NVEC - Earnings call transcript Q4 2019

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Operator

Good day, ladies and gentlemen, and welcome to the NVE Conference Call on Fourth Quarter and Fiscal Year Results Call. [Operator Instructions] As a reminder, this call is being recorded. I would now like to introduce your host for today's conference, Dan Baker, President and CEO. Please go ahead.

Dan Baker

Good afternoon and welcome to our conference call for the quarter and fiscal year ended March 31, 2019.

by our joined Financial I'm always, Curt Chief Reynders, Officer. As and is being call being webcast This live recorded. will website, nve.com. replay A be available through our my fiscal will the After we'll open and Curt financial up and comments, of to call review questions. product present development quarter I'll year, a the the cover R&D and opening the release the close following press our annual issued hour filed our report market. past on We and Form XX-K in of our available are the website, Twitter through timeline. and Links to documents our SEC's website relate that performance uncertainties risk make such Comments future that plans, subject our or may we filed risks risks XX-K. future related SEC, related and others, changes results financial to including sales are just trade are and events, factors tariffs filings as including among statements revenue, forward-looking to time our and in to to risks certain uncertainties, to time listed with factors from as the in barriers, and the other as well The statements company undertakes no make. forward-looking may we obligation to update pleased despite an earnings We're year. XXXX enabled in the expense, R&D strategic launches for increase smart in of diluted which share product to past $X.XX development XX% fiscal and per record sensor report first, I'll our a cover in minutes, will few of product the cover details financial but development results. Curt Curt?

Curt Reynders

medical call, can which for a due products in in to the product market Thanks, strong decrease discussed decrease was compared primarily decreases to was sales decrease XXXX and quarter decrease The Dan. January an custom fluctuate. and R&D. last Total fiscal both devices. product product for expected and of Anti-tamper timing fourth to due especially revenue contract medical quarter we sales in decreased anti-tamper in our XX%, an sales, year. in The

year, anti-tamper sales fourth R&D to X% June Gross sales decrease XX% margin prior to We visibility from due some Total from up this believe XX% SG&A, decreased a the increased expenses in in XX% in this by quarter discuss for our revenue maturing anti-tamper quarter. by minutes. securities, Dan for ending to decrease XX%, as quarter, few XX. have our the in our quarter will the partially to of an average quarter mix. XX%, we the a decreased We securities due into on a the offset will due used fund pick offset currently to a partially improved increase Interest securities increase income in rates interest marketable some dividends. R&D. fourth

compared in effects decreased income million was year. to effective quarter. diluted million to Our the the $X.XX reform The per quarter or $X.XX rate XX% prior was XX%, year. of tax tax After-tax past tax or full $X.XX $X.XX share, the compared to was year the net rate in last due for

the product of in decrease and primarily a due year, contract sales, in product The fiscal XX% custom decrease XX%, R&D sales decrease product contract anti-tamper total to due certain R&D. in a due decrease to For decrease sales and X% to revenue was the contracts. a decreased the for the in completion year was in

backlog we development to XX, $XXX,XXX believe and of March contract firm. of As be had research we

We expect revenue, an more in future. SG&A. R&D a to for due increased revenue year. fiscal XXXX offset this be investment was our year Expenses substantial is in increased that the profitable margin by fiscal mix. expense partially X%, XX% year, in which to a the backlog decrease filled due in Gross to prior of XX% XX% increase for a R&D, to XX% from XX%

offset by way. yielded increased our in an more item, interest customer-sponsored which an securities. partially is Interest level R&D, average increase on decrease to with new R&D XX%, R&D of on income in In high a activities expense addition in the rates company-sponsored we sales. of included has the cost to have The marketable activity our due securities, products

year reform. prior the of year, fiscal to due rate to the tax Our impact in decreased XX% from XX% tax

compared net to share strong increased of $XX.X year. XXXX year many year We than last $X per year. modest and XX%. value asset last more or $XX.X paying the started includes to fiscal the losses, in $X.XX income total compared most to in a million securities. since to $X.XX recent As which of million compared Dan past margin for last increased unrealized bond $XX said, were the in XX% the dividends Net purchases income, million. gains increased paid XX% X% share a as Fixed in dividends market brought per per we share, year, our $XX.X from marketable million, to Comprehensive the diluted increased which the record year, million $XX,XXX $XXX,XXX or to to $XX

In to today quarterly over record shareholders million. to of that payable $XX dividends our addition, another declared May Board per we of That XX. $X announced bring will our XX May total dividend share of as

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

Dan Baker

papers Oxide-based with new cover to Thanks, Curt. key a researchers I'll MMM/Intermag paper products, Paramagnetic-free Tunneling technology. industry-leading our and Magnetoresistance to Layers. strategic Characterization presented trade shows. joint paper the last our titled research Magnetic conference Innovative at two future, relating and was or Tunnel our including is of Super TMR Junctions The Magnesium R&D, quarter,

conversion, provide interfaces unlike on smart our features because Internet Internet sensors include sensors, the smart These calibration Things. of of the factory strategy simple in sensors. analog-to-digital smart connectivity centers they The IC. to and are digital Our Things legacy new digital

TMR as because smart such power. is of sensors for technology its ideal size small spintronic inherent precision, Our low elements and

potential. positive, some we product enhancements. several with have customer-driven evaluating customers the already and has Customer reaction We quite been have parts, volume significant several new

our new stepping sensors, With promotional the smart efforts. up we're

at Expo sensors, industry's we'll exhibiting and systems. be conductivity San is Jose, to billed presenting paper a which Sensors quarter, and largest This in the event dedicated as

be in week. April display also been and were next Tokyo the will on major Our a strong in getting The and products show a featured have products show interest. distributors promoting at at trade in England

expanded conditions made good awarded of In Jupiter's contract the and progress R&D. in were it's held extreme up Things, look Clipper the world's is of for life line for We the for couplers. as $XXX,XXX, smart Internet Europa Europa industrial we a one Turning angle launched magnetometer have Clipper quarter, mission burn to The our tunneling was our magnetoresistance contract huge extraordinary moons. it sensors to R&D. well for and and mission. a products test of line the help reliability for the couplers sensors. on not but to past demonstrates including productive testing, under for slightly the so parts and was revenue, space of magnetoresistance could businesses. smart aerospace, more the conditions. on year The tunneling Fiscal billed We've than contract a our We only and of parts our military, low-power XXXX

Letter We and small, Agriculture develop a we of earned XXXXX. and accordance biosensor automotive Department Conformance continued precise, IATF with efficient reliable components to our for the certification grant, medical in completed for We of devices. scheme

anniversary We technology past celebrated Dr. a and come starting NVE's spintronic also We've continue since is lead in long the quarter. a Jim XX-year to to revolution. way in home, our vision Daughton's

to questions. like the Chris? Now for I'd call open

Operator

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

Jeff Bernstein

Dan. Hi

Dan Baker

Hi Jeff.

Jeff Bernstein

any end in you the your device position talk on kind about change Could big about just customer? thoughts is little with a your rebound and of going any market is medical bit there? in what there Or

Dan Baker

Certainly.

formerly is have we've and Medical, the been So, challenges. one that of disclosed short-term Jude customers Abbott, St. there

But revenue Abbott long-term disappointment an as decrease ages. demographics of cardiac example, first They management area in population said the X.X% For is calendar focus. and an reported rhythm favorable for quarter. CRM remain for the CRM the

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

feel it's of challenging been we an it's although So, excellent market, late.

Jeff Bernstein

you. Got

of World design they the is of that And named kind the already – of wins? time hearing I selling in hearing are get that hearing hearing OTC other that advance can't for of enhancement the aid is sold? your aids. companies the What's hearing guess Where of you that, hardware starting going over-the-counter. hardware already of to I of in there's in for Okay. others to enhancement in XXXX, are And and Sound a some and of – – terms or having call like Eargo then aids are Sonova frame your guess over-the-counter you're number one allow some FDA some other customers market. sales that's

Dan Baker

at of the timing who the it's aid we And such for a that closely. lower dispensing going of looking expands market, of it can as Well, a expense products by we point an personal is, or hearing expansion as help are opportunity. as out those need market amplification you precisely aids. And hearing and hearing hearing but near-term many over-the-counter FDA, have isn't through private we're exact say, is proponents that market, aids disclosed The the aids watching obviously market people could hearing the significant certainly or the changes. because over-the-counter And them been inconvenience. label components don't that provide and aids us cost or if it sound some

whose expand for Businessweek the wearable ears categories new people potential fine. talked these cited the technology you And article for are could that market. So, recently recent had even a as hearing about aids

doing things like and could they be tracking So, time. in fitness real translations

from Starkey's article, next hearing in Iron going to was years, that to saying quoted that aids are in President Jarvis So, like X X as the be Man.

could is phrase transmitted market. new the paradigm meaning the a and be mean lot real that ear So, information there and a the of I change think wrist, was, expansion could of significant the aid hearing in the a

We're challenges challenges, we're products. opportunities. of looking at with go So, technical the looking types those the those at that

are are of So, conventional disposable battery. those – use hearing some for rechargeable, example, most whereas aids

the different. are So, voltages

looking broader power to into rechargeable technology consumption, that we're low batteries. try there are allow other to continue but extraordinarily working for that on. range And maintain is team the Our to challenges with our voltage comes that

been very And the products. who with has market. working next-generation aid successful And that hearing so customers are far, specific team in with we're

Jeff Bernstein

guess, that long. with wearable/hearing you like very very you say whether And product today? of you're think I point, I I or Starkey they you're disclosed customer. in in at not Labs as that are about high-end having, whether introduction had, that Can anything big think, product, – sort products one this aid a in a

Dan Baker

a market That couldn't our article very proposition have that is I on referred back is low us, hearing reliability. going and strong aids with specifically comment size, high But Starkey. power, important benefit to and you ways. we a very for small probably

hearing aid and looking would opportunities these be with to expected working we companies next-generation So, for sorts be hearing of aids. at

Jeff Bernstein

Got you.

Okay. the in magnitude needle? you'll And kind Any talk partner a what of then and we in distribution. automotive start there can any market? You have of And of bit those feel kind to little volume order a see idea you you are move figure revenue products there? to can us the for about we need give the so of ASPs actually what can when

Dan Baker

automotive know, powered good are cars, Those electronics, and Yes. to sensors market are questions. automotive more increase than number to – as smaller, more advantages the lower precise, which for And is and expected excellent approach growth you market. our rapidly, projected in in us. are conventional important is of rugged The an

So we IATF and conformance task the have also – now. force

sensing the power So, that for main we where those management And are products areas cars. the amount to and at the interfaces. range smart automotive particularly critical sensors, sensing, sensors where sensing. the and of rotation current are important looking to And – And hook are then for resistance two we're read efficiency electronic indicates computer elements current have made is have in raw which electric those are that hybrid to up sensors, of those vehicles we and are current.

power it. the comes the power want because the don't we consumption but we use the like power to batteries motors manage and in loads, measure do want too to are up much be draining our a to effectively So, manage that and battery, able to

that's of parts. of the big one our advantages So,

or down be we're So, but typically a of sensors market. few to car. smart $X getting sensors on a But $X automotive sensor volume, on the in they're there and qualified dollars range quite the to depending are expected sell sensor depends working They there the element. a the those on them or for the raw it in – few

cars. in opportunity we So, a it range. driving of we a next-generation as lot significant a longer of with for see and autonomous nodes have opportunities a number for vehicles And

possible. parts in of those the we working done are several are qualified, aggressively products challenges those at some X as more that So, have geared we we're very get quickly least get and the that automotive to to pipeline introduced have for or as electronics. We've X and

Jeff Bernstein

smart not similar a ASP? rotation guess, that parts I parts are, And And sensing are these we're the the about? talking

Dan Baker

negative have we not kind of a parts. tend smart we then connotation, – not both smart have raw what We has the smart and call or but to because

both So, the we on angle have sensors.

and which remarks, which have we elements, mentioned just called prepared raw we both our are parts. and ASRXXX, then We as the are good the the on the year, what's sensor, sensor ASRXXX the was of have introduced The angle is those in on some smart and interest, have those AAT I family, market. this

vehicles. power and those of is control. extend advantage And and enough things be So, motion of and it control very of power all more making just – and motor job just moving no helps they're cameras getting the – the wasted would kinds able a that mirrors do of and course, motors those to things. range from be there's do efficiently motor the enough like And to of in cars, to the precisely windows motion -- lots but

So, angle the are two for products. areas, see and we particularly sensing, sensing strong our area another market – where a current those that's

is The are are the are which interfaces, newest sensors. backbone the opportunities well, other, cars. non-sensors, And are as of products those couplers us but the for the network the which

Jeff Bernstein

smart what smart is the ASP sensors? the like on And sensors,

Dan Baker

Right.

So, – they an and put a it. current higher in range the in than number sensors can have volume there on then exact It's they bit depending dollar low on sure from more down volumes. not those I'm the complicated. are few go because the I they're

Jeff Bernstein

Thanks. Great. Got you.

Dan Baker

Thanks Jeff.

Operator

would I'm the now line. to for Mr. not CEO, questions Dan Baker, call on any phone Thank further the turn I any you. to [Operator like President and back further And Instructions] remarks. showing

Dan Baker

comprehensive and and early with results, Annual successful in Thank XXXX record participating to net you first pleased early launches. a Shareholders you, thank August. discuss our quarter you to sensor in increase We income, were income for in smart we're forward the again July we X% planning Well, fiscal to report and XX% for in product speaking earnings look and increase Meeting call.

Operator

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

have day. And all everyone, may a disconnect. You great

NVE (NVEC) 5 May 192019 Q4 Earnings call transcript