NVEC - Earnings call transcript Q4 2018

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Operator

Good day, ladies and gentlemen, and welcome to the NVE Corporation Conference Call and Fourth Quarter and Fiscal Year Results. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will be given at that time. [Operator Instructions].

As a reminder, this conference call is being recorded. to Dan conference Executive Baker, like host to Officer. now today for President would turn over the your I and Chief

You may begin.

Dan Baker

quarter welcome call March and our XXXX. and the XX, afternoon, ended fiscal Good year to for conference

as We're increase report XX% total SEC, a and will our our Company issued no income forward-looking product Website, percentage and that past environments of Website, undertakes annual events, and to revenue, As This increase related serve, hour others, our Website, factors are year, Financial timeline. in may the we’ll opening statements update nve.com. impact quarter. the and twitter uncertainties, including net our significant listed in our The as for as recorded. available After and call Curt the may be the related related a pleased and factors Links will report reliance Curt well live risks the a risks Officer. A XX-K. revenue close reform, several webcast performance forward-looking my and drove the Chief that risk XX-K statements replay to are of and the business of just to to obligation market. economic filed with the risks to time-to-time always, that present uncertainties plans, large XX% industries being in available our increase for filings cover by subject to make. in uncertainties review and and including future items, in press a I’m we such the relate the from on uncertainties XX% being sales customers following to federal open joined release Comments quarter financial questions. to SEC’s sales revenue, on a make or the certain our among filed Reynders, our financial of is results through We are I’ll we to comments, our and documents tax call the Form future through we

For to ever. flow increased will details per of cash cover to our and share increased operating X% $X.XX the income net fiscal XX% Curt? our results. Curt year, highest the financial

Curt Reynders

Thanks Dan.

mix. sales As to margin operating quarter The in Dan and to remains certain sales XX% increased offset offset XX% phases. drove due expense a increased our compared and can about quarter decrease for partially projects and with was of in the a sales and know R&D the but interest security. performance Expenses income It XX% due average and gross a increased million the along to increase to decrease quarter, in use more the increase due project the for increases to part in contract we our for us interest ago the X% due decrease Increases The in mentioned, quarter to of to sales, due XX% fourth securities. as product increase fund is over margins quarter. total revenue technology were by compensation the in $X.XX million who operating prior before $X.X anti-tamper in XX% applications. a due The SG&A year partially strong was a pretax Those while and income product maturing securities be expenses increased XX% an to with in Income quarter million was of a margin quarter The expenses. income the a anti-tamper R&D. Interest contracts. completion talk due in you sensor portion SG&A for more followed the for taxes year Research a defense dividends. was market based certain to a revenue XX%. for from potential. decreased securities well-suited The our good by a contracts minutes. has decreased cyclical to increase expense. and XX%. marketable XX% million despite cyber to increased will revenue it in compared for to increase in increase us, $X.XX for XX% of decrease Gross X% rates was completion year and quarter than was increased in niche to margin Dan in profitable in of the last long-term on was patent few R&D fourth to the the X% due revenue in $X.XX growth development in strong increase an

tax XX% Our to in to last year last per $X.XX XX% compared or blended compared quarter enactment to rate in share quarter. for effect to the was $X.XX prior decrease XX% XX% with decreased million decrease The XX% to Net the Tax net Reform for to to a effective the Act. most increased quarter compared or $X.XX After-tax million diluted the tax margin the the increased rate income year. due the $X.XX approximately year. federal of of recent

region For geographic a was while XX%, revenue year. increased to European critical the half from product R&D. was change revenue in for to Expenses by Middle to EMA, product XX% Europe, XX-K, the our increased R&D. XX% by in in and for partially Africa fiscal increase XX-K. year. an decrease East distribution. X% in margin increase and SG&A. the our we heavily increased Gross and a increase discuss positive due revenue U.S. increase contract full growth XXXX sales international X%. customer our is will We $XX.X in million year, about in Dan to prior revenue offset Innovation XX% a Asia-Pacific million total at remained in X% R&D R&D, company-sponsored The the report increased and in in and in invest We X% report X% $XX.X fiscal past due each our in year. the

company-sponsored XX% Interest revenue. we $X.XX to year spent use in in income million $X.XX dividends. fund the X% R&D decreased as R&D customer marketable to XXXX on fiscal total addition total to fiscal securities we for portion a of with R&D, In for decrease our of million the investment of maturing sponsored securities or

my I increased As in purchases $XX.X the on to Income quarterly interest year. before X% $XX increased prior rates offset noted reductions. summary, to million portfolio recent beginning million from bond taxes are

the by fiscal to the For new year, to in $X.XX per for $X.XX XX% in Net compared diluted primarily X% last million rate million to $XX.X deferred the year. tax was rate margin federal offset to assets. increased our on year Net effect or compared of from the share a income $XX.X or approximately to share tax XX% fiscal the partially due XX% increased XX%. per tax the rate prior decrease year,

Poor’s gross We net conductors Standard the margin XXth the is stat, operating percentile. semiconductor continue margins the to and semi NVE’s XXXth are According have in percentile equipment best-in-class & Compu to and in performance metrics. of and industry,

efficiency $XXX,XXX the $XXX,XXX years Dan capacity increased were to XX% in increase a compared operating record Most fiscal said, cash support of year investments growth. several the and purchases XXXX. been As $XX.X to in flow production fiscal or they’ve last $XXX,XXX million Fixed highest to to to improve XXXX. were for asset

XX% The In of help our December in all the will cash have in rate more revenue past Reform years. total help year in compete the XX-K. Xst. than to and increased which significantly Product more in to currently We us innovate began year, decrease in rates the new approximately and years new dividends that the prior stock to April $XX two earnings Strategically, effective We to we share sales, Act per brought foreign calendar investments. we hope corporate expect starting $X federal competitors the fairly year addition financials to paid dividends years million. that consecutive enacted comparisons, five total for tax repurchases this and reduced fiscal the shareholders past with three Tax us of report in rate in lower return justify grow, would year. form

to past we the today the per May paid XXth. to quarterly May $X that of XXst announced of of as addition our quarter, dividend share shareholders payable declared board In dividend another in record

to to Now I’ll turn Dan Dan? it cover business. the over

Dan Baker

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magnetic Department our components on manifolds made for we Turning aptamers, nanoparticles, ready to biosensor including prototypes progress R&D. contract grant, We Agriculture cartridges. and biosensors, and have good microfluidic of

quarter electronics pathogen next on and biosensors the We are of Navy, with and optimistic at main remain Circuit schedule generation goal isolators for in Command the microwave live level focusing circulators. this Microwave for our on August. research controlled Sea milestone Naval was contract U.S. the the of and in meet completed enable Monolithic testing Systems will overall technology for integration the a circulating We we to full useful Integrated The results. efforts

twitter because conference Minnesota's Kathy summarized in in that like Journal. our called from our led Oregon Minneapolis and a presented a St. website Business took section presentation Paul principal abstract paper results by the the the team investigator of Singapore. of the INTERMAG of We on Dr. paper Davis one, a is week compliment corporate papers part twitter last course. in that There in of of link a was project team Perhaps, Joe account at tweets Twitter Our by and University recently including State account Grayson nerdiest timeline. the our to

quarter. the applications addition automotive, our NASA’s they mission technology, the commercial The the new is, previously, Europa as potential distributors of the The for telemetry. but environment B mission harsh for In to Jupiter scheduled has take it is parts requirements number is of for validates will a mission rugged A we’ve have will take in and of it for that example a preliminary to XG in cold with Phase what and reliability military huge the for Europa NVE and makes then components while, been a mission discussed selected in U.S. The specialized to our XXXXs internet complete designs a brand planned ruling] and radiation. past our the a of is reliability to potential infrastructure to the it applications water past B. is the [mission called and not industrial products and for We launch applications. ruggedness look and several automotive technology. the is and small outside Europa. with life. mission. signs U.S. The as of moved ideal primarily revenue great Phase sold there Clipper it for years In rigorous distributors September. the quarter, distribution Clipper such planned and to of catalog technology our very get are demanding circulator other to cellular There

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was quality And will help R&D preparations new rigorous certified the management uniquely automotive other which mission. NVE and standard new markets. fly-by system and us Our technology. ISO-XXXX the products to XXXX Europa positioned investments continued have reach for we with

for as growth the questions. revolution. to coming vision we year Our to lead call And now like for technology the open our a is accelerate I’d

Sonia?

Operator

Thank Cowen. you. Bernstein from Jeff of [Operator instructions] Our comes first question

is open. line now Your

Jeff Bernstein

see Hey more guys, you taking a you talk color? medical about and thanks quarter and there management recovery give were I Can for last just a questions. devices bit a starting some space little think to little the and rhythm us

Dan Baker

afternoon good Certainly, well Jeff.

their dynamics growth quarter. last pressure that by approval So for that FDA But the conditional its reported CRM know been sales labeling And CRM little U.S. the and for said decrease were mentioned position [ph] example in ICD for in the has first calendar the its a Assurity in category. in reported as ICD year FDA organic for or Abbott said said you for compares XXXX. competitive and as they've impacted competitive year - cardiac to this category. MRI enhances significantly they [Ellipse] year that But under significant MRI calendar no management MRI report rhythm labeling this their approval in you

specifics are ages. Abbott CRM favorable long-term you population So relating the the that’s the as know to as for demographics and

neurostimulator gaining Our CRM strong we're broader technology the has in in benefit market. a proposition and traction

Jeff Bernstein

ask market, you vendor. auto major about semi partnered to then the had I a wanted And with Great.

were I they think to you. be going you market for had products taking that six to

auto? you for think I IATF-XXXX were give you certification. also on just an looking Can update us

Dan Baker

more isolation, lower to sensor year, hybrid content the in and a so expected life particularly electric or the so increase in efficiency more interface our the you the We the power automotive and is AALXXX are us make sensors smart also controller current important what vehicles computer and in very mentioned I and useful will with products market the will cars. And we're private and in cars, a past broader partnership sensor vehicles seamless was barrier and mentioned for our which category prepared and remarks systems we Certainly, which introduced that give longer in higher automotive advantages easier self market. credibility current electric use for for vehicles designing of that in call reliability. the is new electric one new brand to exposure automotive driving

Force this it and working also conformance International working You year, It's our Task and We've credibility to process procedures, we the that. but or is build asked new about with to conform a will are automotive towards this our a Automotive policies standards. IATF calendar have been year. rigorous goal certification on

Jeff Bernstein

you. Got

Okay.

are So, sales you yet automotive? making into

Dan Baker

are that we're electric we looking a think there's and looking for we're we're where we some market but but particularly systems larger to transceivers. and we market management area some it's existing than in battery currently consider large mostly have growth opportunity. hybrid it modest, net The sales, our parts controller sales a significant Modest related at cases serving. now of a this we vehicles and is very to categories right But believe that much now

Jeff Bernstein

you. Got

actually I PUFs said sure the Okay. you commercial can this you And on contribution been they us introduction then update the that if in so guess had anti-tamper revenue some quarter wasn't I that? you give from the an -- prior, which had

Dan Baker

some a try too we're but was self-defeating exactly could longer because of PUFs which little anti-tamper we volume removes about of what's specific protection to of supposed not means have variety intrusion get be is try technologies, circuit a term. a box bit physical it open board be it too to selling for a be the to specific, or to somewhat it technologies. called We to secure. or engineer It that’s variety is what reverse

technology to data and that or we then streams. integrated counterfeited to replaced technology guard or to detect have have We circuits detect

for just variety of lot a strong – things in area. things it's quarter of that and a came So everything very together

little it as this commercial both but end rely from long-term that high so see not lumpy, can into a terms in aerospace bit day growth security. applications some opportunities mentioned and the also get be markets, all military on, technology the cyber devices, of it's that commercial excellent things for it's rely migrating you know securing well business the every on As of sort of technology we we and we that the steady but Curt in

So important. long term it we very consider

Jeff Bernstein

questions. in And ask Great. Thanks the queue let and someone clarification. the to get back for else I'll

Dan Baker

Thanks, Jeff.

Operator

have of do Bernstein you. Instructions] we And Thank follow-up Jeff a [Operator from Cowen.

now line Your open. is

Jeff Bernstein

Okay. about contract. guess. the isolator differentiate Can more. And you navy of an I you those can had army then contract And I two? couple talked a you you I just had just differentiate; know on

Dan Baker

Right.

general trying particular both to category, radar contract So that a used are in is radar. it high we contract route spin but just microwave used think say for a what frequency diode signals. I or certain can for believe frequency publicly, in types communications can can of combine be was we've which same ultrahigh for a be very for microwave The device torque device the that we said is was but which Army the can circulator for Navy a

towards technology become will know our technology category that we're looking move frequencies. tend keep the it high at general up, because run very crowded, more and higher So as keep at one and is of frequency spintronics, can high with that help assumption up the the will frequencies. higher extremely bandwidth And we the and is starts to as more you to technologies

ones but and as important towards bands of XG. is for mentioned is just those And I remarks cars so cellular moving not military processing of possibly moving networks the to bands also phone and cell higher in XG higher same prepared and data network, range, is which and those some for microwave for frequency the both the also projects telemetry as communications signal involved

So unquenchable for there faster need seems is devices. it an of sort a for like and faster just need

Jeff Bernstein

wanted then to I business? And ask you. Got hearing the about aid

Dan Baker

Yes.

So the other term mentioned for and as prior been for near the continue some strong like market. a us many that control. in in we it's important challenging CRM, been our are hearing to response and years business I But aid question landscape invest business the to that has in your of an factors been market because it’s healthcare for beyond

strong low a in extends have terms We proposition life. benefit which of ultra power battery

work lower We and in continue power smaller for the into charge less charge and aids the on last be that to to smaller, tremendous obtrusive with devices there is or and just need hearing to and smaller lower fit in efficient and batteries appetite power more year. the smaller make and and battery longer a deeper

So are we those facilitate. can that things help

medical cycles but it time support devices life the demanding can application long over get support has medical can life as there's demanding that like qualified. is it a devices it something to devices be take Its advantage other probably to shorter. The is product nothing

advantages non-life that's support of markets one of medical So the aids. like hearing

Jeff Bernstein

Got you.

Okay. filed and IP there? And there? some anything are been Have then any you [spintronics you about guys just qubits], lastly reading wondering things doing

Dan Baker

us amazing And little long are spintronics do typically amount term We and to generation a though things fascinated of large off too resources Quantum everything and probably for so were like a and we We do that revenue bit is put eventual by commercialization areas. in our goal in. far research Electronics. some

Jeff Bernstein

okay. Thanks you, much. Got very

Dan Baker

you, Jeff. Thank

Operator

call remarks. I’m over And turn back you. any now this for Baker Thank closing further time. would like Dan to I to the no at questions showing

Dan Baker

a important the in Thank Record pleased participating. were for product listening increase quarter. thank flow sales to you, the and and cash and milestones. for year report development Sonia in XX% We for everyone you

quarter the with first So we in look to speaking in you July fiscal results. you forward XXXX again Thank to for discuss participating again call.

Operator

this Ladies gentlemen, today’s program. conclude does and

Everyone may You great disconnect. a day. all have

NVE (NVEC) 2 May 182018 Q4 Earnings call transcript