EDEN PRAIRIE, Minn.--July 20, 2004--NVE Corporation (NasdaqSC: NVEC) today announced financial results for the three months ended June 30, 2004.

Net income for the first quarter was $483,671 or $0.10 per diluted share, compared to $334,418 or $0.07 per share for the prior-year quarter. Total revenue was $2.89 million, compared to $2.82 million for the prior-year quarter, an increase of 2 percent. Product sales increased 24 percent to $1.36 million from $1.10 million in the prior-year quarter.

Research and development expenses increased 102 percent in the quarter while contract research and development revenue decreased 11 percent as the company shifted resources from government research contracts to company-funded research in order to develop new and improved commercial products.

"We are pleased with our results for the first quarter," commented President and Chief Executive Officer Daniel A. Baker, Ph.D. "Strong product sales in our core industrial markets more than offset an anticipated decline in product sales to St. Jude Medical and a decline in contract research revenue due to stepped-up product development."

"We expect to be profitable in the upcoming quarters but we may post lower net income compared to last year's quarters due to higher research and development expenses; expenses associated with rolling out MRAM manufactured under our technology agreement with Cypress Semiconductor; and expenses associated with license procurement and enforcement in the current fiscal year," added Baker. "These expenditures will enable NVE's continued growth and strengthen our intellectual property position."

NVE is a leader in the practical commercialization of spintronics, a nanotechnology which 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 uncertainties relating to MRAM production by our licensees, our dependence on Cypress for potential supply of MRAM devices, risks relating to making commercially viable MRAMs, risks in the enforcement of our patents, risks in continued profitability, 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 ENDED JUNE 30, 2004 AND 2003 (IN THOUSANDS EXCEPT PER SHARE; UNAUDITED) Three Months Ended June 30, 2004 June 30, 2003 Revenue: Contract research and development $ 1,526 $ 1,721 Product sales 1,363 1,099 -------------- -------------- Total revenue 2,889 2,820 Cost of sales 1,626 1,909 -------------- -------------- Gross profit 1,263 911 Expenses: Research and development 361 179 Selling, general & administrative 485 451 -------------- -------------- Total expenses 846 630 -------------- -------------- Income from operations 417 281 Interest income 55 49 Interest expense (4) (8) Other income 16 12 -------------- -------------- Net income $ 484 $ 334 ============== ============== Weighted average shares outstanding 4,977 4,571 Net income per share - diluted $ 0.10 $ 0.07 NVE Corporation CONDENSED BALANCE SHEETS JUNE 30, 2004 AND MARCH 31, 2004 (IN THOUSANDS) (UNAUDITED) June 30, March 31, 2004 2004 ASSETS Current assets: Cash $ 1,098 $ 1,056 Investment securities 6,347 6,489 Accounts receivable, net 1,951 1,739 Inventories 1,120 1,150 Other current assets 573 547 ----------- ----------- Total current assets 11,089 10,981 Fixed assets 1,558 1,439 ----------- ----------- Total assets $ 12,647 $ 12,420 =========== =========== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable 352 327 Accrued payroll and other 611 712 Other current liabilities 491 547 ----------- ----------- Total current liabilities 1,454 1,586 Long-term liabilities 84 101 ----------- ----------- Total liabilities 1,538 1,687 Shareholders' equity: Common stock 45 45 Additional paid-in capital 13,348 13,298 Accumulated other comprehensive income (68) 90 Accumulated deficit (2,216) (2,700) ----------- ----------- Total shareholders' equity 11,109 10,733 ----------- ----------- Total liabilities and shareholders' equity $ 12,647 $ 12,420 =========== ===========