NVE Corporation

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What's the big attraction in a... Good afternoon and welcome to the NVE Corporation conference call for the quarter ended June 30th, 2024. I'm Dan Baker, NVE's President and CEO. I'm joined by Controller and Principal Financial Officer Daniel Nelson. This call is being webcast live via YouTube and Amazon Chime, and it's being recorded. A replay will be available through our website, nve.com, and our YouTube channel, youtube.com slash nvecorporation. All participants are currently in listen-only mode. After our presentation, there will be a question and answer session. You'll be able to ask a question by pressing star 7 from a phone or clicking raise my hand from the Chime website or app. After my opening comments, Daniel Nelson will present our financial results. I'll cover products and marketing, 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 on X, formerly known as Twitter. Please refer to the Safe Harbor Statement on your screen. 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 related to the economic environments and the industries we serve and risks and uncertainties related to future sales and revenue, 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, 2024. 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 strong earnings and cash flow despite a challenging industry environment and a decrease in revenue from an exceptional year-ago quarter. Daniel Nelson will cover details of our financials. Daniel?

Thanks, Dan. Total revenue for the quarter ended June 30 of 2024 decreased 23% compared to an exceptional prior year quarter. The decrease was due to a 24% decrease in product sales, partially offset by a 28% increase in contract research and development revenue. The decrease in product sales was primarily due to a semiconductor industry downturn, and high inventory levels primarily in the distributor channels. However, forecasts indicate the industry is on a path to recovery in calendar 2024 and strong growth in 2025. Gross margin percentage for the first quarter of fiscal 2025 was 86% compared to 77% the prior year quarter. The increase in gross margin percentage was due to a more profitable product mix and a larger portion of direct rather than distributive sales. Total expenses increased 3% for the first quarter of fiscal 2025 compared to the first quarter of fiscal 2024 due to a 26% increase in research and development expense, and a 14% increase in selling, general, and administrative expense, partially offset by a decrease in credit loss expense. The increase in research and development expense was due to increased new product development activities. The increase in selling, general, and administrative expenses was primarily due to increased sales and marketing activities. We added sales and marketing personnel and increased marketing activities. Then we'll talk about those activities shortly. Interest income for the quarter increased 13% due to higher interest rates. Our effective tax rate, which is the provision for income taxes as a percentage of income before taxes, decreased to 16% for the first quarter of fiscal 2025 compared to 24% for the first quarter of fiscal 2024. The decrease was due to changes in the timing and amounts of federal tax credits and deductions. The 7% decrease in net income in the first quarter of fiscal 2025 compared to the prior year quarter was primarily due to decreased revenue, partially offset by increased gross profit margin as a percentage of revenue, increased interest income, and a lower effective tax rate. With an unrealized gain from marketable securities, comprehensive income decreased just 1% from the prior year quarter. It was an exceptionally profitable quarter, with 86% gross margin, 65% operating margin, 60% net margin, and earnings of $0.85 per share. Operating cash flow increased 16% to $5.85 million for the most recent quarter compared to $5.03 million for the prior year quarter. Operating cash flow more than covered the $4.83 million dividend. Our balance sheet remains strong. Even after a $4.83 million dividend and $917,000 in capital expenditure, Our cash plus marketable securities increased to $53.2 million from $53 million. Now I'll turn the call back to Dan Baker to cover the business. Back to you, Dan.