DANIEL A. BAKER: I have 3:30--why don't we get started. Welcome to the newly-refurbished
Spring Hill Suites in Eden Prairie. We re-Tweeted these before and after pictures.
What it looked like on the right of the screen, and now it's been repainted.
We have a couple of out-of-towners. I was going to point out the
points of interest here in Eden Prairie. The hotel has these handy maps of
Minnesota "visitor fun." It's not a very big map...
There's stuff on both sides, though. This is for the entire State.
I guess for the folks who drove all the way from Pennsylvania, we hope you won't be too disappointed.
But they're moving on to the Black Hills.
That's where we are [pointing to map]
Some of the other points of interest:
The neighbors across 78th Street are Cub, and their parent company is across
from NVE on Valley View Road--UNFI. UNFI was looking to sell Cub,
so we, on Twitter, offered to buy it. We thought there was synergy.
We like Cub Foods donuts and cookies, and that's what we have here.
And the cake is also from Cub.
We did say--as you can see-- that NVE is a bigger market for donuts
than you might think. We do eat a lot of donuts.
They never got back to us. I don't know why.
That's over here--Cub.
And then the iconic Eden Prairie water tower.
The City of Eden Prairie tweets about
the water tower, and they light it up different colors--purple here for the
Vikings--but these two clocks have never been synchronized.
Most people don't notice it, but it was driving us crazy. We make rotational sensors.
We were thinking, well, a sensor here; a sensor there; we'll sync them up;
the clocks will agree. We offered to do that on Twitter, and well, we never heard back
from the City of Eden Prairie. Driving by, I noticed the clocks
still aren't synced up. This was a huge snow mound in
the Target parking lot. As you can see, someone managed to get a Target shopping cart up
there, so there's speculation on how they did it, but they're very creative folks
here in Eden Prairie. And here you can see somebody trying to summit
Mount Eden Prairie. They were saying it could stick around until May; it actually
stuck around until June. It's gone now, so this is actually a "former" point of
interest. But if you want to see where it used to be, there it is, or there it was [pointing to map].
By the way, Tweets like this got us the moniker of "Minnesota's nerdiest
corporate Twitter account," from Kathy Grayson, who has covered us. The one she
passed on was from Pi Day, which she didn't even know existed. I mean, who
doesn't know that? Well, she didn't. We had a number of
Tweets on Pi Day on how important pi was to some of our products. As you can
see, we took it as a compliment. It's time to call the meeting to order.
This meeting is being recorded, and we plan to make excerpts publicly available.
Those of you who've attended know that we have themes for each meeting.
Last year it was a return of in-person meetings, and we've had Olympic themes,
cars, baseball... this year the theme is artificial intelligence
and automation.
First, introductions. Employees and directors: Emily Kirton, whom you met
coming in, who's the Inspector of Elections. Emily is over there:
Daniel Nelson, our Principal Financial Officer. Pete Eames, our vice president
of advanced technology. You can ask him any tough questions.
Terry Garner, our chairman... Pat Hollister, our Audit Committee chair...
Rich Kramp, director... and Jim Brackey, director... you don't have to...
Jim is recovering from surgery, so we won't ask him to stand up.
And our auditors. Rich Lehmann, our audit coordinating partner,
and Brittany Hancock, our audit manager. We also have two out-of-towners.
We appreciate them driving from Scranton. We have plaques commemorating your
visit to Eden Prairie and to the NNE shareholders' meeting. They say,
"I came a long way for NVE's 2023 shareholders' meeting, and all I got
was this stinkin' plaque."
OUT-OF-TOWNER: Thank you.
Now, I'll call on Emily to present proof
of the due calling of the meeting. Emily?
EMILY KIRTON: On June 9, 2023, which is the date of record
for determining those shareholders eligible to vote there, were
4,833,401 shares of common stock of the company outstanding and entitled to vote.
We have on file a formal declaration that we mailed the notice of this
meeting and the proxy statement to shareholders of record on June 20, 2023,
and a report from Broadridge Financial Solutions that our materials or
Notices of Internet and Availability for the materials were sent to our
shareholders who held their shares in street name. The majority of
the outstanding shares of common stock entitled to vote are required to
constitute at quorum. Proxies indicating abstention from a vote and broker
non-votes are counted toward determining whether a quorum is present. We have
present today, in person or by proxy, the holders of more than 50 percent of the
shares outstanding on the record date. Thus we have a quorum.
DANIEL A. BAKER: On the basis of Emily's report, I declare the meeting to be duly called and convened, and competent
to proceed to conduct business. Copies of the notice of this meeting and proxy
statement are available on the back table, if anyone would like to refer to one.
As a matter of good corporate governance practice, each of our
directors stands for election each year, and we recommend and hold annual say on
pay votes, and we submit our auditors for ratification. So we have four items of
formal business to elect five directors to serve until the next annual meeting
of shareholders; consider advisory approval of named executive officer
compensation. The third is the advisory vote on the frequency of votes on
executive compensation, ratify the selection of Boulay PLLP as our
independent registered public accounting firm for the fiscal year ending
March 31, 2024. I introduced the director nominees, and they are designated and listed
in the proxy statements. No other director candidates were nominated.
Is anyone voting in person?
I don't see any indication...
so if not, Emily do you have a tally?
EMILY KIRTON: Yes. The voting report shows the following
results: With regard to Item 1, eachl director nominee received in their favor
of the shares voted as follows: Terrence Glarner, 84%; Daniel Baker, 95%; Patricia Hollister, 90%;
Richard Kramp, 92%; and James Bracke, 94%. On item 2, 95% of the shares voted
to approve named executive officer compensation. On item 3, 95% of the
shares voted were in favor of annual say-on-pay votes and on Item 4,
99% of the shares voted were in favor of the ratification of the selection of
as our independent registered public accounting firm.
On the basis of the voting, I declare that each director nominee has been
re-elected, named executive officer compensation has been approved,
shareholders favor annual say-on-pay votes, and the selection of our
independent registered public accounting firm has been ratified--and they got the
biggest mandate--much much more than me-- not that that matters. We will file a
vote report in a Current Report on Form 8-K within four business days with the
exact numbers. With no other formal business, I declare
the formal meeting adjourned. We'll go into the presentation. A tradition,
as some of you know, is to have a person-- or in this case a deep-fake person--read our
safe harbor statement. We had Einstein read it last year. Somebody asked
if that was really him. He'd been dead for quite some time, so it really wasn't.
This year, because the theme is artificial intelligence, the Bard AI
engine helped convert the safe-harbor statement to Shakespearean style, and we
have a deep fake of famous Shakespearean actor James Earl Jones to read it.
Here's the Shakespearean Safe Harbor statement:
JAMES EARL JONES [deepfake]: That which we say, on time-to-come plans,
beget hazards, such as those recorded
with what thou calleth the SEC, including that which was given for a
fortnight and two days past the Ides of March.
DANIEL A. BAKER:Fortunately, we don't have any
lawyers with us today. Artificial intelligence chatbots have been in the news.
They're useful and surprisingly accurate, although not always perfect.
I admit to being biased, so we asked the Bard AI engine why NVE is a great company.
And this is the answer it came back with: It cited our track record--
we certainly agree with that-- Market leadership and spintronic products.
If we believe Bard here, there'd be no need for this annual meeting since it thinks
we're private. But the NASDAQ Stock Exchange begs to differ, and we do pay
them a significant fee to be listed. On the other hand, "strong management team,"
well, we certainly agree with that.
We generated an official haiku for this meeting.
This is Bing GPT4. It seems apropos.
Hollywood sees AI and robots as characters and metaphors. There have been good robots, bad robots--
this is a spoiler alert, but that's a bad robot-- If you haven't seen the movie...
But maybe not. Good robots turned bad, and bad robots turned good.
That's how Hollywood sees them, but the way market researchers see it--
they're going to need a lot of sensors. So that's what we care about.
Over $100 billion worth of sensors in five years. We address this historic
market opportunity with unique technology called spintronics.
It's a nanotechnology that utilizes electron spin rather than charge to acquire, store,
and transmit information. Here's an actual electron microscope
image of one of our spintronic structures. The critical dimension is
this tunnel barrier thickness, marked here, that is just eight atoms thick.
If this was about 35 centimeters on the screen for easy figuring that, would be
100 million times magnification of one of our structures, and a wafer would
cover the entire Earth. Here's a blow-up of it. You can see the actual
molecular structure here, the atomic layers, and the thickness of that barrier.
The near-term opportunities aren't time- traveling robots or helping the Mandalorian.
It's highly automated factories for the fourth wave of
industrial automation. The fourth wave uses lots of sensors communicating with
each other and a central control system to coordinate work more efficiently.
These automation waves used to take a hundred years. The first wave was in the
1700s with steam power; the second wave in the 1800s with electricity; and then
the third wave in the 1970s with computers. But we don't have to wait
until 2070 for the fourth wave. We have historic opportunity now, with the
expected growth and demand for sensors. What are the benefits of this technology?
We have four main advantages that we summarize with the "four B's," that's
Boxes, or miniaturization; Bits, or precision;
Batteries, for efficient power conversion; and Brains, for computing to allow
sophisticated control.
The demos we have here illustrate these advantages. The first demo is a TMR switch
which detects a magnet. Pete, did you want to show how that works?
PETE EAMES: We have two demos this year.
Actually, both of them use the same cross-section materials
that Dan showed.
This is a low power switch sensor. It's also ultraminiature.
You can come up and see afterwards, but it's just this tiny little
speck at the end of the board.
It's a low-power sensor, so what's interesting about
this is that it doesn't have a power switch.
This particular sensor runs on this tiny little battery. And it's a
switch that's used to detect a magnet, like this tiny magnet.
When it gets close to the sensor, it turns on the LED and it lights up.
What's interesting about this extremely low power sensor
is that doesn't have a power switch. This sensor will run on this battery for
approximately 30 years, so you can come back in 2053 and
we'll be sure that the board is still alive.
This fits well with batteries and boxes advantages-- extremely small and low power.
The second demo that we have is this musical demonstration of
NVE's angle sensors.
The way this works is through
communication with a smart sensor that's again extremely small.
It communicates with the single board computer back here, though an industrial
interface called "SPI." This sensor is used in industrial
automation, and this particular demo is detecting the position of this pitch-pipe.
The position of the pitch-pipe is communicated back to the single-board
computer, and we can use that position to play music and light up
the notes on the background display.
We'll turn it on:
[♪ Mary had a little lamb ♪]
So this shows the smart sensors'
"brains" benefits, and also precision.
DANIEL BAKER: Thanks Pete.
A lot of technology goes into playing "Mary Had a Little Lamb."
Our customers do some amazing things with our products, and we'd like to
highlight three of those "cool applications" that we've worked on in the past year.
This is from a paper by a group that's
using our sensors to detect nanoparticle labels for biosensing. It's fast and it's
sensitive. The technology has been used for diagnostic medical testing, detecting
food pathogens, and early cancer detection. There's a link to the full
paper on our website. Our parts are in a spacecraft going to Europa, one of
Jupiter's moons, to assess conditions for life. One of our NASA contacts reminded
us that NASA provided research grants to NVE starting in 1990 to help us develop
spintronic products, and now they're being used for a NASA Level 1 missions,
meaning that they're required for successful completion of the mission's
objectives. That's one of the most demanding applications there is. This is
supposed to launch in October 2024. We're hopeful that we won't hear on the news
in October 2024 that the mission would have gone okay, except for some isolators
made by a company in Minnesota.
It's a great validation of our quality and reliability in very harsh environments.
An even more audacious mission is the
Mars Sample Return Mission. It will collect soils and rocks on Mars and
return them to Earth. It uses multiple spacecraft and a robot on Mars.
The mission will help prepare for human exploration of Mars. That is supposed to
launch in 2028 and return to Earth in 2033, so it's ways off, but they're already
looking at the parts and building some of the elements of the spacecraft.
You can see the flowchart there-- the complexity of this mission--it's quite an
undertaking. They've described it as one of the most ambitious undertakings in
the history of humankind. Turning to financials, we had a
record-shattering fiscal year: record product sales, earnings, and cash flow.
We also had a strong quarter, despite a semiconductor industry downturn,
with sales up 23%.
This graph shows fiscal 2023 was our second consecutive year
of record profits.
We're committed to maximizing shareholder value. Here are some highlights.
As shown in our proxy, our total shareholder return, with price
appreciation and dividends, was 57%.
We have one of the highest dividend yields in the industry.
And we were added to the prestigious Russell 2000 indexes in June.
To sum up, NVE has revolutionary technology; we have historic Market
opportunities, and exceptional financial performance.
I'll open the meeting to any questions...
...that's all the time we have, but feel free to stick around.
I think Pete and Emily could be here to answer any questions. The Board's going
to have to leave, but we appreciate everyone coming, and thanks again
for your support of NVE. [Applause]
Thank you.