Good day, ladies and gentlemen, and welcome to your NVE conference call on Second Quarter Results. At this time all participants are in a listen-only mode. Later we’ll conduct a question-and-answer session and instructions will follow at that time. (Operator Instructions). I would now like to introduce your host for today’s conference, Mr. Dan Baker. Sir, please go ahead, sir.

Good afternoon. Welcome to our conference call for the quarter ended September 30, 2013 the second quarter of fiscal 2014. As always I’m joined by Curt Reynders, our Chief Financial Officer and this quarter we are also joined by Dr. Peter Eames, our new Director of Advance Technology. 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 first half of the fiscal year. Pete will cover R&D. I will cover governance and we’ll open the call to questions. We filed our press release with quarterly results plus our quarterly report on Form 10-Q with the SEC in the past hour following the close of market. Both filings are available through our website. 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, uncertainties related to future growth in revenue, uncertainties related to interruptions in the government funding process, uncertainties related to future R&D contracts, risks related to developing marketable products, uncertainties relating to the revenue potential of new products, litigation risks 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, 2013. The company undertakes no obligation to update forward-looking statements we may make. We are pleased to report record product sales for the quarter, a 38% increase in product sales drove the 25% increase in total revenue. Gross margin was a record 79%. Net income increased 32% to $0.66 per diluted share and we repurchased 25,393 of common shares for a total of $1.26 million. I’ll turn the call over to Curt for details of our financial results.

Thanks Dan. As Dan said total revenue for the second quarter of fiscal 2014 increased 25% to $7.3 million from $5.82 million in the prior year quarter. The increase was due to a 38% increase in product sales, partially offset by an 88% decrease in contract research and development revenue. Contract R&D revenue decreased due to the completion of certain contracts and contract activities. It has continued to be a challenging environment for government funding. The increase in product sales was due to increased sales to certain medical device customers and sales into industrial markets. Gross profit margin increased to a record 79% of revenue for the second quarter of fiscal 2014 compared to 72% for the second quarter of fiscal 2013, due to a more favorable revenue mix and a more favorable product sales mix. Total expenses increased 26% compared to the second quarter of fiscal 2013, due to increases in SG&A and R&D expenses. With our growth however expenses remained at 21% of revenue. The increase in SG&A was due to increased performance related sales expenses and increased legal expenses. SG&A also included a non-cash expense of $53,200 for stock-based compensation due to the issuance of automatic stock options to our non-employee directors on their re-election to our board. R&D expenses increased s43% due to increased product development activities and a decrease in contract R&D which caused resources to be reallocated to expense R&D. We believe the investment in R&D will pay-off in future revenues. Pete will explain how in a few minutes. Income from operations increased 42% and our operating margin was 58% compared to 51% in the prior year quarter. Interest income decreased 16% due to lower interest rates on our marketable securities. Income before taxes for the quarter was $4.78 million compared to $3.62 million…

Thanks, Curt. In the past quarter we had a change in our R&D leadership. John Myers retired as Vice President of Development and Dr. Peter Eames was promoted to Director of Advanced Technology, taking over John’s responsibilities, leading product development and contract R&D. Pete joined NVE nearly 10 years ago, initially working on our defense advanced research project agency, spintronics and semiconductors program and he has managed several successful large programs. Pete has a PhD in experimental condensed matter physics from the University of Minnesota. He is hard driving, accomplished and one of the smartest people I know. Congratulations and welcome to the call, Pete.

Thanks, Dan. It’s an honor to lead such a talented team of researchers. NVE is positioned to be a big part what experts describe as a pervasive sensing revolution with a fusion of sensing, computing and Internet communication. We expect to help enable this revolution with products that use spintronic technology. Our primary near term goals are fast development of new products and to build back contract R&D revenue. Product development highlights for the past quarter include the introduction of new couplers and progress on current sensors and biosensors. We introduced the first products of the new IL800 series top of the line couplers which combine the best features of existing coupler product lines, two part types, a two channel and a three channel version are in stock and can be purchased from our website. In the past quarter we sampled a smaller version of our automotive coupler and lower power prototypes. The smaller version coupler involves tooling new parts to be half the size of the part we sampled previously. For low power prototypes use spin-dependent tunneling technology rather than giant magnetoresistance. We continue research to advance coupler technology including dramatically reducing energy consumption for automotives and other energy sensitive applications. We introduced current sensors for factory automation and smartgrid infrastructure earlier in the fiscal year and we are working on improvements based on customer feedback. We still have a lot of work to do but there is strong customer interest and we hope to have samples that incorporate this customer feedback this quarter and next. We have discussed biosensors in previous calls. We were recently told that a customer that was using our biosensor for medical diagnostic instrument has discontinued the project. We continue to believe in the technology. We delivered a number for pre-production sensors and we…

Thanks, Pete. I will cover governance before we open the call to questions. Our annual meeting was held last quarter. The theme was cars and the meeting was driven by a great fleet of high powered shareholders. We were pleased to be part of a select group of public companies with the best overall governance score from ISS Proxy Advisory Services. For a good corporate practice each of our Directors has stood for reelection every year and we submit our auditors for ratification. Shareholders overwhelmingly reelected all five of our directors and ratified Grant Thornton as our auditors. We also hold annual say on pay votes. Our executive officer compensation support goals of profitable growth and improving long-term shareholder value without excessive compensation. Shareholders overwhelmingly voted to approve compensation. Details of the shareholder votes are contained in our report on Form 8-K which we filed with the SEC after the meeting. Now I would like to open the call for questions for Curt, Pete or me.

(Operator Instructions). And our first question comes from the line of Steven Crowley of Craig-Hallum. Your line is open. Matt Tiampo – Craig Hallum: Hey gentlemen it’s actually Matt Tiampo for Steve Crowley. Congrats on the great quarter.

Thanks, Matt. Matt Tiampo – Craig Hallum: Just wanted to, notice – was going through your 10-Q I noticed that the strength in product sales came from largely from existing customers and it sound like both in medical and automation side, industrial side. Just looking for a sense was that new products with existing customers potentially even in new departments or was it a return to kind of more normal ordering patterns in long standing products.

Well, we seem to be gaining momentum across the board. As Curt said, we had both medical and industrial as strong areas. We have seen some interest in Asia which has been encouraging, there has been interest from price sensitive customers and there is interest in our new and improved products. So I think all-in-all we were pleased with how things seem to be hitting on all cylinders in each of our markets. Matt Tiampo – Craig Hallum: Awesome. On contract R&D what’s the prognosis for a return to some growth sort of flow in contract R&D? If you can just give us some color on how the pipeline looks potentially.

Yeah Matt, this is Curt. We expect it to be challenging probably for couple more quarters. Awards and follow-on contracts can be unpredictable thus revenues can fluctuate from quarter-to-quarter. But as Pete mentioned we have prepared a lot of proposals in the last quarter six months and hopefully when the environment improves our contract R&D revenue will also improve. Matt Tiampo – Craig Hallum: Thanks very much guys. Just a couple more from me real quickly, on the buyback it’s nice to see you guys buying back some stock in next year, that you think your stocks is a good investment. Is this part of a longer term strategy for returning capital to shareholders and what might that involve, more repurchases, potential dividend maybe acquisition, just give us some color on your thoughts there.

Well, this is Dan. We’re always looking at ways that we can enhance and maximize long term shareholder value. So we’re looking at all of those possibilities as well as the possibilities for opportunistic acquisitions or other investment opportunities and capital equipment which was significant use of funds in the past fiscal year. So it’s hard to say exactly what our board wants to do. I suppose the caveat is that is we say in our SEC filings the stock repurchase program can be modified or discontinued in any time but as we said we believe our stock is a good investment, we do as a company, we do as individuals. So I think we continue to look at opportunities there. Matt Tiampo – Craig Hallum: Thanks, last one from me. I know you guys have had a slew of nice line extensions over the past six months. Is there any one or certain area that’s performing particularly well?

You know that’s – this is Dan again. I guess that be kind of like picking between our children or something but our folks have done a great job of getting new products out and getting them out in a timely way, in ways that are responsive to our customer requirements. So we’ve mentioned several new products that we’ve had in the past year we’ve talked about current sensors, automotive sensors and smaller coupler products, and we’ve seen a lot of interest in those. We’ve made a number of line extensions with new top of line isolators that Pete alluded to briefly. And so what we are try to do is listen to our customers, be responsive to their needs and to the extent that we can provide products that are best-in-class and get them out to those customers as quickly as we possibly can. And all-in-all I think we are pleased with the results of those. Some of those are starting to bear fruit and we expect them to build as our customers design them in, learn more about them and get opportunities to redesign their circuits to take advantage of our parts which tend to be smaller more sensitive, more reliable and use less power than competing technologies. Matt Tiampo – Craig Hallum: Thanks for taking the questions guys.

Thank you. Our next question comes from the line of Orin Hirschman of AIGH Investment Partners. Your line is open sir. Orin Hirschman – AIGH Investment Partners: Thank you. It’s AIGH Investor Partners. It’s been a while since you and I’ve spoken and clearly there begin – seems to be a trend where you are sort of thinking back off. I missed some of the – beginning of the prepared comments but starting off of the last set question. you know how much of the increase was really restocking or inventories going way to low at existing customers versus new programs with existing products versus some of the new products beginning to gain hold.

Customer inventories may had been replenished in the past quarter which helped revenues after hurting revenue in the previous quarters. We have no indication of inventory effects of revenue in the current quarter. Orin Hirschman – AIGH Investment Partners: Are you able to monitor those some on the OEM user and inventory levels in order to keep an eye on them, work with the customer?

You know in some cases we can. We always seek that kind of information to try to get forecasts from our customers and to try to understand the factors that are going to influence their purchases, but it’s inexact. Our customers can get increases or decreases in their sales due to factors beyond our control and even theirs and regulatory issues, competitive factors. So our goal is to be very responsive and nimble and our production is geared for that to get the best information that we can to the extent that our customers can share that with us and when we have that information we’ve shared it on these calls. So just because we don’t have any information it’s possible that something good or bad things are going on with our customers but we try to keep we try to monitor that as closely as we can as you can imagine. Orin Hirschman – AIGH Investment Partners: And then if you can just roughly how much of the business is OEM or direct versus distri?

So you were little bit garbled but I think the question was how much of our business is OEM and how much is distributors? So almost all of our sales are through distribution, although in some cases like our medical device customers we have a pretty good direct communication link with our customers and the distributors role isn’t to stock the parts. It’s to facilitate communications and to generate new business. So the technical answer I suppose would be a very high percentages through distribution. And we don’t break it down in detail but that’s our sense but then also we do try to establish communications with our particularly our larger customers our medical customers so that we can be responsive to their needs and then we can plan accordingly. Orin Hirschman – AIGH Investment Partners: Just going back to the original beginning of the question for me was just as you look into this quarter does this begin a trend that’s has to do more with penetration and costs risen from the new products taking hold or based on certain applications that you know the customers are beginning to ramp as opposed to some the biggest impact as being that the distributors gets it overly low because they’ve been as you’ve guided in the past few quarters, I have read it’s just been overly stock flash overly cautious in terms of their inventory level.

Right and we certainly hope that this is a start of a trend and that it’s a fundamental improvement. It is a combination of factors so we don’t always know exactly. But anecdotally we’ve seen that our customers are ramping up, we are seeing new designs, we are seeing design wins and so we find ourselves optimistic and we see an improving economy and we see improvement in some of the markets that we serve, and we’ve seen a very good response to some of the new products even it hasn’t shown up in actual purchases. The responses that we’ve gotten from some of our customers on the products that we have on the new products the smaller products that has been very encouraging. So that bodes well for the future as well. Orin Hirschman – AIGH Investment Partners: And just my last follow up on this and thank you for taking the time on that. Just you mentioned some of the end applications where the customers are ramping. You know some medical, automotive which one’s would you highlight where you beginning to really see some sings of ramp once again either on their new products or existing end products?

Automotive is a very promising area for us but relatively small part of our mix right now. Medical is a much larger part of our mix. The medical device market and in particular we are strong in the cardiac rhythm management, the CRM market and we are gaining traction in the neuro-stimulator market. And those markets well particularly CRM has been a challenging market due to a variety of factors. Well we do see we are seeing signs that it’s returning to normal see if not dramatic growth and then we see opportunities in other medical device markets such as non-life support and neuro-stimulator. And we have a strong position in hearing aids, non-life support medical and we see excellent opportunities in neuro-stimulators. So I think probably that would be one market and then the other market that we serve is industrial control and factory automation and that’s also been strong, partly because of what seems to be an improving economy and improving manufacturing economy. And then also increased penetration increased share and then increased percentage of electronics and automation that all favor us. Orin Hirschman – AIGH Investment Partners: Okay, thank you so much.

Thank you.

And I am not showing any further questions at this time. I’d like to turn the call back to you, sir for closing remarks.

Well thank you. We were pleased to report record product sales and gross margin. We look forward to speaking with you again in January to report third quarter results. Thank you for participating in the call.

Ladies and gentlemen, thank you for participating in today’s conference. This does conclude the program and you may all disconnect. Everyone have a good day.