NVE Corporation Reports First Quarter Fiscal 2007 Results
Product sales increase 71%; net income more than doubles
EDEN PRAIRIE, Minn.--July 19, 2006--NVE Corporation (Nasdaq: NVEC) today announced financial results for the quarter ended June 30, 2006.
Product sales for the quarter increased 71% over the prior-year quarter to $3.05 million from $1.78 million. Total revenue, which consisted of product sales and contract research and development revenue, increased 20% to $3.64 million for the first quarter of fiscal 2007 from $3.03 million for the prior-year quarter. Net income for the quarter was $891,806 or $0.19 per diluted share, compared to $412,649 or $0.09 per diluted share for the prior-year quarter. Net income for the quarter ended June 30, 2006 included the effect of $2,569 in non-cash stock-based compensation due to the implementation of SFAS 123(R). Net income for the first quarter of fiscal 2007 also included a $473,241 non-cash provision for income taxes compared to $240,468 for the prior-year quarter.
"We are pleased to report another quarter of record product sales and profits," said NVE President and Chief Executive Officer Daniel A. Baker, Ph.D. "Gross profit margin increased to 61% and operating margin to 36%. Cash plus investments increased by $897,880 during the quarter, and we retired all of our debt."
NVE is a leader in the practical commercialization of spintronics, a nanotechnology that many experts believe represents the next generation of microelectronics. NVE licenses its MRAM intellectual property and sells spintronic sensors and couplers to revolutionize data sensing and transmission.
Statements used in this press release 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 risks in continued profitability, risks associated with our reliance on several large customers, 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 and other reports filed with the SEC.
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NVE CORPORATION
STATEMENTS OF INCOME
QUARTERS ENDED JUNE 30, 2006 AND 2005 (Unaudited)
Quarter Ended June 30
2006 2005
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Revenue
Product sales $ 3,053,328 $ 1,784,250
Contract research and development 581,867 1,241,298
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Total revenue 3,635,195 3,025,548
Cost of sales 1,399,821 1,681,118
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Gross profit 2,235,374 1,344,430
Expenses
Research and development 530,612 376,800
Selling, general, and administrative 406,732 409,594
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Total expenses 937,344 786,394
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Income from operations 1,298,030 558,036
Interest income 111,906 68,319
Interest expense (589) (2,053)
Other income - 30,815
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Income before taxes 1,409,347 655,117
Provision for income taxes 517,541 242,468
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Net income $ 891,806 $ 412,649
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Net income per share - basic $ 0.19 $ 0.09
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Net income per share - diluted $ 0.19 $ 0.09
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Weighted average shares outstanding
Basic 4,616,588 4,569,861
Diluted 4,693,075 4,683,151
Supplemental financial data
Non-cash stock-based compensation $ 2,569 $ -
Non-cash income tax expense $ 473,241 $ 240,468
NVE CORPORATION
BALANCE SHEETS
JUNE 30, 2006 AND MARCH 31, 2006
(Unaudited)
June 30, 2006 March 31, 2006
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ASSETS
Current assets
Cash and cash equivalents $ 1,737,112 $ 1,288,362
Short-term investments 749,295 1,248,103
Accounts receivable, net of allowance for
uncollectible accounts of $15,000 1,919,778 1,667,029
Inventories 2,103,995 2,149,769
Deferred tax assets 1,593,096 1,576,472
Prepaid expenses and other assets 257,056 231,412
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Total current assets 8,360,332 8,161,147
Fixed assets
Machinery and equipment 4,206,334 4,149,080
Leasehold improvements 413,482 413,482
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4,619,816 4,562,562
Less accumulated depreciation 3,443,755 3,319,651
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Net fixed assets 1,176,061 1,242,911
Long-term investments 9,302,799 8,354,861
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Total assets $ 18,839,192 $ 17,758,919
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable $ 287,593 $ 399,762
Accrued payroll and other 431,779 470,392
Deferred revenue 4,863 77,373
Capital lease obligations - 33,281
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Total current liabilities 724,235 980,808
Shareholders' equity
Common stock 46,167 46,150
Additional paid-in capital 16,519,930 16,042,637
Accumulated other comprehensive loss (199,178) (166,908)
Retained earnings 1,748,038 856,232
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Total shareholders' equity 18,114,957 16,778,111
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Total liabilities and shareholders' equity $ 18,839,192 $ 17,758,919
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