Q1 2022 NVE Corp Earnings Call
[music].
Thank you for standing by and welcome to the envy of corporations first quarter of 2022 fiscal year results. At this time all participants are in a listen only mode. After the speaker's presentation. There will be a question and answer session to ask a question. During the session you will need to press star 1 on your telephone as a reminder, today's program may be recorded.
I would now like to introduce your host for today's program, Daniel Baker, President and CEO. Please go ahead Sir.
Good afternoon, and welcome to our conference call for the quarter ended June 30 of 2021 with me is our Chief Financial Officer, Curt Reynders. This call is being webcast live and being recorded a replay will be available through our website N V E. Dot com. After my opening comments Curt will present, the financial review of the quarter and I'll cover the.
Business and then we'll open the call to questions.
We issued our press release with first quarter results and filed our quarterly report on form 10-Q in the past hour following the close of market links.
The links to the press release from the 10-Q are available through the SEC website, our website and our Twitter timeline.
Comments, we may make the relate to future plans events financial results or performance are forward looking statements that are subject to certain risks and uncertainties, including among others such factors as risks and uncertainties related to future sales and revenue uncertainties related to dividend payments and future stock repurchases and risks related.
To the COVID-19 pandemic as well as the risk factors listed from time to time in our filings with the SEC, including our annual report on form 10-K for the year ended March 31.2021.
As updated in our just filed 10-Q.
Actual results could differ materially from the information provided and we undertake no obligation to update forward looking statements we may make.
We're pleased to report a strong recovery from the pandemic impacted year ago quarter for the quarter. We reported earnings of <unk> 74 per share versus <unk> 50 in the year ago quarter, driven by of 60% increase in product sales.
Now Curt will cover the details of our financial results Kurt.
Thanks, Dan.
Total revenue for the quarter ended June 32021 increased 56% to $715 million.
<unk> to 459 million last year due to a 60% increase in product sales, partially offset by a 14% decrease in contract R&D revenue.
This was our highest revenue quarter since 2018.
The COVID-19 pandemic had a significant impact on revenue in the past year.
We believe those effects are subsiding, although risks and uncertainties remain.
Expenses increased 3% for the quarter from the prior year due to a 31% increase in SG&A, partially offset by an 8% decrease in R&D.
The increase in SG&A was due to increased employee compensation expense.
The decrease in R&D expense was due to staffing changes and the completion of some new product developments.
Interest income decreased to $290000 for the most recent quarter from 399000 in the prior year quarter due to decreases in our available for sales securities and a decrease in the average interest rates on those securities.
Net income for the quarter was 3 point of $5.8 million or <unk> 74 per diluted share.
Compared to $2.41 million or <unk> 50 last year.
Gross margin decreased to 75% versus 82% for the prior year quarter due to revenue mix and net margin was a solid 50%.
We pay the 1 dollar per share dividend in the past quarter and today, we announced that our board declared another quarterly dividend of $1 per share payable August 31 to shareholders of record.
As of August 2nd.
Now I'll turn the call back down to cover the business Dan.
Thanks, Curt I'll cover business and marketing.
We continue to manage the challenges and opportunities presented by global semiconductor shortages. Some of said shortages could last several more years raw material and packaging service lead times of increased and prices of many raw materials of increased.
We've address these threats by increasing inventories at all stages and increasing our production capacity to support converting that inventory to finished goods.
We've increased some prices, where we've had to because of higher material and labor costs for other parts, we've been able to keep our price is the same while improving our competitive position.
The shortages of created opportunities to provide products, where we have drop in replacements for competitors, particularly couplers.
We've won some business because we of parts available and we hope to keep that business by demonstrating more reliable supplier with excellent product performance and quality.
Our advanced technology team continues to work on new and improved tunneling Magneto resistance or TMR sensors, which have more signal and use less power than conventional sensors.
This is especially important for automotive current sensors, which are a key element of our long term growth strategy.
Our advanced technology team also worked on Spintronics memory or M Ram under a customer sponsored R&D contract for custom parts.
<unk> is 1 of our core technologies, we manufacturer M ramps for specialized applications, such as anti tamper and these programs allow us to build our technology capabilities.
Turning to sales and marketing most of in person industry trade shows were canceled or were virtual in the past quarter, but 1 of our distributors participating in the small in person exhibition in late June in Northern Italy.
We hope there will be more in person exhibitions.
Sensor plus test as an important industry trade show, it's normally held in Germany, but took place virtually in the past quarter.
It's billed as the industry's largest event dedicated to sensors connectivity and systems.
We participated as a co exhibitor with the angst and Pfister 1 of our European distributors we.
We had several new products at the virtual booth and Webinars after the exhibition.
In the past quarter, we presented our couplers that of webinar on Silicon carbide power control of hosted by angst and Pfister silly.
The silicon carbide transistors are leading edge devices that are ideal for power control, because they're faster and have less energy loss in older Silicon transistors.
Our couplers are ideal for transmitting signals to these transistors, because they have best in class isolation and common mode transient immunity isolation enhances reliability by protecting delicate electronics in harsh environments like electric cars.
And common mode transient immunity allows the circuitry to switch faster and therefore operate more efficiently.
A major industry Research conference of the Tripoli International Magnetics conference or <unk> for short was held virtually in the past quarter. Originally scheduled to be held in Leon France. The conference was held virtually due to the pandemic.
5 of our researchers authored the paper titled magnetic viscosity and high precision Magneto resistive field sensors at the <unk> conference.
Overcoming magnetic viscosity to improve the accuracy and precision is an example of our leadership in sensor technology.
Joe Davies senior physicist and program manager was also the sensor expert on a panel of experts.
Although we're taking advantage of virtual events, we look forward to the return of in person exhibits this quarter.
Sensors Expo build as north America's largest event dedicated to sensors connectivity in the Internet of things has been postponed several times, but it's still scheduled for September in San Jose, We plan to exhibit and our folks had champing at the bit to get in front of customers.
We last attended sensors Expo 2 years ago, and promoted our new smart angle sensors with the smart sensor based robotics xylophone, playing do you know the way the San Jose.
We've expanded our smart sensor lines since the last sensors Expo, but we plan to reprise the popular demo.
There is a video of the 2019 robotic xylophone on our Youtube channel.
Our annual shareholders' meeting will be held the August 5th via telephone.
I have to note with sadness the passing of 2 members of the envy of family the past quarter.
Both of whom some of you will remember from our in person annual meetings.
Kathryn Herman who coordinated at our annual meetings and greeted shareholders as they arrive.
The way unexpectedly in May.
She worked here more than 23 years and handle the variety of accounting Investor Relations and human resource functions. She is deeply missed.
We also lost form of director Robert H Irish and May Bob was on our board for 22 years from 1992 until he retired in 2014.
In addition to serving on our board he was the consultant of the company until 2003.
He was the dedicated director with a big personality.
The first annual meeting agenda item is election of directors, Gary Maharaj isn't standing for reelection Garry joined our board in 2014, when Bob Irish retired.
He has provided strong oversight oversight and valuable advice and of 7 years on our board. We appreciate the service.
Gary will be concentrating on his day job of CEO of <unk> incorporated and we wish them continued success.
We are pleased to have been able to nominate the Dr. James W. Bracket, the replace Garry on our board.
Jim is an accomplished executive and highly experienced public company director. He was CEO of life core of biomedical from more than 20 years. His management technical medical device and public company experience and his medical education qualify him to serve as the director.
After voting for directors. The second annual meeting agenda item is approval of officer compensation as detailed in our proxy we don't pay of overpay. Our officers our officers have the same fringe benefits as all employees and there are no executive perks of Golden parachutes.
The third annual meeting agenda item is ratification of our auditors boule TLLP as our auditors for this fiscal year of the year ending March 31.2022.
The lay audited our of past 2 fiscal years and we recommend the approval for our next audit.
A popular feature of our in person annual meetings was live hands on product demonstrations.
Instead of that this year Theres of platelets call of 2021 annual meeting demonstrations highlighting recent sensor coupler in internet of things innovations the.
Playlist is up now on our Youtube channel and there is a link on our investor events page.
We look forward to returning to in person annual meetings next year.
Now I'd like to open the call for questions Jonathan.
Certainly the ladies and gentlemen, if you have a question at this time. Please press Star then 1 on your Touchtone telephone. If your question has been answered and you'd like to remove yourself from the queue. Please press the pound key.
And we have a question from the line of Jeff Bernstein from Cowen Your question. Please.
Hey, guys.
Nice quarter.
It was.
Strong sequentially and year to year and I think that you had hoped that last quarter would have had a little bit of a bounce back. So did we sort of get 2 quarters worth of bounce back in this quarter or can you just characterize a little bit.
More of.
The strength came from in the quarter.
Sure Jeff.
The sales increased across the board in most of our our markets and the product lines.
Couple of sales were especially strong in the past quarter.
And we believe we're better positioned in these times of shortages than the.
Some traditional semiconductor competitors we have.
The overall worldwide semiconductor market.
Is strong and.
The effects of the pandemic on revenue.
Year to be subsiding.
The impact of the pandemic on elective medical devices also appears to be recovering.
Based on the orders the forecasts and what we've been hearing we currently expect a strong year over year of growth.
This quarter the quarter ending September 30th.
2021.
Great that's great and so there wasn't any large customer that was a significant factor.
Sequentially or anything like that.
No. It was really across the board some markets were stronger than others, but.
It wasn't really an across the board increase.
That's great.
And.
You mentioned that you believe you had some wins, where you had dropped in the products I guess that was a couple of others.
And so cut.
Customers of competitors.
Couldn't get product, we're able to source product from new essentially of that.
The size of it.
Yes, we do believe we saw some of that in the in the recent quarter.
Gotcha.
And is that kind of activity.
Continuing or are you still seeing opportunities like that.
Yeah, we've continued to see.
Opportunities.
And we continue just you see of very strong demand, particularly with the couplers.
Gotcha, Okay, that's great.
And then I wanted to ask.
About the Isolator business you guys.
The sister work with the Silicon carbide.
<unk> and related products and the.
There was the Texas instruments put out of thing about a webinar on using their isolator has to be.
Certain.
It was.
RF admission standards for I guess the.
Federal Communications Commission or something.
And I think your products.
The natural won't cause those problems, but but can you just talk a little bit about that.
Yes, Jeff this is Dan.
So <unk> 32, which I think is what you're referring to those are radio frequency noise limits, which is as you correctly pointed out that's an area, where it's been tronic isolator has significant advantages over semiconductor isolate or as like you mentioned, Texas instruments.
So we don't have to have webinars on how to mitigate mitigate that noise because we don't have the noise.
Because of the electron spin is inherently persistent or devices don't require the radio frequency carriers to create the noise pollution. That's regulated by <unk> 32, So we do see that as an advantage and it's a significant advantage for some of our customers and the regulatory environment on those sort of.
It's of radio frequency noise.
Coming stricter as we get more and more devices in the internet of things and more and more devices.
Just throughout.
Our lives. So we don't want them interfering with other electronics, causing other electronics to fail. So that's the reason for these limits and our parts performed very well in those and those sorts of our tests.
Gotcha, and then is it correct to assume that this is the bigger problem in sort of the high speed.
Kinds of applications that come with some of the compound semiconductors like silicon carbide.
Yes, it tends to be.
Because of the past you run the devices the higher the frequencies are in and then they can transmit.
The better through barriers and things like that so.
So transmitting better as bad when it's noise pollution when its radiofrequency pollution.
Okay, great great and so you've talked in the past about how well your positioned for the EV market.
I've been reading a lot more recently about a lot of capital going into easy Tll's.
Electric vertical takeoff and landing.
Essentially.
Small drone slash helicopters for transporting people and goods.
It would seem like that.
Thank you of products would be equally if not even better position.
A situation like that where both weight and power.
<unk>.
Important parameters.
Yes, exactly so so that's the fascinating area and.
The the advantages that we have of lower power and smaller size, which we get from our core technology of Spintronics.
Our significant advantages in many markets and certainly as you point out it's a big advantage in that type of that type of market the drone market, where the where every little bit of weight is power is extremely important of course lower power translates into smaller batteries.
And our devices, particularly our tunneling Magneto resistive devices are especially efficient for power and we have the smallest devices of their type in the industry, we have experience in the space and aviation.
As well as in medical device markets. So we are.
We've gotten pretty good at designing for small size in the low power.
And how would you go after a market like that where there's.
There's not really any kind of traditional.
Supply chain.
As you know.
Things are just starting out with all of these.
Essentially private startup companies.
Yes so.
So we work to reach those folks through through some targeted marketing.
We are working on as you know we have a letter of conformance from the international Automotive Task Force, which is important in some of those emerging sub segments. We have of private label partnership with the company with strong automotive sales channels, which allows us to reach some of those.
<unk> customers.
And then.
We.
We're working to continually get our message out as you know through Webinars and other means to the highlight things like lower power and smaller size and to leverage our excellent reputation in other markets that require a small size.
And low power.
We are working to try to reach some of those smaller companies that you mentioned, but also some of the companies that make the sub assemblies, what are called the tier 2 and tier 3 suppliers in the automotive industry that might be providing battery management systems or modules for companies that arent going to design that themselves.
That's great. Thank you.
Ill hop off of let somebody else ask the question.
Thanks, Jeff.
Thank you and this day.
This concludes the question and answer session of today's program I'd like to hand, the program back to tangible Baker for any further remarks.
Well if there are no. Other questions. We were pleased to report of 41, 48% increase in earnings driven by of 56% increase in revenue.
We look forward to speaking with you again on August 5th for our annual meeting and in October to discuss second quarter results. Thank you for participating in the call.
Thank you, ladies and gentlemen for your participation at today's conference. This does conclude the program you may now disconnect good day.
[music].
[music].
[music].
Thank you for standing by and welcome to the N P. Equaled operations first quarter of 2022 fiscal year results. At this time all participants are in listen only mode. After the speaker's presentation. There will be a question and answer session to ask the question during the session you'll need the press star 1 on your telephone as a reminder, today's program may be recorded.
I would now like to introduce your host for today's program, Daniel Baker, President and CEO. Please go ahead Sir.
Good afternoon, and welcome to our conference call for the quarter ended June 30th 'twenty 'twenty..1 with me is our Chief Financial Officer, Curt Reynders. This call is being webcast live and being recorded a replay will be available through our website N V E. Dot com. After my opening comments Curt will present, the financial review of the quarter and al.
Cover of the business and then we'll open the call the questions.
We issued our press release with first quarter results and filed our quarterly report on form 10-Q in the past hour following the close of market.
Linked to the press release from the 10-Q are available through the SEC's website, our website and our Twitter timeline.
Comments, we may make the relate to future plans events financial results or performance are forward looking statements that are subject to certain risks and uncertainties, including among others such factors as risks and uncertainties related to future sales and revenue uncertainties related to dividend payments and future stock repurchases and risks related.
The COVID-19 pandemic as well as the risk factors listed from time to time in our filings with the SEC, including our annual report on form 10-K for the year ended March 31.2021.
The updated and our just filed 10-Q.
Actual results could differ materially from the information provided and we undertake no obligation to update forward looking statements we may make.
We're pleased to report a strong recovery from the pandemic impacted year ago quarter for the quarter. We reported earnings of 74 cents per share versus 50 in the year ago quarter, driven by a 60 per cent increase in product sales.
Now Curt will cover the details of our financial results Kurt.
Thanks, Dan.
Total revenue for the quarter ended June 30th 2021 increased 56% to $7.15 million.
Compared to 4.59 million last year due to a 60 per cent increase in product sales, partially offset by a 14% decrease in contract R&D revenue.
This was our highest revenue quarter since 2018.
The COVID-19 pandemic had a significant impact on revenue in the past year.
We believe those effects are subsiding, although risks and uncertainties remain.
Expenses increased 3% for the quarter from the prior year due to a 31% increase in SG&A, partially offset by an 8% decrease in R&D.
The increase in SG&A was due to increased employee compensation expense.
The decrease in R&D expense was due to staffing changes and the completion of some new product developments.
Interest income decreased to $290000 for the most recent quarter from 399000.
In the prior year quarter due to decreases in our available for sale of Securities and a decrease in the average interest rates on those securities.
Net income for the quarter was 3 point of $5.8 million or <unk> 74 cents per diluted share compared to $2.41 million or 50 cents last year.
Gross margin decreased to 75% versus 82 per cent for the prior year quarter due to revenue mix and net margin was the solid 50 per cent.
We pay the 1 dollar per share dividend in the past quarter and today, we announced that our board declared another quarterly dividend of $1 per share payable August 31 to shareholders of record as of August 2nd.
Now I'll turn the call back Dan to cover the business Dan.
Thanks, Curt I'll cover business and marketing.
We continue to manage the challenges and opportunities presented by global semiconductor shortages. Some of said shortages because of the last several more years raw material and packaging service lead times of increased and prices of many raw materials of increased we've address these threats by increasing inventories at all stay.
<unk> and increasing our production capacity to support converting that inventory to finished goods.
We've increased some prices, where we've had to because of higher material and labor costs for other parts, we've been able to keep our price is the same while improving our competitive position.
The shortages of created opportunities to provide products, where we have drop in replacements for competitors, particularly couplers.
We've won some business because we of parts available and we hope to keep that business by demonstrating more reliable supplier with excellent product performance and quality.
Our advanced technology team continues to work on new and improved tunneling Magneto resistance or TMR sensors, which have more signal and use less power than conventional sensors.
This is especially important for automotive current sensors, which are a key element of our long term growth strategy.
Our advanced technology team also worked on spend tronic memory or M Ram under a customer sponsored R&D contract for custom parts.
<unk> is 1 of our core technologies, we manufacturer M Rams for specialized applications, such as anti tamper and these programs allow us to build our technology capabilities.
Turning to sales and marketing most of in person industry trade shows were canceled or were virtual in the past quarter, but 1 of our distributors participating in the small in person exhibition in late June in Northern Italy.
We hope there will be more in person exhibitions.
Surplus cash is an important industry trade show, it's normally held in Germany, but took place virtually in the past quarter.
It's billed as the industry's largest event dedicated to sensors connectivity and systems.
We participated as a co exhibitor with the angst and Pfister 1 of our European distributors.
We had several new products at the virtual booth and Webinars after the exhibition.
In the past quarter, we presented our couplers that of webinar on Silicon carbide power control of hosted by angst and Pfister.
Silicon carbide transistors are leading edge devices that are ideal for power control because they are faster and have less energy loss in older Silicon transistors.
Our couplers are ideal for transmitting signals to these transistors because they are best in class isolation and common mode transient immunity isolation enhances reliability by protecting the allocated electronics in harsh environments like electric cars.
And common mode transient immunity allows the circuitry to switch faster and therefore operate more efficiently.
A major industry Research conference of the eye Tripoli International Magnetics conference or interim egg for short was held virtually in the past quarter. Originally scheduled to be held in the Leon France. The conference was held virtually due to the pandemic.
5 of our researchers authored the paper titled magnetic viscosity and high precision Magneto resistive field sensors at the <unk> conference.
Overcoming magnetic viscosity to improve the accuracy and precision as an example of our leadership in sensor technology.
Joe Davies senior physicist and program manager was also the sensor expert on a panel of experts.
Although we're taking advantage of virtual events, we look forward to the return of in person exhibits this quarter.
Sensors Expo build as north America's largest event dedicated to sensors connectivity in the Internet of things has been postponed several times, but it is still scheduled for September in San Jose, We plan to exhibit and our folks that are champing at the bit to get in front of customers.
We lost attendant sensors Expo 2 years ago, and promoted our new smart angle sensors with the smart sensor based robotic xylophone, playing do you know the way the San Jose.
We've expanded our smart sensor line since the last sensors Expo, but we plan to reprise the popular demo.
There is a video of the 2019 robotics Isle of phone on our Youtube channel.
Our annual shareholders' meeting will be held the August 5th via telephone.
I have to note with sadness the passing of 2 members of the N. The family the past quarter.
Both of whom some of you will remember from our in person annual meetings.
Catherine Herman who coordinated at our annual meetings and greeted shareholders as they arrived.
The way unexpectedly in May.
She worked to hear more than 23 years and handle the variety of accounting Investor Relations and human resource functions. She is deeply missed.
We also lost form of director of Robert H, Irish and May Bob was on our board for 22 years from 1992 until he retired in 2014.
In addition to serving on our board who was the consultant of the company until 2003.
He was the dedicated director with a big personality.
The first annual meeting agenda item is election of directors, Gary Maharaj isn't standing for reelection Garry joined our board in 2014, when Bob Irish retired.
He has provided strong oversight oversight and valuable advice and of 7 years on our board. We appreciate the service.
Gary will be of concentrating on his day job of CEO of <unk> incorporated and we wish them continued success.
We are pleased to have been able to nominate the Dr. James W. Bracket, the replace Gary on our board.
Jim is an accomplished executive and highly experienced public company director. He was CEO of life core of biomedical from more than 20 years. His management technical of medical device and public company experience and his medical education qualify him to serve as a director.
After voting for directors. The second annual meeting agenda item is approval of officer compensation as detailed in our proxy we don't pay of overpay. Our officers our officers have the same fringe benefits as all employees and there are no executive perks of Golden parachutes.
The third annual meeting agenda item is ratification of our auditors Boule P. L. L. P. As our auditors for this fiscal year of the year ending March 31.2022.
The lay audited our of past 2 fiscal years and we recommend the approval for our next audit.
Popular feature of our in person annual meetings was live hands on product demonstrations.
Instead of that this year, there's a play list called 2021 annual meeting demonstrations highlighting recent sensor coupler in internet of things innovations. The playlist is up now on our Youtube channel and there is a link on our investor events page.
We look forward to returning to in person annual meetings next year.
Now I'd like to open the call for questions Jonathan.
Certainly ladies and gentlemen, if you have a question at this time. Please press Star then 1 on your Touchtone telephone. If your question has been answered and you'd like to remove yourself from the queue. Please press the pound key.
And we have a question from the line of Jeff Bernstein from Cowen Your question. Please.
Hey, guys.
Nice quarter.
It was a very strong sequentially and year to year and I think that you had hoped that last quarter would have had a little bit of of bounce back. So did we sort of get 2 quarters worth of bounce back in this quarter or can you just characterize a little bit.
The more of a.
Where the strength came from in the quarter.
Sure Jeff.
Well the sales increased across the board in most of our our markets and the product lines.
Couple of sales were especially strong in the past quarter.
And we believe we're better positioned in these times of shortages than the.
Some traditional semiconductor competitors we have.
The overall worldwide semiconductor market.
Is strong and.
The effects of the pandemic on revenue.
<unk> to be subsiding.
The impact of the pandemic on elective medical devices also appears to be recovering.
Based on the orders are forecasts and what we've been hearing we currently expect a strong year over year growth.
This quarter of the quarter ending September 30th.
2021.
Great that's great and so there wasn't any large customer that was a significant factor.
Or anything like that.
No. It was really across the board some markets were stronger than others, but it wasn't really an across the board increase.
That's great.
And.
You mentioned that you believe you had some wins, where you had dropped in products I guess that was in couple of others.
And so customers of competitors.
Couldn't get product, we're able to the source product from new essentially of that.
The size of it.
Yes, we do believe we saw some of that in the in the recent quarter.
Gotcha.
And is that kind of activity.
Or are you still seeing opportunities like that.
Yeah, we've continued to see.
Opportunities.
We continue just you see of very strong demand, particularly with the couplers.
Gotcha, Okay, that's great.
And then I wanted to ask about the Isolator business, you guys mentioned, the angst and sister work with the the Silicon carbide.
<unk> and related products and there was the Texas instruments put out of the thing about a webinar on using their eyes. The letters can be a certain I think it was.
RF admission standards or I guess the.
The Federal Communications Commission or something and I think your products are sort of.
Naturally the don't caused those problems, but what can you just talk a little bit about that.
Yes, Jeff this is Dan.
So cisler 32 of which I think is what you're referring to those are radio frequency noise limits, which is as you as you correctly pointed out that's an area, where it's been tronic isolator have significant advantages over semiconductor isolate or as like you you mentioned, Texas instruments.
So we don't have to have webinars on how to mitigate mitigate that noise because we don't have the noise.
The electron spin is inherently persistent or devices don't require the radio frequency carriers to create the noise pollution, that's regulated by <unk> 32.
So we are we do see that as an advantage and it's a significant advantage for some of our customers.
The regulatory environment on those sorts of radio frequency noise.
Just throughout.
Our lives. So we don't want them interfering with other electronics, causing other electronics to fail. So that's the reason for these limits and our parts performed very well in those and those sorts of our tests.
Gotcha, and then is it correct to assume that this is a bigger problem in sort of the high speed kinds of applications that come with some of the the compound semiconductors like silicon carbide.
Yes, it tends to be a because of the faster you run the devices. The higher the frequencies are in and then they can transmit.
The better through barriers and things like that so.
So transmitting better as bad when it's noise pollution, when its radio frequency pollution.
Okay, great great and so you know you've talked in the past about how well your positioned for the EV market.
You know I've been reading a lot more recently about a lot of capital going into E V. T O L. A electric vertical takeoff and landings are essentially.
Small drone black helicopters for transporting people and goods it would seem like your.
Your products would be equally if not even better positioned than in a a situation like that where both weight and power of.
Our important parameters.
Yes, exactly so so that's the fascinating area and.
The the advantages that we have of lower power and smaller size, which we get from our core technology of spend tronox.
Our significant advantages in many markets and certainly as you point out it's it's a big advantage in that type of and that type of market the drone market, where the where every little bit of weight is where power is extremely important of course lower power translates into smaller batteries.
And are of devices, particularly our tunneling Magneto resistive devices are especially efficient for power and we have the smallest devices of their type in the industry, we have experience in our space and aviation.
As well as in the medical device markets.
So we are we've gotten pretty good of designing for small size and low power.
And how would you go after a market like that where you know there there's not really any kind of traditional.
The supply chain the those.
Things are just starting out with with all of the you know.
Essentially private startup companies.
Yes, so so we work to reach those folks through through some targeted marketing.
We are working on as you know we have a letter of conformance from the international Automotive Task Force, which is important in some of those emerging sub segments. We have of private label partnership with the company with strong automotive sales channels, which allows us to reach some of those.
<unk> customers.
And then we are we're working to continually get our message out as you know through Webinars and other means to highlight things like lower power and smaller size and to leverage our excellent reputation in the <unk>.
Other markets that require a small size.
Low power.
We are working to try to reach some of those smaller companies that you mentioned, but also some of the companies that make the sub assemblies, what are called the tier 2 and tier 3 suppliers in the automotive industry that might be providing battery management systems or modules for companies that arent going to design that themselves.
That's great. Thank you.
All of them.
Let somebody else ask the question.
Thanks, Jeff.
Thank you and this does conclude the question and answer session of today's program I'd like to hand, the program back to tangible Baker for any further remarks.
Well if there are no. Other questions. We were pleased to report of 41, 48% increase in earnings driven by of 56% increase in revenue.
We look forward to speaking with you again on August 5th for our annual meeting in October to discuss second quarter results. Thank you for participating in the call.
Thank you, ladies and gentlemen for your participation in today's conference. This does conclude the program you may now disconnect good day.