EDEN PRAIRIE, Minn.--January 19, 2005--NVE Corporation (NasdaqSC: NVEC) today announced financial results for the three months ended December 31, 2004.

Net income for the third quarter was $375,172, compared with net income of $577,156 for the prior-year quarter. Earnings per share were $0.08 per share, compared to $0.12 per share for the prior year quarter. Revenue was $2.56 million, compared to $3.12 million for the prior-year quarter, a decrease of 18 percent.

For the nine months ended December 31, 2004, net income was $1,282,141, compared to net income of $1,318,050 for the nine months ended December 31, 2003. Earnings per share were $0.26 per share compared to $0.28 per share in the prior year period. Revenue for the first nine months of fiscal 2005 was $8.54 million, compared to $8.80 million reported in the first nine months of fiscal 2004, a 3 percent decrease.

"We are satisfied with our financial results in light of industry conditions," said Daniel A. Baker, Ph.D., NVE's president and chief executive officer. "We reported a solid profit in the third quarter despite a decline in revenues due to an anticipated sales reduction with St. Jude Medical and an industry-wide inventory glut. We expect new sensors and couplers, as well as MRAM devices and royalties, to drive future growth."

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 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 CONDENSED STATEMENTS OF INCOME THREE MONTHS AND NINE MONTHS ENDED DECEMBER 31, 2004 AND 2003 (IN THOUSANDS EXCEPT PER SHARE; UNAUDITED) Three Months Ended Dec. 31, 2004 Dec. 31, 2003 Revenue: Contract research and development $ 1,441 $ 1,633 Product sales 1,118 1,485 -------------- -------------- Total revenue 2,559 3,118 Cost of sales 1,571 1,907 -------------- -------------- Gross profit 988 1,211 Expenses: Research and development 257 231 Selling, general & administrative 438 464 -------------- -------------- Total expenses 695 695 -------------- -------------- Income from operations 293 516 Interest income 60 47 Interest expense (3) (6) Other income 25 20 -------------- -------------- Net income $ 375 $ 577 ============== ============== Weighted average shares outstanding 4,883 4,832 Net income per share - diluted $ 0.08 $ 0.12 Nine Months Ended Dec. 31, 2004 Dec. 31, 2003 Revenue: Contract research and development $ 4,612 $ 4,950 Product sales 3,931 3,852 -------------- -------------- Total revenue 8,543 8,802 Cost of sales 5,157 5,554 -------------- -------------- Gross profit 3,386 3,248 Expenses: Research and development 925 712 Selling, general & administrative 1,404 1,391 -------------- -------------- Total expenses 2,329 2,103 -------------- -------------- Income from operations 1,057 1,145 Interest income 174 140 Interest expense (11) (21) Other income 62 54 -------------- -------------- Net income $ 1,282 $ 1,318 ============== ============== Weighted average shares outstanding 4,880 4,739 Net income per share - diluted $ 0.26 $ 0.28 NVE Corporation CONDENSED BALANCE SHEETS DECEMBER 31, 2004 AND MARCH 31, 2004 (IN THOUSANDS) (UNAUDITED) Dec. 31, March 31, 2004 2004 ASSETS Current assets: Cash $ 671 $ 1,056 Investment securities 6,577 6,489 Accounts receivable, net 2,266 1,739 Inventories 1,751 1,150 Other current assets 382 547 ----------- ----------- Total current assets 11,647 10,981 Fixed assets 1,846 1,439 ----------- ----------- Total assets $ 13,493 $ 12,420 =========== =========== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable 410 327 Accrued payroll and other 682 712 Other current liabilities 382 547 ----------- ----------- Total current liabilities 1,474 1,586 Long-term liabilities 51 101 ----------- ----------- Total liabilities 1,525 1,687 Shareholders' equity: Common stock 45 45 Additional paid-in capital 13,377 13,298 Accumulated other comprehensive (loss) income (37) 90 Accumulated deficit (1,417) (2,700) ----------- ----------- Total shareholders' equity 11,968 10,733 ----------- ----------- Total liabilities and shareholders' equity $ 13,493 $ 12,420 =========== ===========