NVE Corporation Reports Fourth Quarter and Fiscal Year Results Fourth Quarter Product Sales Increase 76%; Pretax Income More Than Doubles



    EDEN PRAIRIE, Minn., May 3 /PRNewswire-FirstCall/ -- NVE Corporation
 (Nasdaq:   NVEC) today announced financial results for the quarter and fiscal
 year ended March 31, 2006.
     Product sales for the fourth quarter of fiscal 2006 increased 76% over
 the prior year to $2.80 million from $1.59 million. Total revenue,
 consisting of product sales and contract research and development revenue,
 increased 13% to $3.48 million for the fourth quarter of fiscal 2006
 compared to $3.07 million in the prior-year quarter. Income before taxes
 for the quarter was $978,493 or $0.21 per diluted share, compared to
 $349,209 or $0.07 per diluted share for the prior-year quarter. After the
 effect of a provision for income taxes of $358,749, net income for the
 fourth quarter of fiscal 2006 was $619,744 or $0.13 per share. Net income
 for the fourth quarter of fiscal 2005 was $476,113 or $0.10 per share
 including an income tax benefit of $126,904 or $0.03 per share.
     For fiscal 2006 product sales increased 51% to $8.35 million from $5.52
 million in fiscal 2005. Total revenue was $12.17 million for fiscal 2006
 compared to $11.62 million for fiscal 2005. Income before taxes for fiscal
 2006 was $2.84 million or $0.61 per diluted share, compared to $1.62
 million or $0.34 per diluted share for the prior year. After the effect of
 a provision for income taxes of $1.04 million, net income for fiscal 2006
 was $1.80 million or $0.39 per share. Net income for fiscal 2005 was $1.76
 million or $0.37 per share including an income tax benefit of $138,404 or
 $0.03 per share.
     "We are pleased to report record product sales, total revenue, and
 pretax profit for the fourth quarter and fiscal year," said NVE President
 and Chief Executive Officer Daniel A. Baker, Ph.D. "Operating income for
 the quarter more than tripled, driven by strong product sales. We enter
 fiscal 2007 with a solid balance sheet, products that are in demand, and an
 excellent intellectual property portfolio."
     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-KSB and other reports filed with the SEC.
                                NVE CORPORATION
                              STATEMENTS OF INCOME
          QUARTERS AND YEARS ENDED MARCH 31, 2006 AND 2005 (Unaudited)
 
                                                     Quarter Ended March 31
                                                     2006              2005
     Revenue
       Product sales                             $2,797,882        $1,590,848
       Contract research and development            684,892         1,481,309
     Total revenue                                3,482,774         3,072,157
     Cost of sales                                1,600,990         1,853,230
     Gross profit                                 1,881,784         1,218,927
     Expenses
       Research and development                     487,470           468,367
       Selling, general, and administrative         517,385           463,473
     Total expenses                               1,004,855           931,840
     Income from operations                         876,929           287,087
     Interest income                                 99,178            61,798
     Interest expense                                  (967)           (2,398)
     Other income                                     3,353             2,722
     Income before taxes                            978,493           349,209
     Provision (benefit) for income taxes           358,749          (126,904)
     Net income                                    $619,744          $476,113
     Net income per share - basic                     $0.13             $0.10
     Net income per share - diluted                   $0.13             $0.10
     Weighted average shares outstanding
       Basic                                      4,603,634         4,556,138
       Diluted                                    4,690,943         4,777,846
     Supplemental financial data (unaudited)
       Non-cash income tax expense (benefit)       $321,749         $(126,904)
 
                                                      Year Ended March 31
                                                    2006              2005
     Revenue
       Product sales                             $8,345,967        $5,522,250
       Contract research and development          3,824,559         6,093,320
     Total revenue                               12,170,526        11,615,570
     Cost of sales                                6,218,533         7,010,734
     Gross profit                                 5,951,993         4,604,836
     Expenses
       Research and development                   1,724,825         1,393,503
       Selling, general, and administrative       1,756,142         1,867,556
     Total expenses                               3,480,967         3,261,059
     Income from operations                       2,471,026         1,343,777
     Interest income                                332,784           235,341
     Interest expense                                (6,051)          (13,256)
     Other income                                    43,020            53,988
     Income before taxes                          2,840,779         1,619,850
     Provision (benefit) for income taxes         1,043,033          (138,404)
     Net income                                  $1,797,746        $1,758,254
     Net income per share - basic                     $0.39             $0.39
     Net income per share - diluted                   $0.39             $0.37
     Weighted average shares outstanding
       Basic                                      4,580,684         4,512,247
       Diluted                                    4,667,994         4,733,955
     Supplemental financial data (unaudited)
       Non-cash income tax expense (benefit)       $990,083         $(126,904)
 
 
 
                                NVE CORPORATION
                                 BALANCE SHEETS
                            MARCH 31, 2006 AND 2005
 
                                                 (Unaudited)
                                                  March 31          March 31
                                                    2006              2005
     ASSETS
     Current assets
       Cash and cash equivalents                 $1,288,362        $1,240,205
       Short-term investments                     1,248,103           252,775
       Accounts receivable, net of allowance
        for uncollectible accounts of $15,000     1,667,029         2,285,472
       Inventories                                2,149,769         1,572,759
       Deferred tax assets                        1,576,472           756,074
       Prepaid expenses and other assets            231,412           130,873
     Total current assets                         8,161,147         6,238,158
     Fixed assets
       Machinery and equipment                    4,149,080         4,140,307
       Leasehold improvements                       413,482           413,482
                                                  4,562,562         4,553,789
       Less accumulated depreciation              3,319,651         2,826,227
     Net fixed assets                             1,242,911         1,727,562
     Long-term investments                        8,354,861         6,224,284
     Total assets                               $17,758,919       $14,190,004
 
     LIABILITIES AND SHAREHOLDERS' EQUITY
     Current liabilities
       Accounts payable                            $399,762          $319,427
       Accrued payroll and other                    470,392           465,930
       Deferred revenue                              77,373           267,355
       Capital lease obligations                     33,281            67,430
     Total current liabilities                      980,808         1,120,142
     Capital lease obligations, less
      current portion                                   -              33,281
     Total liabilities                              980,808         1,153,423
 
     Shareholders' equity
       Common stock                                  46,150            45,698
       Additional paid-in capital                16,042,637        14,064,625
       Accumulated other comprehensive loss        (166,908)         (132,228)
       Retained earnings (deficit)                  856,232          (941,514)
     Total shareholders' equity                  16,778,111        13,036,581
     Total liabilities and shareholders'
      equity                                    $17,758,919       $14,190,004
 
 

SOURCE NVE Corporation

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