Press Release
For immediate release
NVE Corporation Reports First Quarter Fiscal 2006 Results
EDEN PRAIRIE, Minn.--July 20, 2005--NVE Corporation (NasdaqSC: NVEC) today
announced financial results for the quarter ended June 30, 2005.
Product sales for the quarter increased 31% over the prior-year quarter to
$1.78 million from $1.36 million. Total revenue, which consisted of product
sales and contract research and development revenue, was $3.03 million for the
first quarter of fiscal 2006 compared to $2.89 million for the prior-year
quarter, an increase of 5%. Income before taxes for the quarter was $655,117 or
$0.14 per diluted share, compared to $483,671 or $0.10 per diluted share for
the prior-year quarter. After the effect of a non-cash provision for income
taxes of $242,468, net income for the first quarter of fiscal 2006 was $412,649
or $0.09 per diluted share.
"We are pleased to report another quarter of record product sales and solid
profits," said NVE President and Chief Executive Officer Daniel A. Baker, Ph.D.
"Sales of spintronic medical sensors and spintronic couplers were especially
strong. Pretax margin improved to 22% due to a more favorable revenue mix and
reduced expenses. Our cash plus investments increased by $774,215 during the
quarter and we eliminated all of NVE's long-term 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 products, including 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, uncertainties relating to MRAM
production by our licensees, risks in the enforcement of our patents,
uncertainties related to the awarding of future government contracts, risks
related to our dependence on certain suppliers, 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-KSB and other reports filed with the SEC.
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NVE CORPORATION
STATEMENTS OF INCOME
QUARTERS ENDED JUNE 30, 2005 AND 2004
(Unaudited)
Quarter Ended June 30
2005 2004
------------ ------------
Revenue
Product sales $ 1,784,250 $ 1,363,140
Contract research and development 1,241,298 1,526,087
------------ ------------
Total revenue 3,025,548 2,889,227
Cost of sales 1,681,118 1,625,881
------------ ------------
Gross profit 1,344,430 1,263,346
Expenses
Research and development 376,800 361,259
Selling, general, and administrative 409,594 484,596
------------ ------------
Total expenses 786,394 845,855
------------ ------------
Income from operations 558,036 417,491
Interest income 68,319 54,869
Interest expense (2,053) (4,457)
Other income 30,815 15,768
------------ ------------
Income before taxes 655,117 $ 483,671
Provision for income taxes 242,468 -
------------ ------------
Net income $ 412,649 $ 483,671
============ ============
Net income per share - basic $ 0.09 $ 0.11
============ ============
Net income per share - diluted $ 0.09 $ 0.10
============ ============
Weighted average shares outstanding
Basic 4,569,861 4,493,180
Diluted 4,683,151 4,977,489
NVE CORPORATION
BALANCE SHEETS
JUNE 30, 2005 AND MARCH 31, 2005
(Unaudited)
June 30, 2005 March 31, 2005
-------------- --------------
ASSETS
Current assets
Cash and cash equivalents $ 1,462,601 $ 1,240,205
Short-term investments 759,030 252,775
Accounts receivable, net of allowance for
uncollectible accounts of $15,000 2,207,720 2,285,472
Inventories 1,660,158 1,572,759
Deferred tax asset 783,395 756,074
Prepaid expenses and other assets 130,990 130,873
-------------- --------------
Total current assets 7,003,894 6,238,158
Fixed assets
Machinery and equipment 4,102,089 4,140,307
Leasehold improvements 413,482 413,482
-------------- --------------
4,515,571 4,553,789
Less accumulated depreciation 2,927,035 2,826,227
-------------- --------------
Net fixed assets 1,588,536 1,727,562
Long-term investments 6,269,848 6,224,284
-------------- --------------
Total assets $ 14,862,278 $ 14,190,004
============== ==============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 280,426 $ 319,427
Accrued payroll and other 506,061 465,930
Deferred revenue 219,914 267,355
Capital lease obligations 84,392 67,430
-------------- --------------
Total current liabilities 1,090,793 1,120,142
Capital lease obligations, less current portion - 33,281
-------------- --------------
Total liabilities 1,090,793 1,153,423
Shareholders' equity:
Common stock 45,701 45,698
Additional paid-in capital 14,307,683 14,064,625
Accumulated other comprehensive loss (53,034) (132,228)
Accumulated deficit (528,865) (941,514)
-------------- --------------
Total shareholders' equity 13,771,485 13,036,581
-------------- --------------
Total liabilities and shareholders' equity $ 14,862,278 $ 14,190,004
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