NVE(US:NVEC)2021-10-21 03:15Financial Data and Key Metrics Changes - Product sales increased by 59% year-over-year, total revenue increased by 56% to $6.82 million from $4.38 million, and net income increased by 64% to $3.65 million or $0.75 per diluted share compared to $2.22 million or $0.46 last year [8][10][13] - For the first six months of fiscal 2022, total revenue increased by 56% to $14 million from $8.97 million, with net income also increasing by 56% to $7.23 million or $1.49 per diluted share [14] Business Line Data and Key Metrics Changes - The increase in total revenue was primarily driven by a 59% increase in product sales, partially offset by a 13% decrease in contract R&D revenue [10][14] - Expenses increased by 1% due to a 35% increase in SG&A, which was partially offset by a 13% decrease in R&D expenses [12] Market Data and Key Metrics Changes - The company faced widespread supply chain challenges and shortages of semiconductor materials, but it also gained business from competitors who were more severely affected by these shortages [11] Company Strategy and Development Direction - The company is managing challenges and opportunities presented by global semiconductor shortages by increasing inventories and production capacity [17] - New product lines introduced include tunneling Magnetoresistance gear tooth sensors and expanded isolators with integrated DC to DC converters, aimed at enhancing precision and efficiency in various applications [20][23] Management's Comments on Operating Environment and Future Outlook - Management noted that inquiries from customers frustrated by semiconductor shortages have increased, leading to more design wins, particularly in couplers and isolators [35] - The company is focused on energy harvesting technologies and developing extremely low-power components for applications in the Internet of Things [40] Other Important Information - The company declared a quarterly dividend of $1 per share, payable on November 30 to shareholders of record as of November 1 [16] - A new board member, James W. Bracke, was elected, bringing extensive experience in public company management [28] Q&A Session Summary Question: Increase in SG&A and hiring for R&D or sales engineers - Management confirmed that the increase in SG&A was driven by adding talented personnel to support increased sales and logistics challenges, with engineers also providing sales support [32] Question: Success from semiconductor industry tightness - Management indicated that while specific metrics are hard to quantify, there has been a notable increase in inquiries and design wins due to customers seeking alternative sources for semiconductor parts [34] Question: Lead time for drop-in replacements - Management stated that lead times for drop-in replacements can be as short as the same day if parts are in stock, with the goal of minimizing the cycle time for customer orders [36] Question: IECEx-certified isolators application - Management clarified that while primarily for industrial applications, the isolators could also apply to EVs in environments with explosive gases [37] Question: Advancements in energy harvesting technology - Management confirmed ongoing advancements in energy harvesting technologies, emphasizing the potential for components to run on very low power sources [39]