We are pleased to report record revenue product sales and net income for both the fiscal year and the fourth quarter, specifically for the fiscal year, revenue increased to 11% to a record $31.2 million, driven by a 15% increase in product sales and net income increased 11% to $13.4 million, or $2.76 per diluted share. For the quarter, total revenue was a record $8.183 million and net income was a record $3.67 million or $0.75 per diluted shareNow, I’ll turn the call over to Curt for details of our financial results. Curt Reynders Thanks, Dan and good afternoon. I’ll cover fiscal year income statement, quarterly income statement, the balance sheet and the past five year’s results. As Dan mentioned, the total revenue for the fiscal year increased 11% to $31.2 million, driven by a 15% increase in product sales to over $26 million. This was our 11th consecutive year of record product sales, since becoming publicly traded in 2000. The increase in product sales was partially offset by a 6% decrease in research and development revenue. As we’ve said before, our long-term strategy has been to reduce our dependence on contract R&D toward a future of products and licensing, as our principal revenue sources. International sales accounted for approximately 55% of our revenue in fiscal 2011, up from 49% in fiscal 2010, and consistent with our vision of being a world-class company. There is more about geographic areas in our 10-K. Revenues increased 29% in Europe, 11% in Asia and 12% in other areas. A 1% decrease in U.S. revenue was due to a decrease in contract R&D revenue. Gross profit margin decreased slightly to 69% of revenue for fiscal 2011 from 70% for fiscal 2010, due to a less favorable product mix. Annual operating pretax net margins for fiscal 2011 were among the best in our industry. Operating margin was 57%, pretax margin 63%, and net margins 43%.
Research and development expense increased 13% for fiscal 2011, compared to fiscal 2010, due to increased product development activities and a decrease in contract research and development activities, which caused resources to be reallocated to expensed research and development.Net income for fiscal 2011 increased 11% to $13.4 million, or $2.76 per diluted share, compared to $12 million or $2.47 for fiscal 2010. The total of customer and company sponsored R&D activities was 17% of revenue, which is significant. Our R&D investments over the years have resulted in new products, technologies, and product opportunities. Dan will discuss some of those in a few minutes. Turning to quarterly results, we are pleased to show increases in year-over-year fourth quarter product sales and total revenues, despite comparisons to an extraordinary quarter last year. Total revenue for the quarter hit a record $8.183 million, as increased product sales offset decreased contract R&D revenue. This was our 25th consecutive year-over-year increase in product sales. Our best quarter ever for product sales was driven by strong sales in the factory and industrial markets, which is an encouraging sign for a worldwide economic recovery. The decrease in quarterly contract R&D revenue to $1.45 million from $1.52 million was due to the completion of certain contracts and contract activities. Read the rest of this transcript for free on seekingalpha.com