NVE Corporation Reports Second Quarter Fiscal 2005 Results

    EDEN PRAIRIE, Minn., Oct. 20 /PRNewswire-FirstCall/ -- NVE Corporation
 (Nasdaq:   NVEC) today announced financial results for the three months ended
 September 30, 2004.
     Net income for the second quarter was $423,298, or $0.09 per diluted
 share, compared to $406,476, or $0.09 per diluted share for the prior-year
 quarter. Total revenue was $3.10 million, compared to $2.86 million for the
 prior-year quarter, an increase of 8 percent. Product sales increased
 14 percent to $1.45 million, from $1.27 million in the prior-year quarter and
 contract research and development revenue increased 3 percent to
 $1.65 million, from $1.60 million.
     For the six months ended September 30, 2004, the company reported net
 income of $906,969, or $0.18 per diluted share, compared to $740,894, or $0.16
 per share for the six months ended September 30, 2003. Total revenue for the
 first six months of fiscal 2005 was $5.98 million, compared to $5.68 million
 reported in the first six months of fiscal 2004, a 5-percent increase. Product
 sales in the first half of fiscal 2005 increased 19 percent and contract
 research and development revenue decreased 4 percent compared with the prior-
 year period.
     "We are pleased with our results for the second quarter," said Daniel A.
 Baker, Ph.D., NVE president and chief executive officer. "Strong product sales
 in our core industrial markets more than offset an anticipated decline in
 product sales to St. Jude Medical, and we maintained solid profitability."
     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, risks
 in the enforcement of our patents, uncertainties related to the awarding of
 future government contracts, risks related to competitive threats, risks
 associated with our reliance on several large customers, and risks associated
 with meeting stringent customer technical requirements, 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.
 
 
                                NVE Corporation
                         CONDENSED STATEMENTS OF INCOME
         THREE MONTHS AND SIX MONTHS ENDED SEPTEMBER 30, 2004 AND 2003
                   (IN THOUSANDS EXCEPT PER SHARE; UNAUDITED)
 
                                                 September 30,    September 30,
     Three Months Ended                               2004             2003
     Revenue:
       Contract research and development             $1,646          $1,596
       Product sales                                  1,450           1,269
     Total revenue                                    3,096           2,865
 
     Cost of sales                                    1,961           1,739
     Gross profit                                     1,135           1,126
 
     Expenses:
       Research and development                         306             303
       Selling, general & administrative                482             476
     Total expenses                                     788             779
 
     Income from operations                             347             347
 
     Interest income                                     58              44
     Interest expense                                    (4)             (7)
     Other income                                        22              22
     Net Income                                        $423            $406
 
     Weighted average shares outstanding              4,933           4,679
     Net income per share - diluted                   $0.09           $0.09
 
 
                                                 September 30,    September 30,
     Six Months Ended                                 2004             2003
     Revenue:
       Contract research and development             $3,172          $3,317
       Product sales                                  2,813           2,367
     Total revenue                                    5,985           5,684
 
     Cost of sales                                    3,587           3,648
     Gross profit                                     2,398           2,036
 
     Expenses:
       Research and development                         668             481
       Selling, general & administrative                966             926
     Total expenses                                   1,634           1,407
 
     Income from operations                             764             629
 
     Interest income                                    113              93
     Interest expense                                    (8)            (15)
     Other income                                        38              34
     Net Income                                        $907            $741
 
     Weighted average shares outstanding              4,929           4,646
     Net income per share - diluted                   $0.18           $0.16
 
 
                                NVE Corporation
                            CONDENSED BALANCE SHEETS
                     SEPTEMBER 30, 2004 AND MARCH 31, 2004
                                 (IN THOUSANDS)
 
                                                   (UNAUDITED)
                                                  September 30,     March 31,
                                                      2004             2004
     ASSETS
     Current assets:
       Cash                                            $809            $1,056
       Investment securities                          6,416             6,489
       Accounts receivable, net                       2,548             1,739
       Inventories                                    1,090             1,150
       Other current assets                             429               547
     Total current assets                            11,292            10,981
     Fixed assets                                     1,872             1,439
     Total assets                                   $13,164           $12,420
 
     LIABILITIES AND SHAREHOLDERS' EQUITY
     Current liabilities:
       Accounts payable                                 447               327
       Accrued payroll and other                        593               712
       Other current liabilities                        422               547
     Total current liabilities                        1,462             1,586
     Long-term liabilities                               68               101
     Total liabilities                                1,530             1,687
 
     Shareholders' equity:
       Common stock                                      45                45
       Additional paid-in capital                    13,377            13,298
       Accumulated other comprehensive income             5                90
       Accumulated deficit                           (1,793)           (2,700)
     Total shareholders' equity                      11,634            10,733
     Total liabilities and shareholders'
       equity                                       $13,164           $12,420
 
 

SOURCE NVE Corporation

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