EDEN PRAIRIE, Minn.--January 17, 2007--NVE Corporation (Nasdaq: NVEC) today announced financial results for the quarter and nine months ended December 31, 2006.

Product sales for the quarter increased 95% over the prior-year quarter to $3.40 million from $1.74 million. Total revenue, consisting of product sales and contract research and development revenue, increased 48% to $3.86 million for the third quarter of fiscal 2007 from $2.61 million in the prior-year quarter. Net income for the third quarter of fiscal 2007 was $1.05 million, or $0.22 per diluted share compared to $401,385, or $0.09 per diluted share, for the prior-year quarter.

For the first nine months of fiscal 2007, product sales increased 84% to $10.23 million from $5.55 million for the first nine months of fiscal 2006. Total revenue increased 37% to $11.90 million for the first nine months of fiscal 2007 from $8.69 million for the prior-year period. Net income for the first nine months of fiscal 2007 was $3.23 million, or $0.67 per diluted share compared to $1.18 million, or $0.25 per diluted share, for the first nine months of fiscal 2006.

Net income for the quarter and nine months ended December 31, 2006 included the effects of non-cash stock-based compensation due to the implementation of SFAS 123(R). This expense, net of tax, amounted to $6,263, or nil per diluted share, in the third quarter of fiscal 2007 and $87,234, or $0.02 per share, in the first nine months of fiscal 2007. Net income for fiscal 2007 and fiscal 2006 also includes primarily non-cash provisions for income taxes recognized in accordance with SFAS 109.

"We are pleased with our financial results for the third quarter," said NVE President and Chief Executive Officer Daniel A. Baker, Ph.D. "Product sales drove revenue and net income growth, resulting in our third consecutive quarter of triple-digit earnings increases."

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.

###

NVE CORPORATION STATEMENTS OF INCOME QUARTERS AND NINE MONTHS ENDED DECEMBER 31, 2006 AND 2005 (Unaudited) Quarter Ended December 31 2006 2005 ------------ ------------ Revenue Product sales $ 3,402,937 $ 1,742,163 Contract research and development 459,112 868,119 ------------ ------------ Total revenue 3,862,049 2,610,282 Cost of sales 1,385,163 1,308,752 ------------ ------------ Gross profit 2,476,886 1,301,530 Expenses Research and development 544,779 342,616 Selling, general, and administrative 479,387 434,183 ------------ ------------ Total expenses 1,024,166 776,799 ------------ ------------ Income from operations 1,452,720 524,731 Interest income 157,337 88,168 Interest expense - (1,336) Other income - 3,101 ------------ ------------ Income before taxes 1,610,057 614,664 Provision for income taxes 558,504 213,279 ------------ ------------ Net income $ 1,051,553 $ 401,385 ============ ============ Net income per share - basic $ 0.23 $ 0.09 ============ ============ Net income per share - diluted $ 0.22 $ 0.09 ============ ============ Weighted average shares outstanding Basic 4,620,835 4,576,454 Diluted 4,786,868 4,677,712 Supplemental financial data Non-cash stock-based compensation $ 8,167 $ - Non-cash income tax expense $ 558,504 $ 210,329

Nine Months Ended Dec. 31 2006 2005 ------------ ------------ Revenue Product sales $10,233,325 $ 5,548,085 Contract research and development 1,662,287 3,139,667 ------------ ------------ Total revenue 11,895,612 8,687,752 Cost of sales 4,224,165 4,617,543 ------------ ------------ Gross profit 7,671,447 4,070,209 Expenses Research and development 1,641,637 1,237,355 Selling, general, and administrative 1,421,332 1,238,757 ------------ ------------ Total expenses 3,062,969 2,476,112 ------------ ------------ Income from operations 4,608,478 1,594,097 Interest income 418,683 233,606 Interest expense (589) (5,084) Other income 25,246 39,667 ------------ ------------ Income before taxes 5,051,818 1,862,286 Provision for income taxes 1,824,988 684,284 ------------ ------------ Net income $ 3,226,830 $ 1,178,002 ============ ============ Net income per share - basic $ 0.70 $ 0.26 ============ ============ Net income per share - diluted $ 0.67 $ 0.25 ============ ============ Weighted average shares outstanding Basic 4,618,086 4,573,173 Diluted 4,784,118 4,674,431 Supplemental financial data Non-cash stock-based compensation $ 128,203 $ - Non-cash income tax expense $ 1,780,688 $ 668,334

NVE CORPORATION BALANCE SHEETS DECEMBER 31, 2006 AND MARCH 31, 2006 (Unaudited) Dec. 31, 2006 March 31, 2006 -------------- -------------- ASSETS Current assets Cash and cash equivalents $ 423,282 $ 1,288,362 Short-term investments 838,579 1,248,103 Accounts receivable, net of allowance for uncollectible accounts of $15,000 1,907,637 1,667,029 Inventories 2,189,125 2,149,769 Deferred tax assets 1,598,321 1,576,472 Prepaid expenses and other assets 275,718 231,412 -------------- -------------- Total current assets 7,232,662 8,161,147 Fixed assets Machinery and equipment 4,395,392 4,149,080 Leasehold improvements 413,482 413,482 -------------- -------------- 4,808,874 4,562,562 Less accumulated depreciation 3,707,237 3,319,651 -------------- -------------- Net fixed assets 1,101,637 1,242,911 Long-term investments 14,710,657 8,354,861 -------------- -------------- Total assets $ 23,044,956 $ 17,758,919 ============== ============== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Accounts payable $ 502,480 $ 399,762 Accrued payroll and other 524,084 470,392 Deferred revenue - 77,373 Capital lease obligations - 33,281 -------------- -------------- Total current liabilities 1,026,564 980,808 Shareholders' equity Common stock 46,274 46,150 Additional paid-in capital 18,018,851 16,042,637 Accumulated other comprehensive loss (129,795) (166,908) Retained earnings 4,083,062 856,232 -------------- -------------- Total shareholders' equity 22,018,392 16,778,111 -------------- -------------- Total liabilities and shareholders' equity $ 23,044,956 $ 17,758,919 ============== ==============