NVE Corporation EARNINGS REPORT


NVE Corporation Reports Third Quarter Results and Announces Quarterly Dividend

EDEN PRAIRIE, Minn.—January 18, 2017—NVE Corporation (Nasdaq: NVEC) announced today financial results for the quarter and nine months ended December 31, 2016.

Total revenue for the third quarter of fiscal 2017 increased 24% to $7.46 million from $6.02 million in the prior-year quarter. The increase was due to a 42% increase in product sales, partially offset by a 65% decrease in contract research and development revenue. Net income for the third quarter of fiscal 2017 increased 35% to $3.48 million, or $0.72 per diluted share, compared to $2.58 million, or $0.53 per share, for the prior-year quarter.

For the first nine months of fiscal 2017, total revenue decreased 1% to $21.5 million from $21.6 million for the first nine months of the prior year. The decrease was due to a 30% decrease in contract research and development revenue, partially offset by a 3% increase in product sales. Net income increased 2% to $9.92 million, or $2.05 per diluted share, for the first nine months of fiscal 2017 compared to $9.69 million, or $2.00 per share, for the first nine months of fiscal 2016.

The company also announced a quarterly cash dividend to shareholders of $1.00 per share of common stock, payable February 28, 2017 to shareholders of record as of January 30, 2017.

“We are pleased to report strong increases in product sales, total revenue, and net income 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 risks of decreased revenues, risks related to our reliance on several large customers for a significant percentage of revenue, uncertainties in dividend payments to our shareholders, 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, 2016 and other reports filed with the SEC.

###

NVE CORPORATION
STATEMENTS OF INCOME
QUARTERS AND NINE MONTHS ENDED DECEMBER 31, 2016 AND 2015 (Unaudited)

 
Quarter Ended Dec. 31
2016 2015
Revenue
Product sales
$ 7,116,931   $ 5,025,041  
Contract research and development
345,748     990,974
 
Total revenue 7,462,679   6,016,015  
Cost of sales 1,502,848     1,508,361  
Gross profit   5,959,831   4,507,654  
Expenses
Selling, general, and administrative
  384,322     406,676
Research and development
826,816     738,657  
Total expenses 1,211,138
    1,145,333  
Income from operations   4,748,693     3,362,321
Interest income 395,207     468,367  
Income before taxes 5,143,900     3,830,688
Provision for income taxes 1,660,156     1,253,237  
Net income $ 3,483,744     $ 2,577,451  
Net income per share – basic $ 0.72     $ 0.53  
Net income per share – diluted $ 0.72     $ 0.53  
Weighted average shares outstanding
Basic
  4,836,336     4,844,845
Diluted
  4,839,777 4,846,970

  Nine Months Ended Dec. 31
2016   2015
Revenue
Product sales
$ 19,782,529     $ 19,197,578  
Contract research and development
1,690,461     2,419,113  
Total revenue   21,472,990       21,616,691  
Cost of sales 4,628,840
    5,146,803  
Gross profit   16,844,150       16,469,888  
Expenses
Selling, general, and administrative
  1,117,925       1,416,071  
Research and development
2,353,372     2,048,620  
Total expenses 3,471,297     3,464,691  
Income from operations   13,372,853       13,005,197  
Interest income 1,263,924     1,422,696  
Income before taxes   14,636,777       14,427,893  
Provision for income taxes 4,715,291     4,736,421  
Net income $ 9,921,486     $ 9,691,472  
Net income per share – basic $ 2.05     $ 2.00  
Net income per share – diluted $ 2.05     $ 2.00  
Weighted average shares outstanding
Basic
  4,835,639       4,853,970  
Diluted
  4,837,815       4,857,103  


NVE CORPORATION
BALANCE SHEETS
DECEMBER 31 AND MARCH 31, 2016

 
  (Unaudited)
December 31, 2016
  March 31, 2016
ASSETS
Current assets
Cash and cash equivalents
$ 3,799,188     $ 7,534,593  
Marketable securities, short-term
  24,655,206       19,697,384  
Accounts receivable, net of allowance for uncollectible accounts of $15,000
  1,461,659       2,244,086  
Inventories
  3,162,478       3,205,233  
Prepaid expenses and other assets
751,433
    734,524  
Total current assets   33,829,964       33,415,820  
Fixed assets
Machinery and equipment 
  9,020,726       8,840,033  
Leasehold improvements
1,559,719     1,539,965  
    10,580,445       10,379,998  
Less accumulated depreciation and amortization 
9,281,531     8,688,285  
Net fixed assets   1,298,914       1,691,713  
Long-term deferred tax assets 446,949     51,188  
Marketable securities, long-term 59,668,735     65,695,335  
Total assets $ 95,244,562     $ 100,854,056  
 
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Accounts payable
$ 358,530     $ 317,990  
Accrued payroll and other
679,040     556,674  
Deferred revenue
-     714,805  
Total current liabilities   1,037,570       1,589,469  
 
Shareholders’ equity
Common stock
  48,370       48,350  
Additional paid-in capital
  19,319,679
      19,205,682  
Accumulated other comprehensive (loss) income
  (135,709 )     451,359  
Retained earnings
74,974,652     79,559,196  
Total shareholders’ equity 94,206,992
    99,264,587  
Total liabilities and shareholders’ equity $ 95,244,562     $ 100,854,056