Product sales for the quarter increased 25% over the prior-year quarter to $4.25 million from $3.40 million. Total revenue, consisting of product sales and contract research and development revenue, increased 23% to $4.77 million for the third quarter of fiscal 2008 from $3.86 million in the prior-year quarter. Net income for the third quarter of fiscal 2008 increased 62% to $1.70 million, or $0.36 per diluted share, compared to $1.05 million, or $0.22 per share, for the prior-year quarter.

For the first nine months of fiscal 2008, product sales increased 25% to $12.83 million from $10.23 million for the first nine months of fiscal 2007. Total revenue increased 22% to $14.48 million for the first nine months of fiscal 2008 from $11.90 million for the prior-year period. Net income for the nine months of fiscal 2008 was $4.93 million, or $1.04 per diluted share compared to $3.23 million, or $0.67 per diluted share, for the first nine months of fiscal 2007.

"We are pleased to report our best third quarter ever," said NVE President and Chief Executive Officer Daniel A. Baker, Ph.D. "Increases in product sales and operating margins drove record earnings."

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 in continued growth in revenue and 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.

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NVE CORPORATION STATEMENTS OF INCOME QUARTERS AND NINE MONTHS ENDED DECEMBER 31, 2007 AND 2006 (Unaudited) Quarter Ended December 31 2007 2006 ------------ ------------ Revenue Product sales $ 4,249,809 $ 3,402,937 Contract research and development 515,716 459,112 ------------ ------------ Total revenue 4,765,525 3,862,049 Cost of sales 1,663,045 1 ,385,163 ------------ ------------ Gross profit 3,102,480 2,476,886 Expenses Selling, general, and administrative 492,771 479,387 Research and development 347,344 544,779 ------------ ------------ Total expenses 840,115 1,024,166 ------------ ------------ Income from operations 2,262,365 1,452,720 Interest income 259,865 157,337 Other income 62,930 - ------------ ------------ Income before taxes 2,585,160 1,610,057 Provision for income taxes 882,867 558,504 ------------ ------------ Net income $ 1,702,293 $ 1,051,553 ============ ============ Net income per share - basic $ 0.37 $ 0.23 ============ ============ Net income per share - diluted $ 0.36 $ 0.22 ============ ============ Weighted average shares outstanding Basic 4,637,275 4,620,835 Diluted 4,764,430 4,786,868 Supplemental financial data Stock-based compensation $ 5,598 $ 8,167 Cash paid for income taxes $ 725,000 $ - Nine Months Ended Dec. 31 2007 2006 ------------ ------------ Revenue Product sales $12,830,771 $10,233,325 Contract research and development 1,648,657 1,662,287 ------------ ------------ Total revenue 14,479,428 11,895,612 Cost of sales 4,956,973 4,224,165 ------------ ------------ Gross profit 9,522,455 7,671,447 Expenses Selling, general, and administrative 1,631,936 1,421,332 Research and development 1,169,018 1,641,637 ------------ ------------ Total expenses 2,800,954 3,062,969 ------------ ------------ Income from operations 6,721,501 4,608,478 Interest income 731,243 418,683 Interest expense - (589) Other income 62,930 25,246 ------------ ------------ Income before taxes 7,515,674 5,051,818 Provision for income taxes 2,581,272 1,824,988 ------------ ------------ Net income $ 4,934,402 $ 3,226,830 ============ ============ Net income per share - basic $ 1.06 $ 0.70 ============ ============ Net income per share - diluted $ 1.04 $ 0.67 ============ ============ Weighted average shares outstanding Basic 4,634,102 4,618,086 Diluted 4,761,112 4,784,118 Supplemental financial data Stock-based compensation $ 164,008 $ 128,203 Cash paid for income taxes $ 2,209,313 $ 44,300

NVE CORPORATION BALANCE SHEETS DECEMBER 31 AND MARCH 31, 2007 (Unaudited) Dec. 31, 2007 March 31, 2007 -------------- -------------- ASSETS Current assets Cash and cash equivalents $ 1,251,701 $ 397,423 Marketable securities, short term 1,693,149 982,415 Accounts receivable, net of allowance for uncollectible accounts of $15,000 2,182,762 2,005,005 Inventories 2,493,812 2,016,858 Deferred tax assets 473,289 1,328,106 Prepaid expenses and other assets 839,037 333,587 -------------- -------------- Total current assets 8,933,750 7,063,394 Fixed assets Machinery and equipment 5,061,407 4,458,948 Leasehold improvements 436,794 413,482 -------------- -------------- 5,498,201 4,872,430 Less accumulated depreciation 4,173,394 3,834,683 -------------- -------------- Net fixed assets 1,324,807 1,037,747 Marketable securities, long term 20,109,098 16,909,353 -------------- -------------- Total assets $ 30,367,655 $ 25,010,494 ============== ============== LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities Accounts payable $ 435,175 $ 502,595 Accrued payroll and other 550,276 590,287 Deferred revenue 237,101 29,357 -------------- -------------- Total current liabilities 1,222,552 1,122,239 Shareholders’ equity Common stock 46,387 46,274 Additional paid-in capital 18,533,940 18,289,248 Accumulated other comprehensive loss (6,641) (84,282) Retained earnings 10,571,417 5,637,015 -------------- -------------- Total shareholders’ equity 29,145,103 23,888,255 -------------- -------------- Total liabilities and shareholders’ equity $ 30,367,655 $ 25,010,494 ============== ==============