NVE Corporation (NASDAQ:NVEC) Q4 2023 Earnings Conference Call May 3, 2023 5:00 PM ET

Company Participants

Dan Baker - President & Chief Executive Officer

Joe Schmitz - Chief Financial Officer

Conference Call Participants

Jeffrey Bernstein - Cowen Prime Advisors

Operator

Good evening and thank you for standing by. Welcome to NVE Conference Call on Fourth Quarter and Fiscal year Results. At this time, all participants are in a listen-only mode. After the speakers' presentation there will be a question-and-answer session. [Operator Instructions] Please be advised, that today's conference is being recorded.

I would like to now hand the conference over to Dan Baker, President and CEO of NVE Corporation.

[Audio Gap]

Dan Baker

Thanks, Dan. As Dan said, revenue and net income for the quarter were the best in our history by far. Total revenue for the most recent quarter increased 91% to $12.8 million from $6.7 million in the prior year quarter.

The increase was due to a 95% increase in product sales and a 10% increase in contract research and development revenue. Gross profit as a percentage of revenue increased to 80% for the fourth quarter of fiscal 2023, compared to 77% for the fourth quarter of fiscal 2022, the increase was primarily due to economies of scale from increased production and increased prices, partially offset by increased material and labor costs.

Total expenses increased 29% for the fourth quarter of fiscal 2023, compared to the fourth quarter of fiscal 2022 due to a 25% decrease in research and development expense and a 204% increase in SG&A expense. The increase in expense, were primarily due to increased staffing and increased compensation.

Interest income for the fourth quarter of fiscal 2023 increased 35% due to an increase in our available for sale securities and an increased in the average interest rate. Our effective tax rate, which is the provision for taxes as a percentage of income before taxes was 12% in the fourth fiscal quarter compared to 16% for the fiscal year, due to CHIPS Act tax credit related to the expansion of our production space and new production equipment deployed in the past quarter and depreciation of those newly deployed production equipment.

Net income for the fourth quarter of fiscal 2023 increased 116% to $8.2 million or $1.70 per diluted share, compared to $3.82 million or $0.79 per share for the prior year quarter. We also set new records for revenue and net income for the fiscal year. Total revenue increased 42% to a record $38.3 million, compared to $27 million in the prior year. The increase was due to a 44% increase in production sales partially offset by a 6% decrease in contract R&D revenue.