NVE(US:NVEC)2020-07-23 01:47Financial Data and Key Metrics Changes - Revenue for the quarter ended June 30, 2020, decreased by 27% compared to the prior year, primarily due to a 28% decrease in product sales, partially offset by a 10% increase in contract R&D revenue [4][6] - Net income for the quarter was $2.41 million or $0.50 per diluted share, down from $3.61 million or $0.74 last year, with comprehensive income decreasing only 13% to $3.65 million [9][10] - Cash flow from operations was $3.17 million, compared to $4.54 million in the same quarter last year [10] - The balance sheet remains strong, with cash plus marketable securities decreasing slightly to $70.6 million as of June 30, compared to $70.8 million as of March 31 [11] Business Line Data and Key Metrics Changes - Product sales decreased by 28%, while contract R&D revenue increased by 10% due to the timing of contract completion [6] - R&D expenses decreased by 9%, while SG&A expenses increased by 8% due to staffing changes for more sales activities [7][8] Market Data and Key Metrics Changes - The company expects two more quarters with significant revenue decreases due to delayed orders from important customers, especially in the medical device sector [7] - The pandemic has significantly impacted medical device markets, as many elective procedures were postponed [6] Company Strategy and Development Direction - The company is focused on preserving its workforce, continuing to invest in new product development, and maintaining generous dividends despite the pandemic [5] - New product launches included a high-field TMR magnetic sensor and new power conversion products, indicating ongoing innovation [12][14] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the significant impact of the COVID-19 pandemic but expressed optimism about the long-term future, particularly in critical sectors like medical devices and automation [4][5] - The company is positioned to recover some lost business once the pandemic subsides, with hopes for recovery in early 2021 [7] Other Important Information - The company launched four new products during the quarter, demonstrating a commitment to innovation despite challenges [12] - The annual shareholders meeting will be held via webcast on August 6, 2020 [19] Q&A Session Summary Question: Update on automotive developments and bacteria sensors - Management is working on automotive projects, specifically a current sensor for hybrid electric vehicles, which has a lengthy approval process [28] - Challenges remain with the optimal biochemistry for bacteria sensors, but the technology has potential applications in food safety and medical diagnostics [30][32] Question: Hearing aid market updates - No new wins reported, but the company continues to invest in technology for the hearing aid market, which is expected to grow post-pandemic [44][45] Question: Visibility on PUF orders from military - Interest in Physical Unclonable Functions (PUFs) remains, with ongoing investment in anti-tamper systems for military applications [62] Question: Tax rate expectations - The expected tax rate for the rest of the fiscal year is in the 17% to 18% range [63]