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We have attempted to identify, in context, some of the factors that we currently believe may cause actual future experience and results to differ from their current expectations.
−Removed: These differences may be caused by a variety of factors, including but not limited to risks related to our reliance on several large customers for a significant percentage of revenue, our dependence on critical suppliers and packaging vendors, uncertainties related to the economic environments in the industries we serve, uncertainties related to future sales and revenues, risks of credit losses, risks and uncertainties related to future stock repurchases and dividend payments, and other specific risks that may be alluded to in this Report or in the documents incorporated by reference in this Report.
+Added: These differences may be caused by a variety of factors, including but not limited to risks related to our reliance on several large customers for a significant percentage of revenue, uncertainties related to the economic environments in the industries we serve, uncertainties related to future sales and revenues, risks and uncertainties related to tariffs, customs, duties, and other trade barriers, risks and uncertainties related to future stock repurchases and dividend payments, and other specific risks that may be alluded to in this Report or in the documents incorporated by reference in this Report.
Further information regarding our risks and uncertainties is contained in Part I, Item 1A “Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended March 31, 2025.
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A description of our critical accounting policies is provided in Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the fiscal year ended March 31, 2025.
−Removed: As of December 31, 2024, our critical accounting policies and estimates continued to include investment valuation, inventory valuation, and deferred tax assets estimation.
−Removed: Quarter ended December 31, 2024, compared to quarter ended December 31, 2023
+Added: As of June 30, 2025, our critical accounting policies and estimates continued to include marketable securities valuation, inventory valuation, and deferred tax assets estimation.
+Added: Quarter ended June 30, 2025, compared to quarter ended June 30, 2024
The table shown below summarizes the percentage of revenue and quarter-to-quarter changes for various items:
Percentage of Revenue
−Removed: Quarter Ended December 31,
−Removed: Product sales
−Removed: Contract research and development
−Removed: Total revenue
−Removed: Cost of sales
−Removed: Research and development
−Removed: Selling, general, and administrative
−Removed: Total expenses
−Removed: Income from operations
−Removed: Interest income
−Removed: Income before taxes
−Removed: Provision for income taxes
−Removed: Total revenue for the quarter ended December 31, 2024 (the third quarter of fiscal 2025) decreased 25% compared to the quarter ended December 31, 2023 (the third quarter of fiscal 2024).
−Removed: The decrease was due to a 22% decrease in product sales and a 74% decrease in contract research and development revenue.
−Removed: The decrease in product sales was due to decreased purchases by existing customers.
−Removed: The decrease in contract research and development revenue was due to the completion of certain contracts.
−Removed: Gross margin for the third quarter of fiscal 2025 was 84% of revenue, compared to 80% the prior-year quarter.
−Removed: The increase in gross margin percentage was due to a more profitable product mix and a larger portion of direct rather than distributor sales.
−Removed: Total expenses increased 40% for the third quarter of fiscal 2025 compared to the third quarter of fiscal 2024 due to a 61% increase in research and development expense and a 12% increase in selling, general, and administrative expense.
−Removed: The increase in research and development expense was due to increased new product development activities.
−Removed: The increase in selling, general, and administrative expenses was primarily due to increased sales and marketing activities.
−Removed: Interest income for the third quarter of fiscal 2025 decreased 4% due to a decrease in marketable securities and lower yields on recently purchased marketable securities.
−Removed: Other income in the third quarter of fiscal 2025 was primarily from the reclaiming of precious metals used in our manufacturing process.
−Removed: Our effective tax rate, which is the provision for income taxes as a percentage of income before taxes, decreased to 15% for the third quarter of fiscal 2025 compared to 16% for the third quarter of fiscal 2024.
−Removed: The decrease in our effective tax rate compared to the prior-year quarter was due changes in the timing and amounts of federal tax credits and deductions.
−Removed: The 27% decrease in net income in the third quarter of fiscal 2025 compared to the prior-year quarter was primarily due to decreased revenue, increased operating expenses, and decreased interest income, partially offset by increased gross profit margin, increased other income, and a lower effective tax rate.
−Removed: Nine months ended December 31, 2024, compared to nine months ended December 31, 2023
−Removed: The table shown below summarizes the percentage of revenue and period-to-period changes for various items:
−Removed: Percentage of Revenue
−Removed: Nine Months Ended Dec.
+Added: Quarter Ended June 30,
Product sales
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Selling, general, and administrative
−Removed: Provision for credit losses
Total expenses
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Provision for income taxes
−Removed: Total revenue for the nine months ended December 31, 2024, decreased 18% compared to the nine months ended December 31, 2023.
−Removed: The decrease was due to a 20% decrease in product sales, partially offset by a 72% increase in contract research and development revenue.
−Removed: The decrease in product sales was due to decreased purchases by existing customers.
−Removed: The increase in contract research and development revenue was due to a major research and development contract completed during the nine months ended December 31, 2024.
−Removed: Gross margin for the first nine months of fiscal 2025 was 85% of revenue, compared to 78% for the first nine months of fiscal 2024.
−Removed: The increase in gross margin percentage was due to a more profitable product mix and a larger portion of direct rather than distributor sales.
−Removed: Total expenses increased 28% for the first nine months of fiscal 2025 compared to the first nine months of fiscal 2024 due to a 35% increase in research and development expense and a 19% increase in selling, general, and administrative expense.
−Removed: The increase in research and development expense was due to increased new product development activities.
−Removed: The increase in selling, general, and administrative expenses was primarily due to increased sales and marketing activities.
−Removed: The 16% decrease in net income for the first nine months of fiscal 2025 compared to the prior-year period was primarily due to decreased revenue, increased operating expenses, and decreased interest income, partially offset by increased other income and increased gross profit margin.
+Added: Total revenue for the quarter ended June 30, 2025 (the first quarter of fiscal 2026) decreased 10% compared to the quarter ended June 30, 2024 (the first quarter of fiscal 2025).
+Added: The decrease was due to an 11% decrease in product sales, partially offset by a 17% increase in contract research and development revenue.
+Added: The decrease in product sales was primarily due to decreased defense industry sales during the quarter ended June 30, 2025, compared to the prior-year quarter.
+Added: Defense industry sales can be highly variable because of procurement cycles.
+Added: The increase in contract research and development revenue was due to new research and development contracts.
+Added: Gross margin for the first quarter of fiscal 2026 was 81% of revenue, compared to 86% the prior-year quarter.
+Added: The decrease in gross margin percentage was due to a less profitable product mix and increased distributor sales for the quarter ended June 30, 2025, compared to the prior-year quarter.
+Added: Total operating expenses decreased 20% for the first quarter of fiscal 2026 compared to the first quarter of fiscal 2025, due to an 18% decrease in research and development expense and a 23% decrease in selling, general, and administrative expense.
+Added: The decrease in research and development expense was due to completion of some of our wafer-level chip scale packaging activities and reallocation of some research and development resources to manufacturing.
+Added: The decrease in selling, general, and administrative expenses was primarily due to the timing of sales and marketing activities, and reallocation of some general and administrative resources to manufacturing.
+Added: Our effective tax rate, which is the provision for income taxes as a percentage of income before taxes, increased to 17% for the first quarter of fiscal 2026 compared to 16% for the first quarter of fiscal 2025.
+Added: The increase in our effective tax rate compared to the prior-year quarter was due to changes in the timing and amounts of federal tax credits and deductions.
+Added: We currently expect to realize advanced manufacturing investment tax credits of between $700,000 an $800,000 if we deploy equipment as planned in fiscal 2026.
+Added: The 13% decrease in net income in the first quarter of fiscal 2026 compared to the prior-year quarter was primarily due to decreased revenue and decreased gross margin, partially offset by decreased operating expenses.
Liquidity and Capital Resources
−Removed: Cash and cash equivalents were $5,485,684 as of December 31, 2024, compared to $10,283,550 as of March 31, 2024.
−Removed: The $4,797,866 decrease in cash and cash equivalents during the first nine months of fiscal 2025 was due to $2,237,563 of cash used in investing activities and $14,388,356 of net cash used in financing activities, partially offset by $11,828,053 in net cash provided by operating activities.
+Added: Cash and cash equivalents were $3,222,552 as of June 30, 2025, compared to $8,036,564 as of March 31, 2025.
+Added: The $4,814,012 decrease in cash and cash equivalents during the first quarter of fiscal 2026 was due to $5,167,506 of net cash used in investing activities and $4,837,166 of cash used in financing activities, partially offset by $5,190,660 in net cash provided by operating activities.
Operating Activities
Net cash provided by operating activities related to product sales and research and development contract revenue was our primary source of working capital for the current and prior-year quarters.
−Removed: Accounts receivable decreased $1,789,769 during the first nine months of fiscal 2025 primarily due to decreased revenue and the timing of customer payments.
−Removed: Inventories increased $629,039 primarily due to our decision to increase inventories in anticipation of a semiconductor industry recovery.
−Removed: Prepaid expenses and other assets increased $47,132 primarily due to the timing of federal estimated tax payments.
−Removed: Accrued payroll and other expenses decreased $217,626 primarily due to decreased accrual for performance-based compensation.
+Added: Accounts receivable decreased $1,335,447 during the first quarter of fiscal 2026 primarily due to the timing of customer payments.
+Added: Prepaid expenses and other assets increased $196,757 primarily due to increased accrued bond interest and prepaid insurance.
+Added: Accrued payroll and other liabilities increased $523,259 primarily due to the timing of estimated tax payments.
Investing Activities
−Removed: Cash used by investing activities during the nine months ended December 31, 2024, consisted of $11,279,773 of marketable securities purchases and $1,162,790 of fixed asset purchases, partially offset by $10,205,000 in proceeds from maturities of marketable securities.
−Removed: Fixed asset purchases consisted primarily of a $1,125,437 downpayment on production equipment expected to be delivered in fiscal 2026.
−Removed: We plan to significantly increase fixed asset purchases in fiscal 2025 and 2026 compared to fiscal 2024 to support increases in production capacity and new product development.
+Added: Cash used by investing activities during the quarter ended June 30, 2025, consisted of $10,108,982 of marketable securities purchases and $1,058,524 of fixed asset purchases, partially offset by $6,000,000 in proceeds from maturities of marketable securities.
+Added: Fixed asset purchases were production equipment.
Financing Activities
−Removed: Cash used in financing activities during the nine months ended December 31, 2024, consisted of $14,502,518 of cash dividends paid to shareholders, partially offset by $114,162 in proceeds from stock option exercises.
−Removed: In addition to cash dividends to shareholders paid in the first quarter of fiscal 2025, on January 22, 2025, we announced that our Board of Directors had declared a cash dividend of $1.00 per share of Common Stock, or $4,837,166 based on shares outstanding as of December 31, 2024, to be paid on February 28, 2025.
+Added: Cash used in financing activities during the quarter ended June 30, 2025, consisted of $4,837,166 of cash dividends paid to shareholders.
+Added: In addition to cash dividends to shareholders paid in the first quarter of fiscal 2026, on July 23, 2025, we announced that our Board of Directors had declared a cash dividend of $1.00 per share of Common Stock, or $4,837,166 based on shares outstanding as of June 30, 2025, to be paid on August 29, 2025.
We plan to fund dividends through cash provided by operating activities and proceeds from maturities of marketable securities.
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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.