NVE(US:NVEC)2022-10-19 22:24Financial Data and Key Metrics Changes - Net income for the quarter increased 67% to $6.09 million, or $1.26 per diluted share, driven by a 57% revenue increase [6][13] - Total revenue for the quarter increased 57% to a record $10.7 million, compared to $6.82 million for the prior year quarter [7] - Operating margin increased from 60% to 67.3%, a 730 basis point improvement [12] - For the first six months of fiscal 2023, total revenue increased 29% to $18.1 million from $14 million for the first six months of the prior year [14] Business Line Data and Key Metrics Changes - Product sales increased by 59%, while contract R&D revenue saw a 5% increase [7] - Anti-tamper products for the defense sector showed strong sales, helping to offset weakness in the medical device market [9] Market Data and Key Metrics Changes - Sales increased across most markets and product lines, with notable strength in anti-tamper products for defense [9] - The company faced supply chain challenges but improved execution allowed for increased product shipments [10] Company Strategy and Development Direction - The company is expanding production capacity and investing in new equipment, expecting to invest about $1 million or more in additional production and test equipment for the rest of the fiscal year [11] - The company is focusing on product development in areas such as DC-to-DC converters, which are relevant for industrial and automotive applications [18] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about continued strong year-over-year revenue growth despite potential supply chain headwinds [30] - The company sees opportunities in the over-the-counter hearing aids market and electric vehicles, with design wins in power control and conversion [32][34] Other Important Information - The company paid a $1 dividend per share, marking the first time earnings have covered the dividend for both the quarter and six-month periods since it began paying dividends in 2015 [16] - The company achieved significant product certifications, including intrinsically safe certification and VDE certification, enhancing its market position [20] Q&A Session Summary Question: Details on revenue sources for the quarter - Management indicated that the revenue increase included catch-up shipments, new customers, and increased volumes from existing customers, particularly in the defense sector [25][26] Question: Future revenue trajectory - Management expects to maintain strong year-over-year revenue growth, although some business may be lumpy [28][30] Question: Opportunities in hearing aids and EVs - Management noted design wins in the hearing aid market and ongoing work in power control for electric vehicles, indicating potential for future growth [31][33] Question: Status of contract with Abbott - Management confirmed ongoing negotiations for a contract renewal with Abbott, aiming to finalize discussions by the end of the year [46]