PRESS RELEASE For immediate release |
NVE Corporation Reports Third Quarter Results and Announces Quarterly Dividend
EDEN PRAIRIE, Minn.—January 17, 2018—NVE Corporation (Nasdaq: NVEC) announced today financial results for the quarter and nine months ended December 31, 2017.
Total revenue for the third quarter of fiscal 2018 decreased 1% to $7.36 million from $7.46 million in the prior-year quarter. The decrease was due to a 9% decrease in product sales, partially offset by a 164% increase in contract research and development revenue. Net income for the third quarter of fiscal 2018 increased 3% to $3.57 million, or $0.74 per diluted share, compared to $3.48 million, or $0.72 per share, for the prior-year quarter. The effective tax rate was 27.7% of net income before taxes for the quarter, compared to 32.3% in the prior-year quarter. The decreased rate for the quarter was due to the blended effect of a decrease in the Federal tax rate with the enactment of the Tax Reform Act, partially offset by a one-time $206,693 increase in the provision for income taxes from the effect of the new rate on deferred tax assets.
For the first nine months of fiscal 2018, total revenue increased 2% to $22.0 million from $21.5 million for the first nine months of the prior year. The increase was primarily due to a 33% increase in contract research and development revenue. Net income increased 1% to $10.0 million, or $2.07 per diluted share, for the first nine months of fiscal 2018 compared to $9.92 million, or $2.05 per share, for the first nine months of fiscal 2017. The effective tax rate was 30.6% of net income before taxes for the first nine months of fiscal 2018, compared to 32.2% in the prior-year period. The decreased rate was due to a decrease in the Federal tax rate with the enactment of the Tax Reform Act, partially offset by a one-time $206,693 increase in the provision for income taxes from the effect of the new rate on deferred tax assets.
The company also announced a quarterly cash dividend to shareholders of $1.00 per share of common stock, payable February 28, 2018 to shareholders of record as of January 29, 2018.
“We are pleased to report solid revenue and earnings for the quarter,” said NVE President and Chief Executive Officer Daniel A. Baker, Ph.D.
NVE is a leader in the practical commercialization of spintronics, a nanotechnology that relies on electron spin rather than electron charge to acquire, store and transmit information. The company manufactures high-performance spintronic products including sensors and couplers that are used to acquire and transmit data. NVE has also licensed its spintronic magnetoresistive random access memory technology, commonly known as MRAM.
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 uncertainties related to the economic environments in the industries we serve, uncertainties related to future contract research and development revenue, uncertainties related to future stock repurchases and dividend payments, uncertainties related to the future impact of Federal tax reform, 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 fiscal year ended March 31, 2017, as updated in the Quarterly Report on Form 10-Q for the quarter ended December 31, 2017.
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NVE CORPORATION STATEMENTS OF INCOME QUARTERS AND NINE MONTHS ENDED DECEMBER 31, 2017 AND 2016 (Unaudited) Quarter Ended December 31 2017 2016 ----------------------------- Revenue Product sales $ 6,448,831 $ 7,116,931 Contract research and development 911,958 345,748 ----------------------------- Total revenue 7,360,789 7,462,679 Cost of sales 1,657,700 1,502,848 ----------------------------- Gross profit 5,703,089 5,959,831 Expenses Selling, general, and administrative 313,033 384,322 Research and development 852,739 826,816 ----------------------------- Total expenses 1,165,772 1,211,138 ----------------------------- Income from operations 4,537,317 4,748,693 Interest income 404,665 395,207 ----------------------------- Income before taxes 4,941,982 5,143,900 Provision for income taxes 1,370,380 1,660,156 ----------------------------- Net income $ 3,571,602 $ 3,483,744 ============================= Net income per share - basic $ 0.74 $ 0.72 ============================= Net income per share - diluted $ 0.74 $ 0.72 ============================= Weighted average shares outstanding Basic 4,841,369 4,836,336 Diluted 4,847,290 4,839,777 Nine Months Ended December 31 2017 2016 ------------------------------ Revenue Product sales $ 19,718,584 $ 19,782,529 Contract research and development 2,246,105 1,690,461 ------------------------------ Total revenue 21,964,689 21,472,990 Cost of sales 4,809,235 4,628,840 ------------------------------ Gross profit 17,155,454 16,844,150 Expenses Selling, general, and administrative 1,060,757 1,117,925 Research and development 2,788,968 2,353,372 ------------------------------ Total expenses 3,849,725 3,471,297 ------------------------------ Income from operations 13,305,729 13,372,853 Interest income 1,154,303 1,263,924 ------------------------------ Income before taxes 14,460,032 14,636,777 Provision for income taxes 4,429,780 4,715,291 ------------------------------ Net income $ 10,030,252 $ 9,921,486 ============================== Net income per share - basic $ 2.07 $ 2.05 ============================== Net income per share - diluted $ 2.07 $ 2.05 ============================== Weighted average shares outstanding Basic 4,841,130 4,835,639 Diluted 4,846,036 4,837,815 NVE CORPORATION BALANCE SHEETS DECEMBER 31 AND MARCH 31, 2017 (Unaudited) Dec. 31, 2017 March 31, 2017 ------------------------------ ASSETS Current assets Cash and cash equivalents $ 4,728,352 $ 8,199,364 Marketable securities, short term 18,808,203 19,591,833 Accounts receivable, net of allowance for uncollectible accounts of $15,000 2,165,866 3,436,802 Inventories 3,596,326 3,358,298 Prepaid expenses and other assets 967,958 607,283 ------------------------------ Total current assets 30,266,705 35,193,580 Fixed assets Machinery and equipment 9,504,983 9,007,455 Leasehold improvements 1,751,646 1,644,419 ------------------------------ 11,256,629 10,651,874 Less accumulated depreciation and amortization 9,742,050 9,238,626 ------------------------------ Net fixed assets 1,514,579 1,413,248 Long-term deferred tax assets 333,023 357,055 Marketable securities, long term 56,729,730 56,810,923 ------------------------------ Total assets $ 88,844,037 $ 93,774,806 ============================== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Accounts payable $ 258,869 $ 376,275 Accrued payroll and other 534,194 576,313 Deferred revenue - 142,733 ----------------------------- Total current liabilities 793,063 1,095,321 Shareholders' equity Common stock 48,420 48,410 Additional paid-in capital 19,599,298 19,507,348 Accumulated other comprehensive loss (265,991) (38,298) Retained earnings 68,669,247 73,162,025 ------------------------------ Total shareholders' equity 88,050,974 92,679,485 ------------------------------ Total liabilities and shareholders' equity $ 88,844,037 $ 93,774,806 ==============================