NVE (NVEC) Q3 2022 Earnings Call Transcript

NVE (NVEC 0.97%)
Q3 2022 Earnings Call
Jan 19, 2022, 5:00 p.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Thank you for standing by, and welcome to the NVE Corporation third-quarter results conference call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. [Operator instructions] Please be advised that today's conference is being recorded.

[Operator instructions] I would now like to hand the conference over to your host, president and CEO, Dan Baker. Please go ahead.

Dan Baker -- President and Chief Executive Officer

Good afternoon, and welcome to our conference call for the quarter and nine months ended December 31, 2021. This call is being webcast live and being recorded. A replay will be available through our website, nve.com. We issued our press release with third-quarter results and filed our quarterly report on Form 10-Q in the past hour following the close of market.

We also filed a current report on Form 8-K announcing our new CFO, Joe Schmitz, who is on the call. Joe is a seasoned executive who joined us this week to help fulfill our mission of leading a spintronic revolution. Joe, welcome to the call.

Joe Schmitz -- Chief Financial Officer

Thanks, Dan.

Dan Baker -- President and Chief Executive Officer

Also on the call is our vice president of advanced technology, Pete Eames. We'll hear from Pete in a few minutes. Since Joe is new, I'll present the financials, as well as the business review today, Pete will cover new products and R&D, and then we'll open the call to questions. 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 risks and uncertainties related to future sales and revenue, uncertainties related to future stock repurchases and dividend payments, our dependence on critical suppliers and packaging vendors, risks related to renewals of agreements with certain customers 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 subsequent filings.

Links to the documents we filed this afternoon are available through the SEC's website, our website, and our Twitter timeline. The 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 solid earnings despite supply chain disruptions that delayed product shipments. More importantly, we ended the quarter well-positioned with work in process product inventories.

I'll cover some details of the financials. Total revenue for the most recent quarter decreased 4% to $6.29 million from $6.53 million in the prior-year quarter. The decrease was due to a 7% decrease in product sales, partially offset by an 86% increase in contract R&D. Net income for the third quarter of fiscal 2022 decreased 12% to $3.47 million or $0.72 per diluted share, compared to $3.93 million or $0.81 for the prior-year quarter.

We believe the impact of the COVID-19 pandemic on customer demand was significantly less in the quarter and nine months ended December 31, 2021, compared to the prior-year periods. We believe the impact on -- of the pandemic on our supply chain, however, was significantly more in the most recent quarter and nine months than in the prior-year periods. Gross profit margin decreased to 78% in the third quarter of fiscal 2022 from 84% in the third quarter of fiscal 2021, primarily due to product mix, and increased product costs. Like most companies in the semiconductor industry, many of our cost increase, including foundry wafers, chemicals, packaging costs, and labor.

In response to increased costs, we canceled some discounts and increased some prices in the past quarter. More price increases became effective at the start of the calendar year. In the past quarter, we quoted 16-week lead times on most of our parts. Therefore, if we hit our goals, of course, many of the parts where we quoted 16 weeks will be shipped this quarter.

16-week lead times are much longer than before the pandemic or even a few months ago. But according to the most recent monthly market update by one of our distributors, the lead time for parts from one of our traditional semiconductor competitors is 52 to 80 weeks or above. Expenses for the quarter decreased 14% from the prior year due to a 15% decrease in R&D and a 13% decrease in SG&A. The decrease in R&D expense was primarily due to staffing changes and the completion of certain product development activities.

The decrease in SG&A was primarily due to staffing changes. Interest income for the third quarter of fiscal 2022 decreased 22% due to a decrease in our available-for-sale securities and a decrease in the average interest rates on those securities. Net income for the quarter was $3.47 million or $0.72 per diluted share, compared to $3.93 million or $0.81 last year. We continue to generate strong profitability.

Operating margin was 64%, pre-tax margin was 69% and net margin was 55%. For the first nine months of fiscal 2022, total revenue increased 31% to $20.3 million from $15.5 million in the prior year. Product sales increased 31% and contract R&D increased 17%. Net income for the first nine months increased 25% from the prior-year period to $10.7 million or $2.21 per diluted share from $8.56 million or $1.77 per share for the first nine months of fiscal 2021.

Capital expenditures were $58,000 in the first nine months of the fiscal year. We expect that number to increase significantly this quarter, the fourth quarter since we plan to deploy several new test handlers to increase our production test capacity and alleviate potential bottlenecks. We repurposed part of the building to make room for the new equipment. We paid a $1 per share dividend in the past quarter, and today, we announced that our board of directors declared another quarterly dividend of $1 per share, payable February 28 to shareholders of record as of January 31.

Turning to the past quarter's business highlights. Some analysts have said global semiconductor shortages could last several more years. that would pose both medium-term opportunities and threats. We took advantage of some of the opportunities by winning business because we have shorter lead times than traditional semiconductors, and we can keep that business by demonstrating we're a reliable supplier with excellent product performance and quality.

We've addressed the threats posed by the shortages by increasing work in process inventory. We are investing in additional production and test equipment. We expanded our production space. We have invested in tooling and materials for alternate packaging vendors, and we have invested in tooling for onshore foundry wafers.

With these steps, as I discussed in the financial review, although our lead times are longer than they have been, they are much better than industry averages. We're proud to supply products to some of the world's most demanding customers, including Abbott's Pacesetter subsidiary. Abbott is a leading supplier of implantable medical devices. I'm pleased to report that we have reached a tentative agreement to extend our supplier partnering contract with Abbott.

The extension will run through the end of 2022 and will include a price increase in the face of our increased materials and manufacturing costs. We'll file the amendment on a current report on Form 8-K after it's fully executed. There are still some in-person trade shows and conferences. Our Taiwan distributor Caltech International exhibited at Taipei International Industrial Automation Exhibition in December.

Caltech reported turnout was lighter than before the pandemic, but they still had some leads. The joint MMM/Intermag conference, a major conference for magnetics and spintronics was last week. Highlights of our participation are on our website and Twitter timeline. We provided several types of our giant magnetoresistance and tunneling magnetoresistance sensors to student entrants at the conference so they could learn how to use them.

The students came up with some clever applications, including a magnetic flute and a beer level sensor. There are links to videos on our Twitter timeline. Now, I'd like to turn the call over to Pete Eames, our vice president of advanced technology, to cover new products and product development. Pete has been on these calls before.

He's been with NVE since 2003 and has been in his current position since 2017. Pete has a Ph.D. in experimental condensed matter physics from the University of Minnesota. Pete?

Pete Eames -- Vice President of Advanced Technology

Thanks, Dan. I'll cover recent new products and summarize our product development strategy. In the past quarter, we launched our most sensitive sensor ever. The new sensor is a version of our groundbreaking tunneling magnetoresistance or TMR sensors.

High sensitivity means new sensors can detect smaller magnetic fields, which allows more precise position or current sensing for more accurate and efficient electronic controls. A demonstration of our website -- demonstration on our website and YouTube channel shows how the new sensors can precisely detect and position a very small magnet of one-eighth by one-eighth of an inch cylinder and this scale is important for applications requiring precise automation. The new product is a result of advancements in our TMR sensor materials by our advanced technology team. We continue researching even higher sensitivity devices to maintain and extend our leadership in this area.

Applications of high-sensitivity sensors include precise position sensing and biometric monitoring. Despite challenges posed by shortages and long lead times, 2021 was a productive year for product development. In addition to the new sensor I just discussed, we introduced several other new products in the past year, the world's first TMR Gear 2 sensors with thousands of a degree resolution, for ultra-precise motion control and robotics, ultra-low power magnetic switches for medical devices and hearables, and more parts that transmit power, as well as data. Up next, we're working on two near-term advanced smart sensors for the Industrial Internet of Things, an advanced high-sensitivity TMR smart magnetometer and an advanced single smart angle sensor, both we hope to announce these new products soon in this quarter.

Long term, our R&D strategy is in Advanced Materials and sensors for couplers and for sensors for the Internet and the industrial Internet of Things and hybrid electric vehicles and MRAM for anti-tamper niches to build our intellectual property. Our primary enabling technology for advanced products is tunneling magnetoresistance or TMR. We're world leaders in TMR, which is an advanced Spintronic technology. TMR offers higher sensitivity and lower power than traditional semiconductors or even other spintronic technologies.

Dan Baker -- President and Chief Executive Officer

Thanks, Pete. Now we'd like to open the call for questions. Latif?

Questions & Answers:

Operator

Thank you. [Operator instructions] Our first question comes from the line of Jeff Bernstein of Cowen. Your line is open.

Jeff Bernstein -- Cowen Inc. -- Analyst

Hey, guys. Nice to talk to you again, Dan, and nice to meet you, Joe and Pete. So, a couple of questions for you. One, can you give us any kind of order of magnitude of sort of how much business you think you have left on the table in the current quarter because of shipment delays?

Dan Baker -- President and Chief Executive Officer

Yes, it's hard to come up with a number, Jeff, but it was a significant amount of revenue, but the more important thing is that it's been delayed, not lost, by and large. So, we haven't lost those customers. We haven't lost that business, and we've actually picked up quite a bit of business and picked up orders from our competition. So, it was a significant disruption.

And as I mentioned in the prepared remarks, in the first two quarters of the fiscal year, we had inventory. And so, the demand had picked up, and we were uniquely positioned. In the most recent quarter, our inventory had been -- a lot of our inventory had been depleted. And so, we were in a position then where the shortages started to bite.

But they didn't bite us nearly as hard because of the mitigation steps that our folks took and the skill and dedication which our employees put into managing some of these shortages that they haven't affected us as severely as many other companies in the semiconductor industry.

Jeff Bernstein -- Cowen Inc. -- Analyst

Gotcha. So, we can assume that you've built a little visibility as a result of the backup?

Dan Baker -- President and Chief Executive Officer

Yes. We have visibility of orders, and there are challenges in the industry as you well know, but we're taking them on and committed to growth. We're betting on -- we're adding equipment, we're expanding our building because we're expecting to deliver those products that have been delayed.

Jeff Bernstein -- Cowen Inc. -- Analyst

Gotcha. And you referenced redesigns for U.S. Packaging. So, that's, I guess, on your part, redesigning some of your parts to be packaged tier as opposed to overseas and cut down on that logistics time and, I guess, whatever delays there are at packaging facilities overseas.

Is that the takeaway?

Dan Baker -- President and Chief Executive Officer

Exactly. So, we've invested in onshoring, it takes a while, but we're expecting wafers that we used to get from Asia. We're expecting the first wafers on one of our highest volume foundry wafers, the raw materials as early as later this month. So, our team got on that fairly early in the semiconductor shortage crunch.

And we have more wafers on the drawing board that we're redesigning for onshore foundries.

Jeff Bernstein -- Cowen Inc. -- Analyst

Gotcha. OK. And then we've talked in the past that you had some drop in sort of pin-compatible parts that you could compete with some of your peers. And often, I think with better performance.

But has this situation dragged on long enough that people are actually doing some board designs and willing to design in parts that aren't compatible?

Dan Baker -- President and Chief Executive Officer

Yes. Some of them are, and we spend a fair amount of time supporting those customers to point out the differences and to help them through the design process for redesigning their boards. And also, we picked up a significant amount of business of orders for pin-for-pin replacement parts where there are no board designs required and those redesigns, as you can imagine, can go much faster.

Jeff Bernstein -- Cowen Inc. -- Analyst

Gotcha. OK. That's great. And can you touch on what's been going on with Angst+Pfister? And what kind of progress you're making in automotive?

Dan Baker -- President and Chief Executive Officer

Yes. So, automotive remains a target market for us. And in particular, you're referencing Angst+Pfister's so-called BeFAST platform, which is a platform for onboard charging and other power conversion applications, which are fast-growing applications, as you know. So, we continue to work with them and work with some of their end customers on designs, on sampling parts, we are working on even more improved products that will address that market of improving the efficiency of battery charging and other power conversion systems.

So, it's an area that we see as an excellent target market, particularly for our couplers, which can be used then to drive high-speed power switches, so-called MOSFETs in order to convert power from the AC voltages that we would have in a charging system or in our homes to the DC that's required to charge -- recharge an electric vehicle or convert energy to a more efficient motor.

Jeff Bernstein -- Cowen Inc. -- Analyst

Gotcha. And so, these are the ones that are like silicon carbide compatible?

Dan Baker -- President and Chief Executive Officer

Exactly. So, our couplers provide a bridge between electronics and interface between the control electronics and the switches like the silicon carbide or galium-nitride MOSFETs that are doing the switching of the power because those are at high voltages and require high currents, you can't connect those directly to the controller electronics. So, our spintronic couplers solve that problem of being able to signal the MOSFETs to switch without a direct electrical connection.

Jeff Bernstein -- Cowen Inc. -- Analyst

Gotcha. And then I had a question about Abbott -- or a couple of questions about Abbott. So, it sounds like you are extending the current agreement. I think you usually have like five- or six-year agreements.

Is that just because of how things are moving so quickly in the industry or just expand a little bit on what's going on with Abbott?

Dan Baker -- President and Chief Executive Officer

Yes. Well, we've had longer-term extensions with Abbott or their predecessor companies, St. Jude or Pacesetter. But recently, the extensions have been shorter than one year.

So, we do expect to negotiate a longer-term agreement with Abbott. Those things take a little bit of time. But what we're pleased with is that the agreement -- the tentative agreement that I alluded to codifies the price increase. And that's important to us in the face of increasing costs.

Jeff Bernstein -- Cowen Inc. -- Analyst

Yes. OK. That's great. And then I noticed these guys have recently fielded a new electrophysiology cardiac mapping platform.

And it would seem like your sensors would be really appropriate for that kind of product. Were you able to get in to see them on that design cycle? Or is that something to potentially go after in the future?

Pete Eames -- Vice President of Advanced Technology

Right, Jeff. Well, that's an exciting new application that I guess we're not really familiar to all of the inner workings on that particular device, but certainly, some of our low-field sensors are exciting for applications like that. And that's something that we're hopeful will be in that -- those types of markets in the future.

Jeff Bernstein -- Cowen Inc. -- Analyst

Gotcha. And then, Pete, while we have your expertise here. I'm just wondering, I keep reading about various quantum computing kinds of architectures. And I'm wondering if any of your parts are potentially -- potential to be used either in cubits or in some of the error correction and monitoring kinds of applications in any of these different kinds of architectures.

Pete Eames -- Vice President of Advanced Technology

Right, right. Well, that's a real exciting application, and it's something that we have looked at closely in the past from a Spintronics perspective. I think longer term, there are some opportunities there for us. But in the short term, I think we're focused on some other areas like TMR materials and high field sensing.

Jeff Bernstein -- Cowen Inc. -- Analyst

Gotcha. OK. And then I wanted to ask about, I guess, the FDA comment period on the new over-the-counter hearing aids regulation is coming to an end here. Has that kept design activity from happening, or are you deep into that? Or sort of give us an update on the hearing aid market?

Pete Eames -- Vice President of Advanced Technology

Yeah. Well, in particular, for hearables, it's a real exciting time, and there's a lot of changes coming in that market. You're referring to a couple of popular press articles, particularly The Wall Street Journal was published on the availability of devices in the hearable market. That's something that we're really optimistic about.

We see opportunities there, and we think we're well-positioned for those types of devices, and it's something where we're seeing a lot of growth and hopefully, an opportunity to talk a lot more in the future about.

Jeff Bernstein -- Cowen Inc. -- Analyst

OK. That's great. And then lastly, Dan, it would seem like these electric vertical takeoff and landing vehicles would similarly to EVs via target market for you guys. How are you looking to try and access the guys designing those products?

Dan Baker -- President and Chief Executive Officer

Yes, exactly so. So, that would be a next generation beyond hybrid electric vehicles, so-called flying cars, which is a very exciting area. And there's even more of a premium on efficiency of batteries and power conversion, those types of systems because of the extremely high cost of weight. So, we are looking at those markets also as, of course, a bit longer term than hybrid electric vehicles.

But for power conversion and a lot of the systems we think will be an evolution of the systems that are coming on board, and we talked about an answer to one of your previous questions about power conversion for hybrid electric and autonomous vehicles.

Jeff Bernstein -- Cowen Inc. -- Analyst

And so, is that a direct sales effort that's going on there and you guys just have to knock on doors?

Dan Baker -- President and Chief Executive Officer

It's more targeted than that. We're looking at system like the Angst+Pfister BeFAST system, we're providing a key element of the system, but we think the best approach is to be part of the reference designs for power conversion modules and to get in with -- in the early stages with the module manufacturers. And as I alluded to in one of your other questions, there has been some progress there.

Jeff Bernstein -- Cowen Inc. -- Analyst

Gotcha. That's great. Thanks so much.

Dan Baker -- President and Chief Executive Officer

Thanks, Jeff.

Operator

Thank you. Our next question comes from Alex Woodward of Bridge City Capital. Your line is open.

Alex Woodward -- Bridge City Capital -- Analyst

Hi, Dan. First-time questioner but a longtime listener. 

Dan Baker -- President and Chief Executive Officer

Thanks, Alex. Welcome to the call.

Alex Woodward -- Bridge City Capital -- Analyst

Thank you. You mentioned that the lead times right now are 16 weeks, and they're longer than they used to be. Pre-pandemic, what were lead times?

Dan Baker -- President and Chief Executive Officer

Well, we endeavored to have most of our parts in stock. So, we would ship the same day, depending on the time of day. So, we still have parts that are in stock. That's not the usual case for a large order -- for a large production order.

And our lead times vary, but I was giving the 16 weeks as sort of a representative number. And even as I mentioned, even in the first two quarters of this year when we had inventory, in many cases, we were shipping out of stock directly from stock, rather. So, therefore, we could ship the same day. And lead times were shorter, as I mentioned in the prepared remarks, lead times were shorter even a few months ago.

But we're still in a much better situated than many conventional semiconductor companies.

Alex Woodward -- Bridge City Capital -- Analyst

So, I guess my real question is, what are your cycle times from like wafer to finished product? How long does it take?

Dan Baker -- President and Chief Executive Officer

Yeah, that's a good question. And so, it's quite a bit longer than it used to be. So, we used to say approximately three-month cycle time. And now we're talking about closer to four- to five-month cycle time.

We've worked very hard to improve our internal cycle times. And despite some challenges and material shortages, we're pretty pleased with where we are for our internal cycle times. And the biggest challenge is the packaging vendors. So, as some of you know, we make wafers, and then the products are sent to Asia like most semiconductor companies, we send wafers to Asia where they're packaged into the plastic packages, the ubiquitous semiconductor packages that are soldered into circuit boards for the electronics that we use.

And that's been a significant bottleneck throughout the industry. We're better situated than most companies because we have been able to keep up with our wafer production. We've been able to diversify our suppliers on that front. And we've been working on very aggressively when problems come up, shortages of certain materials.

Our engineering team has been very good at finding alternate materials at redesigning our parts, the way we make our parts so that they can be packaged or packaged using alternate materials. So, we continue to be better situated than the industry even though that kind of disruption has an impact on us.

Alex Woodward -- Bridge City Capital -- Analyst

OK. So, when you're shipping products to Asia, you've got the freight transport issues, costs are going up there, and you've also got the port congestion. So, is that where a lot of the one to two months incremental time is taking place?

Dan Baker -- President and Chief Executive Officer

That's some of it. We have the luxury of we usually air freight. So, there have been delays there, but not as bad as what we've been -- what you hear about for containers. So, we can ship a significant amount of -- we might ship the wafers that can make tens or hundreds of thousands of dollars' worth of parts in a relatively small box.

So, we can air freight that and most of the incremental time is just because of the capacity limitations and raw material shortages at the packaging vendors in Asia. That's where the big increase has been. Logistics is part of it, but the bigger challenge is just the capacity limitations at those vendors.

Alex Woodward -- Bridge City Capital -- Analyst

OK. And speaking of capacity utilization, your factory in Minnesota, what capacity utilization are you running at?

Dan Baker -- President and Chief Executive Officer

Yes, that's a great question, Alex. And we don't have a specific number, but we run at a much lower utilization than traditional semiconductors. We add more value. And so, we have the luxury of having excess capacity, which is another reason why despite shortages, we've been able to manage our internal cycle times fairly well.

We do have certain pieces of equipment in certain areas and particularly final test, where we feel that we need more capacity and we've invested in it. As I mentioned in the prepared remarks, it hasn't shown up in our capital expenditures yet because the equipment hasn't been fully deployed. We have one new piece of equipment, for example, that's here to increase our capacity in that area. And we have more equipment that we expect in this quarter, the fourth quarter, the quarter ending March 31.

But in answer to your core question, we don't have a significant overall constraint on capacity like a conventional semiconductor manufacturer who might making DRAM or something like that, where they'd be running very close to 100% capacity and any disruptions will ripple through and disrupt their shipments very severely.

Alex Woodward -- Bridge City Capital -- Analyst

OK. How are you able to build finished goods inventory in the quarter? It went up almost 190,000 and that's about $0.75 million if I use a representative gross margin. How are you able to do that when it's supply constrained, I would have thought that anything you had available customers would have taken?

Dan Baker -- President and Chief Executive Officer

Yes. That's a very good point. So, the shortages are not spread evenly across the board. We have some products that are in demand that we have had to delay.

And then we have other products where we have parts and inventory, as I mentioned in answer to another question, we can ship them straight away. We can ship them the same day. So, that's the reason and we've kept building. It's not that we're idling in our production.

Our production area is as busy as ever. So, we're building parts that we can and working on the raw materials and the work in process and shipping as much as we possibly can to the packaging vendors so that they can turn it around even with the longer lead times -- the longer cycle times.

Alex Woodward -- Bridge City Capital -- Analyst

So, I got a question for Pete here since he's on the call and he's been a longtime listener just like me. So, we have that in common. But you've -- first of all, I've got amazing respect for your products and how sensitive they are and how amazing they are and how advanced and probably in front of everybody else in the industry you are. But in a way, it almost feels like some of your products are field of dreams.

You've built it and we've been waiting for the market to come for a really long time. How do you determine when you're making the most sensitive TMR sensor in the world, I mean, that's great from an academic and maybe science perspective, but where is the real customer demand? And how do you determine new products with customers? And maybe just some insights there.

Pete Eames -- Vice President of Advanced Technology

Sure. Sure. Thanks, Alex. Of course, product development for us, there's several variables involved.

Of course, customer input is key to our process and lead customers are very important in many of these efforts. For us, high sensitivity translates into new markets and precision, and things like motion control. And that's a pretty universal requirement in industry automation. So, when those translate directly into dollars is difficult to predict, especially on new products, but we're optimistic.

Alex Woodward -- Bridge City Capital -- Analyst

How optimistic are you on some of the advanced products you have in automotive?

Pete Eames -- Vice President of Advanced Technology

Generally, we're very optimistic. We have advanced products now for transferring power and data. I described some of the new products we've released in the past quarters for those technologies. And again, we continue to be optimistic with where we're at in the market and where we're at with lead customers there.

Alex Woodward -- Bridge City Capital -- Analyst

How would you define new products?

Pete Eames -- Vice President of Advanced Technology

For us, a new product is -- well, it varies from a range of incremental improvements and innovations to complete new developments and inventions. New products for us are newest spintronic devices in new applications and new markets.

Alex Woodward -- Bridge City Capital -- Analyst

So, as you've just defined new products, what percentage of revenue are they?

Pete Eames -- Vice President of Advanced Technology

Yeah. I don't have that number in front of me, Alex, I assume it depends on which products you're talking about and how they're accounted for on that.

Alex Woodward -- Bridge City Capital -- Analyst

OK. And switching gears. I've just got one more question, and this is for Joe since he's also a first-time talker on the call. Joe, why did you join?

Joe Schmitz -- Chief Financial Officer

I am excited to be a part of a team that is helping to create the future. I think some of the challenges we have from a financial perspective, I really enjoy. I like the opportunity to develop the team and hopefully scale this operation.

Alex Woodward -- Bridge City Capital -- Analyst

Great. Thank you. That's all for me.

Operator

Thank you. [Operator instructions] And as there are no further questions in queue. At this time, I'd like to turn the call back over to Dan Baker for closing remarks. Sir?

Dan Baker -- President and Chief Executive Officer

Thank you. Well, we were pleased to report solid earnings despite the supply chain disruptions. We look forward to speaking with you again in early May to discuss fourth quarter and full fiscal year results. Thank you for participating in the call.

Operator

[Operator signoff]

Duration: 39 minutes

Call participants:

Dan Baker -- President and Chief Executive Officer

Joe Schmitz -- Chief Financial Officer

Pete Eames -- Vice President of Advanced Technology

Jeff Bernstein -- Cowen Inc. -- Analyst

Alex Woodward -- Bridge City Capital -- Analyst

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