NVE Corporation

Welcome to the NVE conference call on first quarter results. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1 1 again. Please be advised that today's conference is being recorded. I would now like to turn the call over to Dan Baker, President and CEO. Please go ahead.

Good afternoon, and welcome to our conference call for the quarter ended June 30, 2023. This call is being webcast live and recorded. A replay will be available through our website, nve.com. I'm Dan Baker, and I'm joined by Accounting Manager and Principal Financial Officer Daniel Nelson. Daniel was promoted to his current position in early May. and also presented on our last call. He goes by Daniel. I go by Dan to reduce confusion. Also, he's originally from Liberia, and I'm from Columbus, Ohio, so I'm the one with the bland accent. After my opening comments, Daniel will present our financial results. I'll cover marketing and new products, and we'll open the call to questions. We issued our press release with financial results and filed our quarterly report on Form 10Q in the past hour following the close of market. Links to the press release and 10Q are available through the SEC's website, our website, and our Twitter timeline. 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 uncertainties relating to the economic environment and the industries we serve, risks and uncertainties related to future sales and revenue, and risks of credit losses, as well as the risk factors listed from time to time in our filings with the SEC, including our annual report on Form 10-K for the year ended March 31, 2023, as updated in our just-filed quarterly report on Form 10-Q. Actual results could differ materially from the information provided, and we undertake no obligation to update forward-looking statements we may make. We're pleased to report solid growth for the quarter compared to the prior year, despite industry headwinds. Product sales increased 23% compared to the prior year quarter, and net income increased 6% to $0.91 per diluted share. Now Daniel Nelson will cover the details of our financial results. Daniel?

Thanks, Dan. Total revenue for the quarter end of June 30, 2023 increased 20% compared to the quarter end of June 30, 2022. The increase was due to a 23% increase in product sales, partially offset by a 50% decrease in contract R&D. The increase in product sales was despite a downturn in the semiconductor industry. The increase in product sales was primarily due to increased purchases by existing customers and new customers. The decrease in contract R&D revenue was due to the completion of certain contracts. Total expenses increased 42% for the first quarter of fiscal 2022 compared to the first quarter of fiscal 2023 due to a 16% increase in R&D expense a 28% increase in SG&A, and a $212,000 credit loss expense for the most recent quarter. The increases in R&D and SG&A were primarily due to increased staffing and compensation expenses. The credit loss expense was due to an increase in our allowance for credit losses under the newly adopted accounting standard. This resulted into a new expense line in our income statement. Interest income for the first quarter of fiscal 2024 increased 54% due to high yields and security purchase after June 30, 2022. Our effective tax rate, which is the provision for income taxes as a percentage of income before taxes, increased to 24% for the first quarter of fiscal 2024, compared to 17% for the first quarter of fiscal 2023. The increase was due to changes in the timing and availability of tax credits. Net income for the first quarter of fiscal 2024 increased 6% to $4.4 million, or $0.91 per decade, or $4.4 million, or $0.86 for the first quarter of fiscal 2023. The increase was primarily due to increased revenue and increased interest income, partially offset by increased expenses and higher taxes. Net income, as reported, includes an unfavorable non-cash impact of $212,000 or $0.04 per share of credit loss expense under the newly adopted accounting standard. Net cash provided by operating activities increased 51% to $5.03 million for the first quarter of fiscal 2024, compared to $3.33 million for the first quarter of fiscal 2023. The strong operating cash flow more than covered the quarterly dividend. Now I'll turn the call back to Dan Baker to cover marketing and new products and to preview our annual shareholders meeting. Over to you, Dan.