Thank you for standing by, and welcome to the NVE Corporation's First Quarter 2022 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. As a reminder, today's program may be recorded. I would now like to introduce your host for today's program, Daniel Bickert, President and CEO.
Please go ahead, sir.
Good afternoon, and welcome to our conference call for the quarter ended June 30, 2021. With me is our Chief Financial Officer, Kurt Reinders. This call is being webcast live and being recorded. A replay will be available through our website, nve.com. After my opening comments, Curt will present a 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 1st quarter results and filed our quarterly report on Form 10 Q in the past hour following the close of market. Links to the press release and the 10 Q are available through the SEC's website, our website and our Twitter timeline. 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 other 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-nineteen pandemic as well as Risk Factors listed from time to time in our filings with the SEC, including our Annual Report on Form 10 ks 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're pleased to report a strong recovery from the pandemic impacted year ago quarter. For the quarter, we reported earnings of $0.74 per share versus $0.50 in the year ago quarter, driven by a 60% increase in product sales.
Now, Curt will cover the details of our financial results. Curt?
Thanks, Dan. Total revenue for the quarter ended June 30, 2021 increased 56% to $7,150,000 compared to $4,590,000 last year Due to a 60% increase in product sales, partially offset by a 14% decrease in contract R and D revenue. This was our highest revenue quarter since 2018. The COVID-nineteen 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 and A, partially offset by an 8% decrease in R and D. The increase in SG and A Was due to increased employee compensation expense. The decrease in R and D expense was due to staffing changes $290,000 for the most recent quarter from $399,000 in the prior year quarter due to decreases in our available for sale securities and a decrease in the average interest rates on those securities. Net income for the quarter was $3,580,000 or $0.74 per diluted share compared to $2,410,000 or $0.50 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 paid a $1 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 2. Now I'll turn the call back to Dan to cover the business. Dan?
Thanks, Kurt. I'll cover business and marketing. We continue to manage the challenges and opportunities presented by global semiconductor Shortages. Some have said shortages could last several more years. Raw material and packaging service lead times have increased And prices of many raw materials have increased.
We've addressed 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 prices The shortages have created opportunities to provide products where we have drop in replacements for competitors, Particularly couplers, we've won some business because we have parts available and we hope to keep that business by demonstrating we're a reliable supplier with excellent product performance and quality. Our advanced technology team continues to work on new and improved tunneling magnetoresistance or TMR sensors, which have more signal and use less power than conventional sensors. This is especially important for automotive current sensors, Our advanced technology team also worked on Spintronic memory or MRAM Under a customer sponsored R and D contract for custom parts, MRAM is one of our core technologies.
We manufacture MRAMs for specialized applications such as anti tamper, and these programs allow us to build our technology capabilities. Turning to sales and marketing. Most in person industry trade shows were canceled or were virtual in the past quarter, But one of our distributors participated in a small in person exhibition in late June in Northern Italy. We hope there will be more in person exhibitions. Sensor plus Test is an important industry trade show.
It's normally held in Germany, but took place virtually in the past quarter. It's Build is the industry's largest event dedicated to sensors, connectivity and systems. We participated as a co exhibitor with Pfister, one 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 at a webinar on silicon carbide power control hosted by Angsten Pfister.
Silicon carbide transistors are leading edge devices that are ideal for power control because they are faster and have less energy loss than 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, the IEEE International Magnetics Conference, or Intermag for short, was held virtually in the past quarter. Originally scheduled to be held in Lyon, France, the conference was held virtually due to the pandemic.
5 of our researchers authored a Overcoming magnetic viscosity to improve accuracy and precision is an example of our leadership in sensor technology. Joe Davies, a 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. SensorsExpo Build is North America's largest event dedicated to sensors, connectivity and the Internet of Things has been postponed several times, but is still scheduled for September in San Jose. We plan to exhibit and our folks are 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 a smart sensor based robotic xylophone Blaine, do you know the way to San Jose? We've expanded our smart sensor line since the last Sensors Expo, but we plan to reprise the popular demo. There's a video of the 2019 robotics xylophone on our YouTube channel. Our Annual Shareholders Meeting will be held August 5 via telephone. I have to note with sadness the passing of 2 members of the NVE family the past quarter, both of whom some of you will remember She worked here more than 23 years and handled a variety of accounting, Investor Relations and human resource functions.
She is deeply missed. We also lost former Director, Robert H. Irish in 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 a consultant of the company until 2,003.
He was a dedicated Director with a big personality. The first annual meeting agenda item is Election of Directors. Gary Maharaj isn't standing for reelection. Gary joined our Board in 20 When Bob Irish retired, he's provided strong oversight and valuable advice in his 7 years on our Board. We appreciate his service.
Gary will be concentrating on his day job of CEO of Surmodics Incorporated, and we wish him continued success. We are pleased to have been able to nominate Doctor. James W. Brackie to replace Gary on our Board. Jim is an accomplished executive and highly experienced public company director.
He was CEO of Lifecore Biomedical for more than 20 years. His management, technical, medical device and public company experience and his medical education qualify him to serve as a Director. After voting for directors, the 2nd annual meeting agenda item is approval of officer compensation. As detailed in our proxy, We don't overpay our officers. Our officers have the same fringe benefits as all employees, and there are no executive perks or golden parachutes.
The 3rd annual meeting agenda item is ratification of our auditors, Boulay PLLP, as our auditors for this A popular feature of our in person annual meetings was live hands on product demonstrations. Instead of that There's a playlist called 2021 Annual Meeting Demonstrations, highlighting recent sensor, coupler and Internet of Things innovations. Now I'd like to open the call for questions. Jonathan?
And we have a question from the line of Jeff Bernstein from Cowen. Your question please.
Hey guys. Nice quarter. It was very strong sequentially and year to year. And I think that you had hoped that last quarter Would have had a little bit 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 More of where the strengths came from in the quarter?
Sure, Jeff. Sales increased across the board in most of our markets and product lines. Coupler sales were especially strong in the past quarter, and we believe we're better positioned in these times of shortages than Some traditional semiconductor competitors we have, the overall worldwide semiconductor market It's strong and the effects of the pandemic on revenue appear to be subsiding. The impact of the pandemic on Elective Medical Devices also appears to be recovering. Based on orders, forecasts and what we've been hearing, we currently expect strong Year over year growth this quarter, the quarter ending September 30, 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 are stronger than others, but it was really an across the board increase.
That's great. And You mentioned that you believe you had some wins where you had drop in products. I guess that was in couplers. And so customers of competitors who couldn't get product were able to source product from you essentially. Is that The size of it?
Yes. We do believe we saw some of that in the recent quarter.
Got you. And is that kind of activity continuing or are you still seeing opportunities like that?
Yes, we've continued to see opportunities and we continue to see a very strong Demand, particularly with the couplers.
Got you. Okay. That's great. And then I wanted to ask about the isolator business. You guys mentioned The Angst and Pfister work with the silicon carbide products and related products.
And there was Texas Instruments put out a thing about a webinar on using their isolators to meet Certain, I think it was RF emission standards for, I guess, the Federal Communications Commission And I think that your products are sort of naturally don't cause those problems. But can you just talk a little bit about that?
Yes. Jeff, this is Dan. So CISPR-thirty two, 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 our Spintronic isolators have significant advantages Over semiconductor isolators, like you mentioned Texas Instruments. So we don't have to have webinars on how to mitigate that noise because We don't have the noise. Because electron spin is inherently persistent, our devices don't require the radio 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 sorts of radio frequency noise It's becoming stricter as we get more and more devices in the Internet of Things and more and more devices just throughout are 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 sorts of tests.
Got you. And is it correct to assume that this is a bigger problem in sort of a high speed kinds of applications that come with some of the compound semiconductors like silicon carbide?
Yes, it tends to be, because the faster you run the devices, The higher the frequencies are and then they can transmit better through barriers and things like that. So transmitting better is bad when it's noise pollution, when it's radio frequency pollution.
Okay, great. Great. And so you've talked in the past about how well you're positioned for the EV market. I've been reading a lot more recently about a lot of capital going into EVTOLs, Electric vertical takeoff and landing, essentially small dronehelicopters for Transporting people and goods. It would seem like that your products would be equally, if not even better positioned in A situation like that where both weight and power are important parameters.
Yes, exactly so. So that's a fascinating area. And the advantages that we have of lower power And smaller size, which we get from our core technology of Spintronics, are significant advantages in many markets. And certainly, as you Point out, it's a big advantage in that type of market, the drone market, where every little bit of weight is or power is extremely important. Of course, lower power translates into smaller batteries.
And our devices, particularly our tunneling magnetoresistive devices, are especially efficient for power. And we have the smallest devices of their type in the industry. We have experience in space and aviation as well as in medical device markets. So we've gotten pretty good at designing for small size and low power.
And how would you go after a market like that where there's not really any kind of traditional Supply chain, yes, those things are just starting out with all these essentially private startup companies?
Yes. So we work to reach those folks 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 a private label partnership with a company with strong automotive sales Channels, which allows us to reach some of those customers. And then 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 other markets that require 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 For companies that aren't going to design that themselves.
That's great. Thank you. And I'll
This does conclude the question and answer session of today's program. I'd like to hand the program back to Daniel Baker for any further remarks.
Well, if there are no other questions, we were pleased to report a 48% increase in earnings, driven by a 56% increase in revenue. We look forward to speaking with you again on August 5 for our Annual Meeting and in October to discuss Q2 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.