NVE(US:NVEC)2019-10-24 00:50Financial Data and Key Metrics Changes - Total revenue for the quarter ended September 30, 2019, decreased 13% year-over-year due to a 12% decrease in product sales and a 30% decrease in contract R&D revenue [7][14] - Net income for the quarter decreased 11% year-over-year to $3.82 million or $0.79 per diluted share compared to $4.28 million or $0.88 per share last year [11] - Gross margin decreased to 79% for the quarter from 82% in the second quarter last year due to a less profitable product mix [10] - Net margin was a record 59% of revenue, attributed to tax benefits from the Tax Reform Act enacted in 2017 [12][13] Business Line Data and Key Metrics Changes - Semiconductor sales decreased 16% year-over-year in the most recent available month, indicating a challenging macro environment [8] - Smart Sensor sales have not been significant yet, but there are several interested customers and an important robotics design win recently [9] Market Data and Key Metrics Changes - The semiconductor market is described as the weakest in a decade, impacting product sales [7] - The company is optimistic about a recovery in the semiconductor industry, which is cyclical in nature [8] Company Strategy and Development Direction - The company introduced three new products, including two new network couplers and a new type of magnetic switch, as part of its strategy to expand its automotive product offerings [17][20] - The focus on smart sensors for the industrial Internet of Things is emphasized as a key growth strategy [24] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the slower-than-expected adoption of the Internet of Things but remains optimistic about its eventual impact on revenues [27][28] - The company is hopeful for a third consecutive sequential revenue increase in the upcoming quarter, driven by new products gaining traction [10][28] Other Important Information - The company has returned over $100 million to shareholders in the form of dividends and stock repurchases since fiscal 2014 [13] - A new quarterly dividend was announced, payable on November 29 to shareholders of record on November 4 [14] Q&A Session Summary Question: When will the Internet of Things make a significant difference to NVE revenues? - Management indicated that while the adoption of the Internet of Things has been slower than anticipated, they believe it is inevitable and are optimistic about its impact starting in the upcoming quarter [27][28]