Q4 2023 NVE Corp Earnings Call

May 1, 2024

Okay.

Operator: Good day. Thank you for standing by.

Good day, thank you.

Operator: Welcome to the NVE Corporation conference call on fourth-quarter 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, 1 on your telephone. You will then hear an automatic message advising that your hand is raised. Please note that today's conference is being recorded. I will now hand the conference over to Mr. Dan Baker, President and CEO. Please go ahead, sir.

Speaker Change: We're standing by and welcome to <unk> N V Corporation conference call on fourth quarter results at.

Speaker Change: At this time all participants are in a listen only mode.

Speaker Change: 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 one on your telephone you will then hear an automotive message advising yohan its ways. We smelled of today's conference is being recorded.

Speaker Change: I will now hand, the conference over to Mr. Dan Baker, President and CEO. Please go ahead Sir.

Daniel A. Baker: Good afternoon, and welcome to our conference call for the quarter and fiscal year ended March 31st, 2024. This call is being webcast live and recorded, and a replay will be available through our website, nve.com.

Daniel A. Baker: Good afternoon, and welcome to our conference call for the quarter and fiscal year ended March 31 2020 for.

Daniel A. Baker: This call is being webcast live and recorded a replay will be available through our website <unk> dot com.

Daniel A. Baker: I'm joined by Controller and Principal Financial Officer Daniel Nelson. After my opening comments, Daniel will present our financial results, I'll cover products and marketing, and we'll open the call to questions. We issued our press release with financial results and filed our annual report on Form 10-K in the past hour following the close of MARC. Links to the press release and the 10-K are available through the SEC's website, our website, and on X, formerly known as Twitter.

Daniel A. Baker: I'm joined by controller and principal financial Officer, Daniel Nelson. After my opening comments, Daniel will present, our financial results I'll cover products and marketing and we'll open the call to questions.

Daniel Nelson: We issued our press release with financial results and filed our annual report on Form 10-K in the past hour following the close of market.

Daniel Nelson: Links to the press release and 10-K are available through the Sec's website, our website and on the ex formerly known as Twitter.

Daniel A. Baker: Comments we may make that 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 uncertainties related to the economic environments and the industries we serve and risks and uncertainties related to future sales and revenue, as well as the risk factors listed from time to time in our filings with the SEC, including our recently-filed annual report on Form 10-K. Actual results could differ materially We may We're pleased to report strong earnings despite a decrease in revenue from a record-shattering quarter a year ago. Daniel Nelson will cover the details of our financials. Daniel?

Daniel Nelson: Comments, we may make that 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 uncertainties related to the economic environments in the industries, we serve and risks and uncertainties related to future sales and revenue as well as the risk factors.

Daniel Nelson: Listed from time to time in our filings with the SEC <unk>.

Daniel Nelson: Including our just filed annual report on Form 10-K.

Daniel Nelson: Actual results could differ materially from the information provided and we undertake no obligation to update forward looking statements we may make.

Daniel Nelson: We're pleased to report strong earnings despite a decrease in revenue from our record shattering quarter a year ago.

Daniel Nelson: Daniel Nelson will cover the details of our financials Daniel.

Daniel Nelson: Thanks, Dan.

Daniel Nelson: The total record for water on the 3rd of March, 2021 decreased 45% compared to our record prior year quarter. The decrease was due to a 43% decrease in product sales and an 88% decrease in contract research and development revenue, with a tough comparison. The decrease in product sales was primarily due to a semiconductor industry downturn. The good news is that the industry is gaining strength, and forecasts are for a strong industry recovery in calendar 2024. World Semiconductor Trade Statistics is forecasting the global semiconductor market to grow 13% in 2024 after plummeting 8% in 2023.

Daniel Nelson: Total revenue.

Daniel Nelson: 21 of core increased 45% compared to a record prior year quarter. The decrease was due to a 43% decrease in product sales and an 88% decrease in contract research and development revenue with a tough comparison the decrease in product sales was primarily.

Daniel Nelson: Due to CMI towards semiconductor industry downturn. The good news is that the industry is gaining strength and forecasts are for a strong industry recovery in calendar 2024, or semiconductor trade statistics is forecast in the global semiconductor market to grow with 13% in 2020.

Daniel Nelson: After plummets and 8% in 2023.

Daniel Nelson: Our product sales for the most recent quarter increased 11% sequentially from the immediately prior quarter, as we expect. Our product sales to the defense market recovered in the past quarter. These sales can fluctuate, and we're especially weak in the first three quarters of the fiscal year due to procurement cycle timing.

Daniel Nelson: Our product sales to the most recent quarter increased.

Daniel Nelson: Our product sales for the most recent quarter increased 11% sequentially from the immediately prior quarter as we expect as we expected our.

Daniel Nelson: Our product sales to the defense market recovered in the past quarter.

Daniel Nelson: These sales can fluctuate and were especially weak in the first three quarters of fiscal of the fiscal year due to procurement cycle timing.

Daniel Nelson: Total expenses decreased 6% for the fourth quarter of fiscal 2024 compared to the fourth quarter of fiscal 2023 due to a 37% decrease in SG&A, partially offset by a 33% increase in R&D. The decrease in R&D expenses was primarily due to an increase in new product development. The decrease in SG&A was primarily due to decreased performance-based compensation accrual. Interest income for the fourth quarter of fiscal 2024 increased 25% due to a higher interest rate.

Daniel Nelson: The decrease in R&D expense was primarily due to an increase in new product development. The decrease in SG&A was primarily due to decreased performance based compensation accruals.

Daniel Nelson: Interest income for the fourth quarter of fiscal 2024 increased 25% due to higher interest rates.

Daniel Nelson: Our effective tax rate, which is the provision for income taxes as a percentage of income before taxes, increased to 17% for the fourth quarter of fiscal 2024 compared to 12% for the fourth quarter of fiscal 2023.

Daniel Nelson: Our effective tax rate, which is the provision for income taxes as a percentage of income before taxes increased to 17% for the fourth quarter of fiscal 2024 compared to 12% for the fourth quarter of fiscal 2023.

Daniel Nelson: The lower rate in the prior year quarter was primarily due to the CHIPS Act federal tax credits related to the expansion of our production space and new production equipment deployed in the prior year quarter. The 54% decrease in net income for the fourth quarter of fiscal 2024 compared to the prior year quarter was primarily due to decreased revenue and a higher effective tax rate, partially offset by increased interest income and decreased expenses.

Daniel Nelson: The lower rate in the prior year quarter was primarily due to the chips Act federal tax credits related to the expansion of our production space and new production equipment deployed in the prior year quarter.

Daniel Nelson: The 54% decrease in net income for the fourth quarter of fiscal 2024 compared to the prior year quarter was primarily due to decreased revenue and a higher effective tax rate, partially offset by increased interest income and decreased expenses.

Daniel Nelson: It was a solidly profitable quarter with earnings up seven to nine cents per share.

Daniel Nelson: It was a solidly profitable quarter with earnings of 79 cents per share. High-value products allowed us to weather the industry downturn. Gross margin was 75%, and net margin was 54%. For the fiscal year, revenue decreased 22%, primarily due to decreased product sales. Net income was $17.1 million for fiscal 2024, and operating cash flows was $18.2 million for fiscal 2024. Net income was down 25%, but it was still a solid $3.54 per share.

Daniel Nelson: High value products have allowed us to weather the industry downturn gross margin was 75% and net margin was 54% for the fiscal year revenue decreased 22%, primarily due to decreased product sales.

Daniel Nelson: Net income was $17 1 million for fiscal 2024, and operating cash flows was $18 2 million for fiscal 2024, net income was down 25% still a solid $3.54 per share.

Daniel Nelson: Purchases of fixed assets were only $17,000 last fiscal year, but we hope to deploy over $200,000 in equipment this quarter, the June quarter. We're planning $4 to $5 million in capital investment in the next two fiscal years, fiscal 2025 and 2021. And we've already made some equipment down payments this quarter, the first quarter of fiscal 2025. This will represent some of our largest capital investments ever. Then we'll provide details of the plan expansion in a few minutes. Now, I'll turn the call back over to Dan Baker to cover the business. It's over to you, Dan.

Daniel Nelson: Purchases of fixed assets were only 17000 last fiscal year, but we hope to deploy over $200000 in equipment this quarter the June quarter.

Daniel Nelson: We're planning $4 million to $5 million in capital investment in the next two fiscal years fiscal 2025, and 2026 and we've already made some equipment down payments this quarter, the first quarter of fiscal 2025.

Daniel Nelson: This will represent some of our largest capital investments ever Dan will provide details of the planned expansion in a few minutes now I'll turn the call back over to Dan Baker to cover the business overview again.

Daniel A. Baker: Thanks, Daniel. I'll cover product marketing and CapEx. In the past quarter, we expanded our line of tunneling magnetoresistance magnetometers. The new version expands the range of magnetic fields we cover, which opens more potential applications in the industrial Internet of Things and other areas.

Daniel A. Baker: Thanks, Daniel I'll cover products marketing and Capex.

Daniel A. Baker: In the past quarter, we expanded our line of tunneling Magneto resistance magnetometers, the new version expands the range of magnetic fields, we cover which opens more potential applications in the industrial internet of things and other areas.

Daniel A. Baker: We've had a major initiative to broaden our lines of product evaluation boards. These boards promote our products and allow prospective customers to easily try out our unique products. There are several recent videos on our website and YouTube channel that highlight the new board.

Daniel A. Baker: There are several recent videos on our website and Youtube channel that highlight the new boards.

Daniel A. Baker: The board serve as both products and marketing vehicles.

Daniel A. Baker: The boards serve as both products and marketing. On marketing, we're planning to exhibit at two major trade shows this quarter, including the SensorPlus Test Show, which is billed as the leading international trade fair for sensing, measuring, and testing technology. The show is in June in Nuremberg, Germany.

Daniel A. Baker: On marketing, we're planning exhibited two major trade shows this quarter, including the sensor plus test show, which is billed as the leading international trade fair for sensing measuring and testing technology.

Daniel A. Baker: The show is in June in Nuremberg, Germany, we've typically relied on distributors to represent us at international trade shows.

Daniel A. Baker: We've typically relied on distributors to represent us at international trade shows, but this year, we'll also have our own booth, which will give us more space to promote our product later in June. We will be at Sensors Converge in Silicon Valley, which is billed as North America's largest electronics event. We believe these investments and trade shows will pay off in future sales. Daniel mentioned plans for a multi-million dollar expansion over the next two fiscal years.

Daniel A. Baker: This year, we will also have our own booth, which will give us more space to promote our products.

Daniel A. Baker: Later in June we will be at sensors converge in Silicon Valley, which is billed as north America's largest electronics event.

Daniel A. Baker: We believe these investments and chose will pay off in future sales.

Daniel A. Baker: Daniel mentioned plans for a multimillion dollar expansion during the next two fiscal years.

Daniel A. Baker: The investments will increase our capacity and capabilities, including the capability to manufacture wafer-level chip-scale packages in-house. These parts will be smaller and higher performing, and allow us to be more self-sufficient and capture more value. Most of our products are currently packaged in Asia by outsourced semiconductor assembly and test, or OSAT, subcontractors, using conventional plastic overmold. Wafer-level chip-scale parts can be even smaller than these encapsulated components

Daniel A. Baker: The investments will increase our capacity and capabilities, including the capability to manufacture wafer level chip scale packages in house.

Daniel A. Baker: These parts will be smaller higher performance and allow us to be more self sufficient and capture more value.

Daniel A. Baker: Most of our products are currently packaged in Asia by outsourced semiconductor Assembly and test our OS at sub contractors.

Daniel A. Baker: Using conventional plastic over molding.

Daniel A. Baker: Wafer level chip scale parts can be even smaller than these encapsulated components.

Daniel A. Baker: We provided customers with wafer level chip scale prototypes and there has been solid customer interest.

Daniel A. Baker: We've provided customers with wafer-level chip scale prototypes, and there has been solid customer interest. We hope to begin some production this fiscal year. The planned investments will also reduce our supply chain. The COVID-19 pandemic exposed the vulnerabilities of the OSAT supply chain. There have been shortages of raw materials, which OSATs need for their processes. OSATs have also had government lockdown restrictions, labor shortages, and raw materials.

Daniel A. Baker: We hope to begin some production this fiscal year.

Daniel A. Baker: The planned investments will also reduce our supply chain risks.

Daniel A. Baker: The COVID-19 pandemic expose the vulnerabilities of the OS at supply chain.

Daniel A. Baker: There have been shortages of raw materials outside its need for their processes.

Daniel A. Baker: <unk> also had government lockdown restrictions labor shortages and raw material shortages.

Daniel A. Baker: Okay.

Daniel A. Baker: As we begin fiscal 2025, I'd like to review some highlights of fiscal 2024. We extended our Abbott partnering agreement. We supported a number of distributor exhibitions and exhibited under our own banner. We introduced extended-temperature isolated network transceivers and ultra-high-isolation data coupling. We earned the prestigious CE mark for our line of the world's smallest DC to DC converter products and related power conversion products. We launched more products combining data couplers with isolated DC-to-DC converters to transmit power as well as data.

Daniel A. Baker: As we begin fiscal 2025 I'd like to review some highlights of fiscal 2024.

Daniel A. Baker: We extended our Abbott partnering agreement we.

Daniel A. Baker: We supported a number of distributor exhibitions and exhibited under our own banner.

Daniel A. Baker: We introduced extended temperature isolated network Transceivers and ultra high isolation data couplers.

Daniel A. Baker: We earned the prestigious CE Mark for our line of the world's smallest DC to DC converter products and related power conversion products.

Daniel A. Baker: We launched more products, combining data couplers with isolated DC to DC converters to transmit power as well as data.

Daniel A. Baker: We also invested in R&D initiatives with the potential to drive future growth.

Daniel A. Baker: We also invested in R&D initiatives with the potential to drive future growth. Medium-term development programs in the past year included next-generation MRAM for anti-tamper applications. Next Generation Sensors for Hearing Aids and Implanted Medical Devices, extremely sensitive TMR sensors, and wafer-level chip scales. Long-term programs included technology that could provide the energy efficiency needed to accelerate the use of magnetic tunnel junctions in memory, logic, and neuromorphic computing. Highlights of this research were published in the past year, and a link to the paper is on our website. Now I'd like to open the call for questions, Livia.

Daniel A. Baker: Medium term development programs in the past year included next generation M Ram for anti tamper applications.

Daniel A. Baker: Next generation sensors for hearing AIDS and implanted medical devices.

Daniel A. Baker: Extremely sensitive TMR sensors.

Daniel A. Baker: And wafer level chip scale sensors.

Daniel A. Baker: Long term programs included technology that could provide the energy efficiency needed to accelerate the use of magnetic tunnel junctions in memory.

Daniel A. Baker: Logic and neuromorphic computing.

Daniel A. Baker: Highlights of this research were published in the past year and a link to the paper is on our website.

Daniel A. Baker: Now I'd like to open the call for questions Livia.

Operator: Ladies and gentlemen, if you have a question at this time, you will need to press star 11 on your telephone and wait for your name to be announced. To withdraw your question, simply press star 11 again. Please stand by while we compile the Q&A list. And we have a question coming from the line of Jeffrey Bernstein with Zuckerberg Bernstein Capital Management. Your line is open.

Livia: Thank you ladies and gentlemen, if you have a question at this time you will need to press star one on your telephone and lately and name to be announced.

Livia: A question simply press Star one again.

Speaker Change: Please standby, while we compile the Q&A roster.

Livia: And we have a question coming from the line of Jeffrey Bernstein with Sandburg Brinci Capital Management. Your line is open.

Jeffrey Bernstein: Hi, guys.

Jeffrey Bernstein: So, big announcement here. I tend to think of you, Dan, as a conservative guy, and I think, you know, if anyone's had anything to complain about over the years with the company, it's been that maybe you weren't spending enough money to grow revenue, as opposed to being incredibly profitable. So here I see in the quarter, you know, R&D as a percentage of revenue is up, SG&A is up, and you're planning a big capital plan.

Jeffrey Bernstein: Hi, Jim.

Jeffrey Bernstein: So big announcement here.

Jeffrey Bernstein: I tend to think of you Dan is that a conservative guy.

Jeffrey Bernstein: I think.

Jeffrey Bernstein: If anyone's had anything to complain about over the years with the company. It's been that maybe you werent spending enough money.

Jeffrey Bernstein: To grow the revenue.

Jeffrey Bernstein: As opposed to being incredibly profitable.

Jeffrey Bernstein: And so I just get the feeling that that's not done willy-nilly, that you must be having some pretty strong indications that there's demand out there for this capacity and capability you're going to be adding. So can you just give us a little bit more color on that, on, you know, what you have in terms of commitment or interest levels that got you and the board to be willing to make these commitments?

Jeffrey Bernstein: So here I see in the quarter the R&D as a percentage of revenue is up SG&A is up and Youre planning.

Jeffrey Bernstein: Big.

Jeffrey Bernstein: Capital plan.

Jeffrey Bernstein: And so I just get the feeling that that's not done Willy nilly.

Jeffrey Bernstein: You must be having some pretty strong indications.

Jeffrey Bernstein: There is that there is demand out there for for this capacity.

Jeffrey Bernstein: And capability Youre going to be adding so so can you just give us a little bit more color on that.

Jeffrey Bernstein: What you have.

Jeffrey Bernstein: In terms of.

Jeffrey Bernstein: Our commitment or interest levels that.

Jeffrey Bernstein: Got you and the board to be willing to make these commitments.

Daniel A. Baker: Right. Well, thanks, Jeff.

Speaker Change: Alright, well thanks.

Speaker Change: Thanks, Jeff and.

Speaker Change: As you say.

Speaker Change: We are.

Speaker Change: We try to make sure that when we spend our shareholders' money that it's going to get a return for them.

Daniel A. Baker: And as you say, we try to make sure that when we spend our shareholders' money, it's going to get a return for them. And we treat that obligation seriously, and we hold investments to a high standard. But we're excited about this capital investment with this expansion and the opportunities that it presents. We really see them as historic opportunities to dramatically improve our capabilities and to make our products smaller and more sensitive and to extend our advantages. And so that's the reason for the large investment.

Speaker Change: And we treat that obligation seriously and we hold investments two to a high standard, but we're excited about this capital investment with this expansion.

Speaker Change: And the opportunities that it presents we really see them as historic opportunities to dramatically improve our capabilities and to make our products smaller and more sensitive and to extend our advantages and so that's the reason for the large investment.

Speaker Change: What we talked about was the one of the major things that the investment will give us the capability to do wafer level chip scale packages, which I talked about a bit in the prepared remarks. So these are significantly smaller than our current products and our current products are significantly smaller than most conventional electronics so it'll be.

Daniel A. Baker: What we talked about was one of the major things that the investment will give us is the capability to do wafer-level chip-scale packages, which I talked about a bit in the prepared remarks. So these are significantly smaller than our current products, and our current products are significantly smaller than most conventional electronics. So it'll be a dramatic step forward.

Speaker Change: Dramatic step forward the miniaturization is important and another a number of markets.

Daniel A. Baker: Miniaturization is important in a number of markets. Obviously, in implanted medical devices, smaller is better. It allows for smaller devices, smaller incisions, and less risk of complications.

Speaker Change: Obviously, an implanted medical devices smaller is better it allows for smaller devices smaller incisions less risks of complications.

Daniel A. Baker: And it will allow more precise industrial sensors as well because they're smaller. So that's one of the areas that we're investing in. As I mentioned again in the prepared remarks, we've been able, our team has been able to make prototypes of those devices, and we've shared them with customers, and the interest has been very strong. So that's part of the two sets of investments that you mentioned. You mentioned the planned capital investments, which are the production equipment to make these sorts of next-generation devices.

Speaker Change: And it will allow more precise industrial sensors as well because they are smaller so that's one of the areas.

Speaker Change: That we're investing in as I mentioned again in the prepared remarks, we've been able to our team has been able to make prototypes of those devices and we've shared them with customers and the interest has been has been very strong. So that's part of the you mentioned too.

Daniel A. Baker: And you mentioned the R&D investment, which is the ingenious folks who are working on developing the process and capabilities to make these parts and make these prototypes. So you're right. We are seeing some historic opportunities, and we're willing to invest in them, and our board has been very supportive.

Speaker Change: Sets of investments you mentioned the planned capital investments, which is the production equipment to make these sorts of next generation devices and you mentioned the R&D investment which is the.

Speaker Change: The ingenious folks who are working on developing the process and capabilities to make these parts and to make these prototypes. So youre right. We are seeing some historic opportunities and.

Speaker Change: We're willing to invest in it and our board has been very supportive.

Jeffrey Bernstein: Gotcha. And then, Dan, are you delivering anything that's in a chip scale package of this nature today for current customers, and now you want to do it internally, or is this going to be brand new?

Speaker Change: Gotcha, and then Dan are you delivering anything thats in a skip a chip scale package of this nature.

Daniel A. Baker: Today for current customers and now you want to do it internally or is this going to be brand new.

Daniel A. Baker: Primarily this will be brand new Jeff we are delivering prototypes, but we're not currently in production. What we're doing now is relatively small scale.

Daniel A. Baker: Primarily, this will be brand new, Jeff. We are delivering prototypes, but we're not currently in production. What we're doing now is relatively small scale, and it allows us to test parts and to get samples to our customers for evaluation and to develop the market. As I said, our goal is to be in production later this fiscal year, and so that will mean getting the equipment in, getting the processes developed, and getting a variety of production processes up and running. It'll mean some expansion of the building and some repurposing of some of the space that we have now.

Daniel A. Baker: And it allows us to get sample to test parts and to get samples to our customers for evaluation and to develop the market as I said.

Speaker Change: Our goal is to be in production later.

Speaker Change: This fiscal year.

Speaker Change: And so that will mean getting the equipment in getting the processes developed.

Speaker Change: And getting.

Speaker Change: Getting a variety of production.

Speaker Change: <unk> is up and running and it will mean some expansion in the building and some repurposing of some of the space that we have now.

Jeffrey Bernstein: Gotcha. And is there any relationship between this investment and new relationships that were established, you know, as a result of the COVID semiconductor shortages, and you're getting in front of, you know, more customers who really just had to find better and other sources of supply?

Speaker Change: Got you and is there any relationship between this investment and new relationships that were.

Speaker Change: Established.

Speaker Change: As a result of the.

Speaker Change: Covid semiconductor shortages and youre getting in front of you.

Speaker Change: More customers, who really just had to find better and other sources of supply.

Speaker Change: They are related Jeff you're absolutely right, we have customers who are interested in this and then also one of the things that the pandemic highlighted was the risks of the supply chain.

Daniel A. Baker: They are related, Jeff. You're absolutely right. We have customers who are interested in this. And also, one of the things that the pandemic highlighted was the risks in the supply chain. The supply chain risks that we face and that were highlighted during the pandemic for encapsulated parts. So, like most companies in the semiconductor industry, the encapsulation or packaging is done in Asia by OSATs or contractors, subcontractors, and that exposes a significant vulnerability in the supply chain for these types of parts.

Speaker Change: The supply chain risks that we face and that were highlighted during the pandemic for encapsulated parts. So like most companies in the semiconductor industry. The encapsulation or packaging is done in Asia by <unk> or contractors subcontractors.

Speaker Change: And that exposed a significant.

Speaker Change: Vulnerability in the supply chain.

Speaker Change: For these types of parts. So we had customers wanting us to onshore and to bring processes in house to encourage us to do that.

Daniel A. Baker: So we had customers wanting us to go onshore and to bring processes in-house to encourage us to do that. And so some of these investments are in response to that kind of customer interest and feedback that we got during the pandemic and the Chippagetan shortage.

Speaker Change: So some of these investments are a response to those that kind of customer interest and feedback that we got during the pandemic and the chip again shortages.

Jeffrey Bernstein: Gotcha. Okay. And lastly, in the K, and you mentioned on the call here some of the new, you know, product development initiatives; I was curious to see you mentioned in the K some even higher power isolators and just kind of wondering what the application is there. I think previously you had the capability to work with things like, you know, silicon carbide modules and GAN and some of the new really higher power compound semis out there, but what's happening in that higher power domain?

Speaker Change: Gotcha Okay.

Speaker Change: And.

Speaker Change: Lastly, in the K and you mentioned on the call here some of the new <unk>.

Speaker Change: Product development and.

Speaker Change: Initiatives.

Speaker Change: Curious to see you mentioned in the K.

Speaker Change: Some even higher power.

Speaker Change: Isolator.

Speaker Change: And.

Speaker Change: Just kind of wondering what the application is there I think previously you had the capability.

Speaker Change: To work with things like.

Speaker Change: Silicon carbide modules in Gan.

Speaker Change: And some of the <unk>.

Speaker Change: Do really higher power compound semi out.

Speaker Change: There, but what's happening in that higher power demand.

Daniel A. Baker: Well, that's a very exciting area because there is so much interest in power conversion and more efficient power conversion. So, as you know and as you pointed out, our devices are uniquely situated to drive some of these wideband gaps, transistor switches that are now becoming available that switch at higher and higher voltages and higher and higher powers. So higher voltages generally mean more efficiency, and higher power allows larger and larger motors and systems to be controlled.

Speaker Change: Well, that's a very exciting area because there's so much interest in power conversion of more efficient power conversion. So as you as you know and as you pointed out our devices are uniquely situated to drive some of these wideband gap.

Speaker Change: Transistor switches that are.

Speaker Change: That are now becoming available that switch at higher and higher voltages and higher and higher powers. So the higher voltages generally mean more efficiency.

Speaker Change: And the higher power allows larger and larger motors and systems to be controlled so we see applications in electric vehicles in alternative energy and clean energy conversion and power storage. So that's an area that we see as providing excellent grow.

Daniel A. Baker: So we see applications in electric vehicles, in alternative energy and clean energy conversion, and power storage. So that's an area that we see as providing excellent growth opportunities, and we're continuing to expand our product line in those areas, as I mentioned in the prepared remarks. We're going to higher and higher voltages that our devices can withstand in order to keep up with the market for those ultra-high efficiency power switches. So we have the highest isolation voltage, which is a key figure of merit in the industry, the highest of its type.

Speaker Change: With opportunities and we're continuing to expand our product line in those areas as I mentioned in the prepared remarks.

Speaker Change: We're going to higher and higher voltages that our devices can withstand.

Speaker Change: In order to keep up with the market for those ultra high efficiency power switches. So we have the highest.

Daniel A. Baker: And we also have the highest switching speed, capability with, sometimes called CMTI or common mode transient immunity, which is another figure of merit. So we have the best devices in the industry in a market that's growing rapidly and that is demanding more and more efficient power.

Speaker Change: Isolation voltage, which is a key figure of merit in the industry highest in there of their type and we also have the highest switching speed.

Speaker Change: <unk> ability with sometimes called <unk> or common mode transient immunity, which is another figure of merit. So we have the best devices in the industry in a market that's growing rapidly and that is demanding more and more efficient power switching.

Speaker Change: Gotcha, Okay, and then just we've talked about in the past.

Jeffrey Bernstein: Gotcha, okay. And then just, you know, we've talked about in the past the challenges of engaging with folks like the auto manufacturers and the major OEMs there, et cetera. Sounds like, you know, some of these parts would be appropriate for more industrial kinds of applications and, you know, electricity transmission and storage and those kinds of things where maybe the ability for you guys to market might be easier. Can you just talk about that a little bit?

Speaker Change: The challenge is of engaging with folks like the auto manufacturers.

Speaker Change: And the major Oems, there et cetera.

Speaker Change: Sounds like.

Speaker Change: Some of these parts would be appropriate for.

Speaker Change: More industrial.

Speaker Change: Ziv applications.

Speaker Change: Electricity transmission and storage and those kinds of things, where maybe the ability for you guys to market Mike might be easier.

Speaker Change: Can you just talk to that a little bit.

Daniel A. Baker: Exactly so. We have cautioned that the automotive market can take a while to develop, but it remains an area that we're focusing on. But nearer term, we're expanding our DC-to-DC power conversion product lines, which we talked about, and those have potential in solar and energy storage markets, and wind power conversion. Those are important, fast-growing markets. So we see a broad range of opportunities for these products; automotive and clean energy are two of the most important. Great, thanks very much for your time.

Speaker Change: So.

Speaker Change: We have caution that automotive markets can take a while to develop but it remains an area that we're focusing on.

Speaker Change: But nearer term, we're expanding our DC to DC power conversion product lines, which we talked about and those have potential in solar and energy storage markets.

Speaker Change: Wind power conversion.

Speaker Change: Those are important fast growing markets. So we see a broad range of opportunities for these products automotive and.

Speaker Change: And clean energy are two of the most important.

Jeffrey Bernstein: Thanks very much for your time. I'll let someone else ask some questions. Thanks, Jeff.

Speaker Change: Great. Thanks, very much for the time I'll, let someone else ask some questions.

Speaker Change: Thanks, Jeff.

Operator: And as a reminder, if you have a question, please press star 11. And I see no further questions in the queue at this time. I'll turn the conference call back to you, Mr. Baker, for any closing remarks.

Speaker Change: And Sir My next question. Please press Star one line.

Speaker Change: And I see no further questions in the queue at this time I'll turn the conference call back to you Mr. Baker for any closing remarks.

Daniel A. Baker: Well. Thank you everyone. We were pleased to report strong earnings for the quarter. We were pleased to talk about our expansion plans and capital investment we are well positioned for an industry recovery. We look forward to speaking with you again at our next earnings call in July to review first quarter, the first quarter of fiscal 2025.

Daniel A. Baker: Well, thank you, everyone. We were pleased to report strong earnings for the quarter. We're pleased to talk about our expansion plans and capital investment. We are well positioned for an industry recovery. We look forward to speaking with you again at our next earnings call in July to review the first quarter, the first quarter of fiscal 2025. Ladies and gentlemen, that does conclude our conference for today. Thank you for your participation, and you may now disconnect.

Operator: Ladies and gentlemen, that does conclude our conference for today. Thank you for your participation, and you may now disconnect.

Speaker Change: Ladies and gentlemen that does now conference for today. Thank you for your participation and you may now disconnect.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: Yeah.

Speaker Change: [music].

Operator: Yes.

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Speaker Change: So.

Operator:

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Speaker Change: Yeah.

Operator: [music].

Operator: Yeah.

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Operator: Okay.

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Operator: [music].

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Q4 2023 NVE Corp Earnings Call

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