PRESS RELEASE
For immediate release
NVE Corporation Reports Fourth Quarter and Fiscal Year Results
Fourth quarter product sales increase 76%; pretax income more than doubles
EDEN PRAIRIE, Minn.--May 3, 2006--NVE Corporation (Nasdaq: NVEC) today
announced financial results for the quarter and fiscal year ended March 31,
2006.
Product sales for the fourth quarter of fiscal 2006 increased 76% over the
prior year to $2.80 million from $1.59 million. Total revenue, consisting of
product sales and contract research and development revenue, increased 13% to
$3.48 million for the fourth quarter of fiscal 2006 compared to $3.07 million
in the prior-year quarter. Income before taxes for the quarter was $978,493 or
$0.21 per diluted share, compared to $349,209 or $0.07 per diluted share for
the prior-year quarter. After the effect of a provision for income taxes of
$358,749, net income for the fourth quarter of fiscal 2006 was $619,744 or
$0.13 per share. Net income for the fourth quarter of fiscal 2005 was $476,113
or $0.10 per share including an income tax benefit of $126,904 or $0.03 per
share.
For fiscal 2006 product sales increased 51% to $8.35 million from $5.52 million
in fiscal 2005. Total revenue was $12.17 million for fiscal 2006 compared to
$11.62 million for fiscal 2005. Income before taxes for fiscal 2006 was
$2.84 million or $0.61 per diluted share, compared to $1.62 million or $0.34
per diluted share for the prior year. After the effect of a provision for
income taxes of $1.04 million, net income for fiscal 2006 was $1.80 million or
$0.39 per share. Net income for fiscal 2005 was $1.76 million or $0.37 per
share including an income tax benefit of $138,404 or $0.03 per share.
"We are pleased to report record product sales, total revenue, and pretax
profit for the fourth quarter and fiscal year," said NVE President and Chief
Executive Officer Daniel A. Baker, Ph.D. "Operating income for the quarter
more than tripled, driven by strong product sales. We enter fiscal 2007 with a
solid balance sheet, products that are in demand, and an excellent
intellectual property portfolio."
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-KSB and other reports filed with the SEC.
###
NVE CORPORATION
STATEMENTS OF INCOME
QUARTERS AND YEARS ENDED MARCH 31, 2006 AND 2005
(Unaudited)
Quarter Ended March 31
2006 2005
------------ ------------
Revenue
Product sales $ 2,797,882 $ 1,590,848
Contract research and development 684,892 1,481,309
------------ ------------
Total revenue 3,482,774 3,072,157
Cost of sales 1,600,990 1,853,230
------------ ------------
Gross profit 1,881,784 1,218,927
Expenses
Research and development 487,470 468,367
Selling, general, and administrative 517,385 463,473
------------ ------------
Total expenses 1,004,855 931,840
------------ ------------
Income from operations 876,929 287,087
Interest income 99,178 61,798
Interest expense (967) (2,398)
Other income 3,353 2,722
------------ ------------
Income before taxes 978,493 349,209
Provision (benefit) for income taxes 358,749 (126,904)
------------ ------------
Net income $ 619,744 $ 476,113
============ ============
Net income per share - basic $ 0.13 $ 0.10
============ ============
Net income per share - diluted $ 0.13 $ 0.10
============ ============
Weighted average shares outstanding
Basic 4,603,634 4,556,138
Diluted 4,690,943 4,777,846
Supplemental financial data (unaudited)
Non-cash income tax expense (benefit) $ 321,749 $ (126,904)
Year Ended March 31
2006 2005
------------ ------------
Revenue
Product sales $ 8,345,967 $ 5,522,250
Contract research and development 3,824,559 6,093,320
------------ ------------
Total revenue 12,170,526 11,615,570
Cost of sales 6,218,533 7,010,734
------------ ------------
Gross profit 5,951,993 4,604,836
Expenses
Research and development 1,724,825 1,393,503
Selling, general, and administrative 1,756,142 1,867,556
------------ ------------
Total expenses 3,480,967 3,261,059
------------ ------------
Income from operations 2,471,026 1,343,777
Interest income 332,784 235,341
Interest expense (6,051) (13,256)
Other income 43,020 53,988
------------ ------------
Income before taxes 2,840,779 1,619,850
Provision (benefit) for income taxes 1,043,033 (138,404)
------------ ------------
Net income $ 1,797,746 $ 1,758,254
============ ============
Net income per share - basic $ 0.39 $ 0.39
============ ============
Net income per share - diluted $ 0.39 $ 0.37
============ ============
Weighted average shares outstanding
Basic 4,580,684 4,512,247
Diluted 4,667,994 4,733,955
Supplemental financial data (unaudited)
Non-cash income tax expense (benefit) $ 990,083 $ (126,904)
NVE CORPORATION
BALANCE SHEETS
MARCH 31, 2006 AND 2005
(Unaudited)
March 31 March 31
2006 2005
-------------- --------------
ASSETS
Current assets
Cash and cash equivalents $ 1,288,362 $ 1,240,205
Short-term investments 1,248,103 252,775
Accounts receivable, net of allowance for
uncollectible accounts of $15,000 1,667,029 2,285,472
Inventories 2,149,769 1,572,759
Deferred tax assets 1,576,472 756,074
Prepaid expenses and other assets 231,412 130,873
-------------- --------------
Total current assets 8,161,147 6,238,158
Fixed assets
Machinery and equipment 4,149,080 4,140,307
Leasehold improvements 413,482 413,482
-------------- --------------
4,562,562 4,553,789
Less accumulated depreciation 3,319,651 2,826,227
-------------- --------------
Net fixed assets 1,242,911 1,727,562
Long-term investments 8,354,861 6,224,284
-------------- --------------
Total assets $ 17,758,919 $ 14,190,004
============== ==============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable $ 399,762 $ 319,427
Accrued payroll and other 470,392 465,930
Deferred revenue 77,373 267,355
Capital lease obligations 33,281 67,430
-------------- --------------
Total current liabilities 980,808 1,120,142
Capital lease obligations, less current portion - 33,281
-------------- --------------
Total liabilities 980,808 1,153,423
Shareholders' equity
Common stock 46,150 45,698
Additional paid-in capital 16,042,637 14,064,625
Accumulated other comprehensive loss (166,908) (132,228)
Retained earnings (deficit) 856,232 (941,514)
-------------- --------------
Total shareholders' equity 16,778,111 13,036,581
-------------- --------------
Total liabilities and shareholders' equity $ 17,758,919 $ 14,190,004
============== ==============