NVEC - Earnings call transcript Q3 2019

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Operator

Good day, ladies and gentlemen and welcome to the NVE conference call on Third Quarter 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, today’s conference maybe recorded. I would now like to turn the call over to Mr. CEO. and President Baker, Daniel Sir, you begin. may

Daniel Baker

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

filed The of year or obligation timeline. tariffs March to will we changes make among Comments As financial risks related and revenue, is our business and risks the and quarterly by Officer. will may plans, to questions. quarter, will uncertainties, always, events, our Curt Reynders, Form and we including related as comments, risk my future as subject our the issued of and in available the our present sales through certain following as others the time-to-time trade and for performance our make. filings listed joined other to to from XX-K I website, Curt Chief factors update be the to we forward-looking well nve.com. factors I forward-looking website in XXXX. Twitter cover available We This SEC past no to barriers, press release that are including future risks our XX, relate our website, are XX-Q call open being recorded. our the on being market. call and such statements to are company that may uncertainties in report undertakes with ended statements results hour items SEC’s live webcast documents and A replay our through opening the review am After the Links Financial will financial close

few and in XX% financial But included sensor first, I our will smart expense, per the pleased cover past in to are cover Curt report We the launches, which $X.XX a of earnings sensors of smart R&D Curt? product details will results. quarter. minutes. share, a despite increase strong development

Curt Reynders

sales in and a was year in contract military in quarter fluctuate. a timing due product the are R&D. can quarter primarily Thanks, decreased in XX% primarily The prior product decrease for decrease to Dan. Total the X% sales that with XX% decrease markets decrease product due to third revenue from which from sales anti-tamper custom a

additional administrative a and offset revenue the however pickup fiscal product XX% changes. fund believe Gross quarter. to and R&D anti-tamper interest a revenue quarter to contracts. margin Interest partially XXXX general from quarter in currently SG&A. securities to the maturing sales certain decrease received The the of was mix. development expenses XXXX decrease Dan for to and will use in of have to The starting fiscal rates XX% decrease due XX% due our orders we expense the as increased XX% discuss the income to of for some staffing next minutes. in increase third of rising of quarter offset third was fiscal increased in increased of completion third We year profitable we XXXX dividends. XX% a quarter a due to securities last our compared due XXXX by by XX% due partially selling, will in R&D third for R&D more Total few in a decrease fiscal contract to

year. to quarter The to about federal includes our to a Comprehensive the compared in be increased of was compared tax of in to income, XX% million quarter $X.XX taxes $X.XX due for last effective before to XX% Our the year. rate income rate or year. rates. X% the We losses, the prior net decreased diluted full for was compared gains rate fiscal $X.XX effects or last effective tax million was and income for full XX% $X.XX unrealized quarter. per which the currently the for million the After-tax net tax year quarter $X.XX expect to million decrease $X.XX share

to X same income per diluted or months flow from increased or first for to drove compared year, in first XX% year. operating compared share purchases $X.XX Cash million operations rest outlays decreased fiscal compared $XX.X first X increased decrease share in fixed $X.XX months the were asset purchases the X million year flow to a in asset cash For a and flow. first fixed in Net to the per million of million Exceptional XX% $XX,XXX last income total X $XX.X million year. first months don’t year. the Comprehensive $XX.X $XX.X $XX fiscal last year. million revenue and compared $X.X the X X% the to Fixed months R&D. of to last expect asset for fiscal strong last was contract in the months due modest cash significant $XXX,XXX to period modest the currently we the free XX%

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

Now, I business. cover it the turn will to over Dan? to Dan

Daniel Baker

I strategic new products Thanks, R&D, and cover a conference. will major Curt. technical

biosensor we As previously of reported, with technology our our feasibility the Department Agriculture biosensor grant. demonstrated of

for aptamer other commercial look government to improve and partnerships the to viability. chemistry will additional We enhance sponsorships agency

of Joint to for are week diagnosis. prestigious the at DC. in cancer the convened MMM-Intermag exosome the The We last only and medical Washington two papers applications future for presented also our X researchers as such is our detection is technology conference possibilities Conference years. research Innovative studying key every

junctions tunneling industry-leading free related of technology. layers. was oxide characterization tunnel papers the The with of TMR One based magnesium our super-paramagnetic paper titled magnetic magnetoresistance or to

technical Davies, sessions. Dr. a paper and Joe two our shared of presented One researchers,

is Our research, goal products. not but just practical

of sensors, introduced are the on new key strategy particularly digital and conversion, we Magnetometer Things of Internet Smart the and our Those IC. quarter, to smart simple focused automotive analog the the calibration submarkets. they factory Angle Sensor. sensors interfaces Smart Things are a new Internet in Smart digital to our strategic Things. The Our sensors of In Internet Things is huge of digital connectivity market, because the the provide past include to strategy. smart, two features industrial products, Internet and unlike legacy

smart of IATF washer on highlighted versatile the and an our a sensor. world’s is using as a is sector. strategy. calls, smart magnetometer the can windshield XXXXX There a car and for Trade the of system and the hobby management of importance in using conformance automotive in There proximity magnetic Things. automotive system Show tunneling sensors for at a magnetoresistance the also the application past are the standard and quality second new of for channel. quarter the sensor new that new angle first Letter video has On demonstrations certifies and sensors. accordance and And isolated in Internet the quality smart Applications to on used sensor we semiconductor and XXXXX. a demonstration advanced demonstration first for established or is The as industrial another the and NVE of automotive previous sensor of a pump. that we website automotive certification a XXXXX design am of IATF Sensors demo manufacturing The a Conformance report for that that management scheme sensor. and player our is to channel. growth with I of letter IATF sensing motor a stringent the A applications current and be We discussed products product robotics quarter. smart include We website sensors applies components demonstrated the prototype automotive automotive industry. high-speed the speed pleased our YouTube precision xylophone YouTube mechatronic our earned past a our Midwest show automotive billed

to space Jupiter the parts rugged aerospace life not reliability call, our it our burn our was of a than revenue one of look and but help the our, test demonstrates mission. a space huge contract so The we Clipper since our of could to moons mission couplers military, programs, for and last for conditions the for business. Turning $XXX,XXX, it’s the awarded Europa slightly in on and more for were contract of expand is

the Clipper Psyche ferromagnetic recently between The include parts asteroid unique is and composition. journey to a addition to asteroid’s will study launch a magnetometer carrying to and trip a ferromagnetic our mission, to spacecraft’s to metal probe. for parts. Mars space Psyche Jupiter the the Europa a is scheduled In we payload in the world The NASA mission evaluation provided XXXX. It’s

call like to open I’d questions. for Now, Chelsie? the

Operator

the our first And you. from Cowen. comes with of question Thank Jeff Instructions] Bernstein line [Operator you. Thank

Your is open. line

Jeff Bernstein

Hey, guys.

of Just questions. a couple

QX of were that script the in increase the is is mentioned quarter You year? that or expecting next sales fiscal that fiscal QX to following you

Curt Reynders

be would year of ‘XX. that Jeff fiscal fiscal Hi, QX

Jeff Bernstein

your little a and us it, what’s Management And aid hearing maybe then the on going give you can Cardiac Got about with Rhythm business okay. customers? update

Daniel Baker

is Dan. this Sure,

the neurostimulator technology strong general and over-the-counter in don’t business that as was expense been people CRM the remain the know pacemakers as may they hearing the that the It’s challenges, population help there Rhythm So they and for like be the we’re reported lower the recent in face reported are Management boomers aids we or business said as demographics with favorable in because dispensing who it so, could have gaining has out hearing favorable has the for pacemakers changes was aids. the components remain cost we’re And some down as us next line broader with need Cardiac term in know, CRM traction probably a market some so you quarters market year modest possible many also them Cardiac been going the you our need they demographics that in challenging could and business. said and term Rhythm X% a point hearing near aids, and but the and business in business. with so expand deregulated reported of again good the downturn in ICDs, Abbott has this their ages, that it’s morning about you the of to long aids a benefit and modestly been hearing CRM, know inconvenience and age long-term but this business aids, as far they baby or hearing proposition as as Management

Jeff Bernstein

the And with on there? existing your what’s customer, with going business

Daniel Baker

Abbott, Jeff? You’re to referring

Jeff Bernstein

aids. No, in hearing

Daniel Baker

our Internet so reduce on the but doesn’t business are is it stable, solid prepared in is goal excellent an smaller, doing of mentioned markets has markets is to automotive of the is markets of have medical goal medical into Things us applicable the and sensors been proposition more and expand I growth aids projects as automotive some the to our reliable I we that that a that’s markets. have prepared benefit hearing the have those with so to these industrial the it smart Things to markets potential sensors, the lower we of that smart this remarks, power, the but Things good market are we’re Internet business, business continue outside in Well, those in to of provide medical remarks, the for mentioned particularly more and our to of kind to in products continue emerging Internet innovate strategic that in dependence

Jeff Bernstein

your to in about a GMR do of sensors having at I and that you every light an and about centered all is sensors had think potential and sensors I display guess what CES, a little AMR automobile? just of know, So, pressure terms guess, number XX you sensors sensors, they in talk magnetic automobile, in Infineon in opportunity talked bit on

Daniel Baker

we strong some Tunneling current ones you we it the electric We so, driven as content sensors and sensors and targeting smart more and with vehicles number launched that we the that potential a especially rapidly driving angle and we growing see has world’s prepared I tunneling systems, am sensors excellent and innovations precision mentioned become targeting lots cars lower could sensors, which smart automated where angle areas, have of need market automated newer of rotation technologies vehicles are systems as TMR sensor I we’re sensors sensor angle amount excellent driving that magnetoresistance remarks, doing first with advantages, mentioned such I or by particular tremendous potential autonomous the automotive the an proposition think but is an there the is quarter Magnetoresistance and and of more hybrid sensors than in so power, the sensor, is we not more benefit a as important. the past sensors those in it we’re more highlighted so sure cars number become and an as we market come in up of and see more and exact lots in

Jeff Bernstein

the question. ask and let Great, someone thanks. a queue in I’ll back hop

Daniel Baker

Thanks, Jeff.

Operator

with a you. Jeff Instructions] follow-up We Cowen. Bernstein question Thank do from [Operator have

open. Your line is

Jeff Bernstein

Right, up no step one to going if else yes. is

food additional project other So, future on deliverables the what’s for food safety you and you for side, about clarify can on looking of Can safety any mentioned USDA sort the and project funding with applications? just et going etcetera. give that and you details the then cetera

Daniel Baker

Certainly.

for and lots folks a overcame from some message scaling the know samples at sample that haystack biosensor metaphorical such the exciting we needle some as for overcame critical an microfluidics which and big our project vegetables people sick that’s those is such the challenges USDA could find rinse area make believe the sensor new that of with say which you part fresh exosomes hundreds focus can the bacteria deploy at of opportunities of project food for very our water that challenges the that goal we not in technology to met fluid of but our medical goal So, a look area the diagnosis. really and USDA we thing, so that important we’re as we in and for a the aptamers in some as large large they’re and the of of main cancer industrial main of applications safety we solvable interconnects, so technology have looking to are use was aren’t that demonstrated that we

determined it get commercialized. are we and to technology [ph] powerful it’s So

Jeff Bernstein

you have standpoint might commercial safety any a you when do revenue or food from have medical? So, idea from

Daniel Baker

this had in that exact parallel project as You talented future to calls. so this to people time give hope an to to market multiple we we area know, and the project have reduce in on about are fast it it’s committed smart with working are get to some have news fast to hard timeframe we the we runs to takes items we who it and as can it

Jeff Bernstein

talk products, that had going you those? Okay. with a relationship? the about last that you you of a you little just update knew I one then what’s distributor gears was of reselling change And to six the another East then that can can a bit, maybe in Far on semiconductor bit I guess partner little And added I and cover had think just distribution? your

Daniel Baker

Yes.

such six might be been they’ve the partnership both two private hasn’t them, line the last new under released now, We up So are in had products, us label opens products produced partnership, up sales, the so an the yet, ramp important new huge would that launched yes, brand partner we sales working to our have it an that for in it’s but and it for report. their long-term automotive. it’s and important in markets as we eight and past well quarter and

So leading they market. the in of are semiconductors a automotive supplier

for customers, particularly get like we that are just important very scale, see risk into NVE, not us who with the and we or a familiar partnership it be have. notoriously at insular. automotive And and are companies always that of presence support as larger don’t helps because our have local averse getting So the that may that markets

Taiwan, factories Internet a of to Korea, make of industrial, more as our the and new in and going products, Things number efficient products some added working well. distribution sensors, manufacturing. there with, our are mentioned, traditional we’re far particularly smart some There Asia with to our that China, with that’s very new industrial we’ve them of interest prospects automate distribution, in As automation. particularly as for And you is in for

tend specialized their they They way. products well, pleased be adding to not our of know very we’re huge distributors they know reselling very with distributor, buying not the So a value and that or mostly expertise they’re are industry well, lot worldwide that our and there. distributors

learning time We effort and savvy and have lot of our have that distributors value-added are products. a in spent, invested technically

Jeff Bernstein

have And guess, doing Sales. he’s you of talk just Can about returned? you he’s veteran but a Head I what new, since

Daniel Baker

some do Well Sales very to, I mentioned, Sales ago about promoted Skerke, sure strength not with a our who who to mentioned, year was I products that we the knows folks of very inside-out exactly Midwest, what customers, helping Manager. know to which ways our Sensors He’s been guess can well, Manager, we have them. talented exemplifies really – is well leading but and traveling have I referring he you’re of and those I’m Max a up NVE, visiting distributors a which revolution, is are spintronic solve committed And their problems. products of who our come who

added team very but people. the to a to increase the here, an and We’ve in So are talent example R&D see of our them is addition the pleased of with that being group sold. have we’re have biased, admit latest them we products, built we large products board. people I people also amazing other it sensors And And get The get of reflects get very on several – talented just and what excellent to can ability that do. personnel. smart

Jeff Bernstein

you R&D? things discipline could more the the know don’t lightly, little do bit guys delve so into I And maybe a of ramp on you

Daniel Baker

because to Well, new new they’re smart not sensors customers, so paradigm are, they’re just all digital. for lot And support a they of is smart are sensors. paradigm a it for a us

get some We we adjust precise. don’t them – do extremely products traditional of that So to our using lasers. we them adjust with

we’re them. it cut and these actually shape them And doing So products, digitally. we with

digital. is our So testing

Our parts in now them. have calibration memories

built automatically. in handlers, in around are that our the called things move the electromechanical to them what new, we’ve new so testers, which mechanical, And are parts get invested

we here. course, of industrial we So sell don’t it automation, use just

invested So in that. we’ve

electronics. running not embedded software, they’re have just on means software, products Our which

and – work it do that circumstance. efficiently write have very and the and then kits sure And So we make that conceivable software also people kits. have development under any it who can evaluation products we

up our products so the of software-based inside But types computers of And the evaluation customers you new are hook I know for kits already those and to these on bit some us, will allow sensor you products a that. demonstrations boards. So to and may YouTube, or follow little us look seen you of if are that modify will. have those

into to USB software-based we a are based up are that. PCs, those they be the to and market equipment this products. and hook to do to get in that’s the committed built So we – bought need do and we things market And products, have to those we’ve the leader We’ve on that ports. people, this the we infrastructure, now hired

Jeff Bernstein

update Got torque circulators? great. it. That’s on microwave then isolators any And and

Daniel Baker

hoping they make final but the that keep I the army haven’t. will public, report

was been it’s with demonstrated research that, a spectrograph. contract when army of the diode successfully the completed that feasibility spin-torque So we last microwave a that year

technology The course, in an of Things. military that So it. the speed uses could us help are lead to and could there with increase for of coupler Internet

So an that speeds it lot But it’s bits it’s through it’s awful go program. not exciting specifically guys the talk can there’s because able we that our longer amazing, a military of was the it. to demonstrate and about technology, number term, were

Jeff Bernstein

something without you some et Is or kind okay the of or pursue commercial exclusivity cetera? there government’s products or could

Daniel Baker

with are military. the – this And the commercial But Well, the of things the a when to don’t that of by applications, business army. they some was all restrictions the global a specific usually that to funded reason American come us those into people the help up military part are play do and deploy. of part products. it to a it’s army contract on industry do those reason There small the to But hire sort the can is we technology and have that benefit. the build pursue

Jeff Bernstein

very Sure. Alright. much. Got Thanks it.

Daniel Baker

Jeff. Thank you,

Operator

Thank the turn I’m questions no this to Daniel now call time. you. remarks. at back I’d Mr. for And showing closing further like to Baker

Daniel Baker

for forward you and discuss questions. fiscal and product were in to launches early cash participating earnings successful year you look sensor flow, thank Well, you Thank with quarter to smart Jeff report again results. in for the the fourth Conformance. call. and pleased May We to thanks and We speaking IATF strong

Operator

thank the does you today’s gentlemen, participating for and This conference. Ladies in conclude program.

may a have You disconnect. Everyone day. all great

NVE (NVEC) 23 Jan 192019 Q3 Earnings call transcript