NVE Corporation

Good afternoon and welcome to our conference call for the quarter and fiscal year ended March 31st, 2022. I'm Sue Miller, a senior accountant at MV. This call is being webcast live and being recorded. A replay will be available through our website, mv.com. We issued our press release with fourth quarter and fiscal year results and filed our annual report on Form 10-K in the past hour, following the close of market. On today's call are our President and CEO, Dan Baker, and our CFO, Joe Schmitz. After Dan's opening comments, Joe will cover financial results for the quarter and fiscal year. Dan will cover the business and new products, and then we'll open the call to questions. All lines will be muted until we open the call to questions. Comments we may make that relate to future plans, events, 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 future stock repurchases and dividend payments, our dependence on critical suppliers and packaging vendors, and risks related to the COVID-19 pandemic and supply chain disruptions, as well as the risk factors listed from time to time in our filings with the SEC, including our first filed 10-K. Links to the documents we've filed this afternoon are available through the SEC's website, our website, and our Twitter timeline. Actual results could differ materially from the information provided, and we undertake no obligation to update forward-looking statements we may make. Now I'll turn the call over to Dan Baker, our president and CEO. Dan?

Thanks, Sue. We're pleased to report a 22% increase in net income for the fourth quarter to 79 cents per diluted share, driven by a 15% revenue increase. For the full fiscal year, Net income increased 24% to $3 per share, driven by a 26% revenue increase. The strong growth was despite continuing supply chain disruptions. Joe will cover the details. Joe?

Thanks, Dan. As Dan said, total revenue for the most recent quarter increased 15%, $6.72 million, $5.86 million in the prior quarter. I'm not hearing. All presenting precinct products. Interest and shortages have presented both opportunities and threats. We see new sales opportunities because many of our competitors have longer lead times than us. On the other hand, shortages have impacted our production capacity. We've been quoting 12 to 20-week lead times for most parts. That's longer than before the pandemic, but according to the April monthly market update by one of our distributors, the lead time for parts from one of our traditional semiconductor competitors is 52 to 90 weeks or above. That's worsened from 52 to 80 weeks or above in the January report. We've addressed the threats posed by the shortages by increasing work and process inventory. We invested in additional production and test equipment, and we expanded our production space. We have invested in tooling and materials for alternate packaging vendors, and we have invested in tooling for onshore foundry waivers. Gross margin was 77% compared to 78% last year. Like most companies in the semiconductors industry, many of our costs increased significantly in the past year, including foundry wafers, chemicals, packaging costs, and labor. In response to increased costs, we discontinued most of the product discounting and increased prices in the past year. We believe that the impact of the COVID-19 pandemic on customer demand was significantly less in the most recent quarter and fiscal year when compared to the prior year. We believe the impact of the pandemic on our supply chain, however, was significantly more in the recent quarter and year than in the prior period. Expenses for the quarter decreased 2% from the prior year due to a 15% decrease in SG&A expenses, partially offset by a 4% increase in R&D expenses. The decrease in SG&A for the quarter was due to staffing changes. Interest income for the fourth quarter of fiscal 22 decreased 9% due to a decrease in our available for sale securities and a decrease in the average interest rate on those securities. Debt income for the fourth quarter of fiscal 22 increased 22% to 3.82 million or 79 cents per diluted share compared to 3.13 million or 65% per share for the prior year quarter. For the fiscal year, total revenue increased 26% to $27 million from $21.4 million in the prior year. Product sales increased 26% and R&D contract revenue increased 36%. Net income for the year increased 24% from the prior year period to $14.5 million or $3.00 per division share. an increase from $11.7 million or $2.42 per share for fiscal 2021. Our profit metrics continue to be strong. Gross margin was 77%, operating margin 61%, pre-tax margin was 65%, and net margin was 54%. Capital expenditures were $485,000 in the fiscal year, the most since fiscal 2018. Most of that was for the deployment of two new test handlers to increase our production test capacity and alleviate potential bottlenecks. We repurposed part of the building to make room for the new equipment. Equipment lead times have stretched out considerably recently, and the new equipment purchased this year is the result of procurement efforts started a year ago or more. We believe our stock is a good investment, and we took advantage of buying opportunities in the quarter to repurchase $164,000 of our stock. With a $4.83 million dividend payment in the quarter, we returned a total of $5 million to shareholders. In addition to the past quarter's $1 per share dividend, today we announced that our board declared another quarterly dividend of $1 per share payable May 31 to shareholders of record as of May 16. Now I'll turn the call back to Dan to cover the business, new products, and marketing.