executive and highly experienced public company director he was ceo of life corbeil biomedical for more than twenty years is management technical medical device and public company experience and his medical education qualify him to serve as a director after voting for directors the second annual meeting agenda item is approval of officer compensation as detailed in our proxy we don't pay or overpay our officers officers have the same fringe benefits as all employees and there are no executive perks are golden parachutes the third annual meeting agenda item is ratification of our auditors boule a p l o p as auditors for this fiscal year the year ending march thirty first twenty twenty two the way audited i pass to fiscal years and we recommend their approval for our next on it a popular feature of are in person annual meetings was live hands on product demonstrations instead of that this year there's a playlist called twenty twenty one annual meeting demonstrations highlighting recent censor coupler and internet of things innovations the playlist as up now and our youtube channel and there's a link on our investor events pay age we look forward to returning to in person annual meetings next year
spk_0: now i like tell them a call for questions jonathan thirdly ladies and gentlemen if you have a question at this time please press star than one on your touchstone telephone if your question has been answered and you'd like to move result from the queue please press the pound key
spk_4: and we have a question from the line lineup japan see from cowan your question please
spk_5: hey guys and nice quarter on it was that
spk_6: very long as the coins lean and year to year and i think that you had hoped that last quarter would have had a little bit of of bounce back so did the resort to get two quarters were worth a bounce back in this quarter or can you to characterize little bit off more of where the strings came from and quarter
spk_2: church up
spk_3: police sales increased across the board and most for our markets and a product lines cutler sales were especially strong the past quarter and are we believe we're better positioned in these times of shortages then the some traditional semiconductor our competitors we have
spk_2: the overall worldwide semiconductor market
spk_3: is strong end the effects of the pandemic on revenue appear to be subsiding the impact of the pandemic an elective medical devices also appears to be recovering
spk_7: the based on the orders a forecasts and what we've been hearing with currently expect a strong year over year growth the this quarter to quarter ending september thirtieth
spk_5: two thousand twenty one
spk_8: great that great and and so there wasn't any large customers that that was a significant factor
spk_3: the sequentially or or anything like that god knows really across the board and some markets were stronger than others but the
spk_9: it was really and across the border increase
spk_5: that's great
spk_10: and damn dumb you mentioned that day you believe you had some wins where you had drop in products i guess that was in in poplars
spk_5: and so
spk_11: customers or of competitors were who couldn't get product were able to to source as of new essentially that
spk_3: the size of it
spk_12: yes we we do believe we saw some of that in the in the recent quarter
spk_5: data and is that kind of activity
spk_3: continuing our or are you still seeing opportunities like that yeah we've continued to see
spk_13: opportunities week and we continue to see a very strong a demand a particularly with the couplers
spk_5: matter of that's greats and then i i wanted it asked about that the ice layer business you guys mentions the and instant sister work with the the silicon carbide
spk_8: products and related products and that there was a texas instruments put out a thing about a web and are on now i'm using their eyes letters to meet certain i think it was one of the you know rf admission standards her i guess the
spk_1: no federal communications commission or or or something and i think the the your products very sort of natural causes problems that but can you just talk a little bit about that yeah jeff this is damn so sister thirty two or which i think is what you're referring to those are radio frequency noise limits which is as as you correctly pointed out that's an area where it's been tonic isolator had significant advantages over semiconductor isolated like you you mentioned texas instruments so we don't have to have webinars on how the matter get mitigate that noise because we don't have the noise
spk_14: because electron spin is inherently persistent or devices don't require the radio frequency carriers the create the noise pollution that's regulated by sister thirty two so we we do see that as as an advantage and it's a significant advantage for some of our customers
spk_1: and the regulatory environment on those sorts of radio frequency noise as becoming strict as we get more more devices in the internet of things and more more devices
spk_15: don't just out
spk_5: our our lives so we don't want them interfering with other electronics causing other electronics to fail so that's the reason for these limits and are parts perform very well in in those in those sorts of for
spk_1: tests that it and it is it correct to assume that the this is a bigger problem in and sort of the high speed kind of applications that that come with some of that the compound semiconductors like silicon carbide yes it it tends to be ah because the past you run the devices the higher the frequencies are and and then they can transmit ah
spk_8: better through barriers and things like that so so transmitting better as bad when it's noise pollution when it's radio frequency pollution
spk_5: okay great great and dumb so he you know you've taught the in the past about how well your position for the easy market
spk_8: you know have been reading a lot more recently about a lot of capital going into easy t allows electric vertical takeoff and landing
spk_5: he has and silly ass small drones last helicopters were transporting people and goods
spk_8: it would seem like that that your products would be equally if not even better positioned in in it
spk_1: a situation like that were both weight and and power or important parameters yes exactly so so that's fascinating area and the the advantages that we have of lower power and smaller size which we get from our core technology of spintronics are significant advantages in many markets and certainly as you point out it's it's a a big advantage in that type of and that type of market the draw market where of where every little bit of weight is xd or powers extremely important of course lower power translates into smaller batteries and the our devices particularly are tunneling magneto resistive devices are especially efficient for power and we have the smallest devices of their type in the industry we have experience in space and aviation
spk_8: as well as in medical device markets is so we
spk_16: oh we've gotten pretty good at designing for small size and low power
spk_1: and how would you go after a market like that where you know there there's not really any kind of traditional art supply chain yet those those you know things are just starting out with with all these new essentially private start up companies yes so
spk_17: was so we we work to reach those folks through through some targeted marketing we are working on a is you know we have as a letter of conformance from the international automotive task force which is important than some of those emerging sub segments we have a private label partnership
spk_1: the company with strong old automotive sales channels which allows us to reach some of those customers and then i'm week so what we're working to continually get our message out as as you know through webinars and other means to highlight things like go lower power and smaller size and to leverage are excellent reputation and other markets that require small size
spk_5: as and and low power we are working to try to reach some of those smaller companies that you mention but also some of the companies that make the sub assemblies what are called the tier to and tier three suppliers in the automotive industry that might be providing battery management systems are modules for come
spk_18: studies that aren't going to design that themselves
spk_0: that's great thank you and in and out of drop off and let somebody else yeah at the and thanks
spk_1: thanks jeff they queue and this does conclude the question and answer session of that a program i'd like being in the program back to dangle baker ready for the remarks
spk_0: while though no the questions we were pleased to report a forty what forty eight percent increase in earnings driven by a fifty six percent increase in revenue
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