NVE CORP - Form 10-Q SEC filing

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended December 31, 2024

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 000-12196

NVE CORPORATION

(Exact name of registrant as specified in its charter)

Minnesota		41-1424202
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

11409 Valley View Road, Eden Prairie, Minnesota		55344
(Address of principal executive offices)		(Zip Code)

(952) 829-9217
(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

	Large accelerated filer ☐	Accelerated filer ☐
	Non-accelerated filer ☒	Smaller reporting company ☒
		Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value	NVEC	The NASDAQ Stock Market, LLC

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Common Stock, $0.01 Par Value – 4,837,166 shares outstanding as of December 31, 2024.

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NVE CORPORATION

QUARTERLY REPORT ON FORM 10-Q

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

Balance Sheets

Statements of Income for the Quarters Ended December 31 , 202 4 and 202 3

Statements of Comprehensive Income for the Quarters Ended December 31 , 202 4 and 202 3

Statements of Income for the Nine Month s Ended December 31 , 202 4 and 202 3

Statements of Comprehensive Income for the Nine Month s Ended December 31 , 202 4 and 202 3

Statements of Cash Flows for the Nine Months Ended December 31 , 202 4 and 202 3

Statements of Shareholders’ Equity for the Nine Months Ended December 31 , 202 4

Statements of Shareholders’ Equity for the Nine Months Ended December 31 , 202 3

Notes to Financial Statements

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Item 4. Controls and Procedures

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

Item 1A. Risk Factors

Item 4. Mine Safety Disclosures

Item 6. Exhibits

SIGNATURES

Table of Contents

PART I–FINANCIAL INFORMATION

Item 1. Financial Statements.

NVE CORPORATION

BALANCE SHEETS

	(Unaudited) December 31, 2024			March 31, 2024*
ASSETS
Current assets
Cash and cash equivalents	$	5,485,684		$	10,283,550
Marketable securities, short-term (amortized cost of $14,993,163 as of December 31, 2024, and $12,283,630 as of March 31, 2024)		14,907,252			11,917,779
Accounts receivable, net of allowance for credit losses of $15,000 as of December 31 and March 31, 2024		1,355,064			3,144,833
Inventories		7,787,624			7,158,585
Prepaid expenses and other assets		736,481			689,349
Total current assets		30,272,105			33,194,096
Fixed assets
Machinery and equipment		11,663,886			10,501,096
Leasehold improvements		1,956,309			1,956,309
		13,620,195			12,457,405
Less accumulated depreciation		11,645,199			11,403,383
Net fixed assets		1,974,996			1,054,022
Deferred tax assets		1,689,207			1,453,704
Marketable securities, long-term (amortized cost of $29,996,231 as of December 31, 2024, and $31,417,890 as of March 31, 2024)		29,704,367			30,788,301
Right-of-use asset – operating lease		947,889			289,910
Total assets	$	64,588,564		$	66,780,033

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	154,683		$	127,154
Accrued payroll and other		511,589			729,215
Operating lease liability		84,838			179,372
Total current liabilities		751,110			1,035,741
Long-term operating lease liability		864,966			175,775
Total liabilities		1,616,076			1,211,516

Shareholders’ equity
Common stock, $0.01 par value, 6,000,000 shares authorized; 4,837,166 issued and outstanding as of December 31, 2024 and 4,833,676 as of March 31, 2024		48,372			48,337
Additional paid-in capital		19,806,845			19,554,812
Accumulated other comprehensive loss		(295,358	)		(777,637	)
Retained earnings		43,412,629			46,743,005
Total shareholders’ equity		62,972,488			65,568,517
Total liabilities and shareholders’ equity	$	64,588,564		$	66,780,033

*The March 31, 2024 Balance Sheet is derived from the audited financial statements contained in our Annual Report on Form 10-K for the fiscal year ended March 31, 2024.

See accompanying notes.

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NVE CORPORATION

STATEMENTS OF INCOME

(Unaudited)

	Quarter Ended December 31,
	2024		2023
Revenue
Product sales	$	4,960,488	$	6,366,009
Contract research and development		102,557		390,251
Total revenue		5,063,045		6,756,260
Cost of sales		797,622		1,355,067
Gross profit		4,265,423		5,401,193
Expenses
Research and development		869,677		540,895
Selling, general, and administrative		434,783		389,311
Total expenses		1,304,460		930,206
Income from operations		2,960,963		4,470,987
Interest income		474,180		491,671
Other income		135,057		-
Income before taxes		3,570,200		4,962,658
Provision for income taxes		521,790		778,236
Net income	$	3,048,410	$	4,184,422
Net income per share – basic	$	0.63	$	0.87
Net income per share – diluted	$	0.63	$	0.87
Cash dividends declared per common share	$	1.00	$	1.00
Weighted average shares outstanding
Basic		4,835,262		4,833,401
Diluted		4,839,124		4,837,230

STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

	Quarter Ended December 31,
	2024			2023
Net income	$	3,048,410		$	4,184,422
Unrealized gain (loss) on marketable securities, net of tax		(226,848	)		748,830
Comprehensive income	$	2,821,562		$	4,933,252

See accompanying notes.

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NVE CORPORATION

STATEMENTS OF INCOME

(Unaudited)

	Nine Months Ended December 31,
	2024		2023
Revenue
Product sales	$	17,680,780	$	22,183,223
Contract research and development		924,199		537,727
Total revenue		18,604,979		22,720,950
Cost of sales		2,720,370		5,034,556
Gross profit		15,884,609		17,686,394
Expenses
Research and development		2,595,808		1,920,095
Selling, general, and administrative		1,543,428		1,298,211
Provision for credit losses		-		9,514
Total expenses		4,139,236		3,227,820
Income from operations		11,745,373		14,458,574
Interest income		1,432,568		1,440,289
Other income		135,057		-
Income before taxes		13,312,998		15,898,863
Provision for income taxes		2,140,856		2,587,145
Net income	$	11,172,142	$	13,311,718
Net income per share – basic	$	2.31	$	2.75
Net income per share – diluted	$	2.31	$	2.75
Cash dividends declared per common share	$	3.00	$	3.00
Weighted average shares outstanding
Basic		4,834,382		4,832,992
Diluted		4,839,247		4,839,725

STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

	Nine Months Ended December 31,
	2024		2023
Net income	$	11,172,142	$	13,311,718
Unrealized gain on marketable securities, net of tax		482,279		460,541
Comprehensive income	$	11,654,421	$	13,772,259

See accompanying notes.

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NVE CORPORATION

STATEMENTS OF SHAREHOLDERS’ EQUITY

(Unaudited)

								Accumulated
					Additional			Other
	Common Stock				Paid-In			Comprehensive			Retained
	Shares		Amount		Capital			Income (Loss)			Earnings			Total
Balance as of March 31, 2024		4,833,676	$	48,337	$	19,554,812		$	(777,637	)	$	46,743,005		$	65,568,517
Comprehensive income:
Unrealized gain on marketable securities, net of tax									28,710						28,710
Net income												4,097,587			4,097,587
Total comprehensive income															4,126,297
Stock-based compensation						18,442									18,442
Cash dividends ($1.00 per share of common stock)												(4,833,676	)		(4,833,676	)
Balance as of June 30, 2024		4,833,676	$	48,337	$	19,573,254		$	(748,927	)	$	46,006,916		$	64,879,580
Exercise of stock options		344		3		(32	)								(29	)
Comprehensive income:
Unrealized gain on marketable securities, net of tax									680,417						680,417
Net income												4,026,145			4,026,145
Total comprehensive income															4,706,562
Stock-based compensation						105,203									105,203
Cash dividends ($1.00 per share of common stock)												(4,833,676	)		(4,833,676	)
Balance as of September 30, 2024		4,834,020	$	48,340	$	19,678,425		$	(68,510	)	$	45,199,385		$	64,857,640
Exercise of stock options		3,146		32		114,159									114,191
Comprehensive income:
Unrealized loss on marketable securities, net of tax									(226,848	)					(226,848	)
Net income												3,048,410			3,048,410
Total comprehensive income															2,821,562
Stock-based compensation						14,261									14,261
Cash dividends ($1.00 per share of common stock)												(4,835,166	)		(4,835,166	)
Balance as of December 31, 2024		4,837,166	$	48,372	$	19,806,845		$	(295,358	)	$	43,412,629		$	62,972,488

See accompanying notes.

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NVE CORPORATION

STATEMENTS OF SHAREHOLDERS’ EQUITY

(Unaudited)

							Accumulated
					Additional		Other
	Common Stock				Paid-In		Comprehensive			Retained
	Shares		Amount		Capital		Income (Loss)			Earnings			Total
Balance as of March 31, 2023		4,830,826	$	48,308	$	19,295,442	$	(1,213,858	)	$	48,949,610		$	67,079,502
Exercise of stock options		2,575		26		117,501								117,527
Comprehensive income:
Unrealized loss on marketable securities, net of tax								(234,701	)					(234,701	)
Net income											4,403,730			4,403,730
Total comprehensive income														4,169,029
Stock-based compensation						10,536								10,536
Cash dividends declared ($1.00 per share of common stock)											(4,830,826	)		(4,830,826	)
Balance as of June 30, 2023		4,833,401	$	48,334	$	19,423,479	$	(1,448,559	)	$	48,522,514		$	66,545,768
Comprehensive income:
Unrealized loss on marketable securities, net of tax								(53,588	)					(53,588	)
Net income											4,723,566			4,723,566
Total comprehensive income														4,669,978
Stock-based compensation						106,312								106,312
Cash dividends declared ($1.00 per share of common stock)											(4,833,401	)		(4,833,401	)
Balance as of September 30, 2023		4,833,401	$	48,334	$	19,529,791	$	(1,502,147	)	$	48,412,679		$	66,488,657
Comprehensive income:
Unrealized gain on marketable securities, net of tax								748,830						748,830
Net income											4,184,422			4,184,422
Total comprehensive income														4,933,252
Stock-based compensation						12,544								12,544
Cash dividends declared ($1.00 per share of common stock)											(4,833,401	)		(4,833,401	)
Balance as of December 31, 2023		4,833,401	$	48,334	$	19,542,335	$	(753,317	)	$	47,763,700		$	66,601,052

See accompanying notes.

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NVE CORPORATION

STATEMENTS OF CASH FLOWS

(Unaudited)

	Nine Months Ended December 31,
	2024			2023
OPERATING ACTIVITIES
Net income	$	11,172,142		$	13,311,718
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		241,816			231,749
Bonds discount amortization		(212,554	)		(75,676	)
Provision for credit losses		-			9,514
Stock-based compensation		137,906			129,392
Deferred income taxes		(371,436	)		(847,235	)
Non-cash operating lease credit		(63,322	)		(20,039	)
Changes in operating assets and liabilities:
Accounts receivable		1,789,769			4,268,102
Inventories		(629,039	)		(932,801	)
Prepaid expenses and other assets		(47,132	)		66,154
Accounts payable		27,529			(111,011	)
Accrued payroll and other		(217,626	)		(914,836	)
Net cash provided by operating activities		11,828,053			15,115,031

INVESTING ACTIVITIES
Purchases of fixed assets		(1,162,790	)		(16,731	)
Purchases of marketable securities		(11,279,773	)		(6,103,185	)
Proceeds from maturities of marketable securities		10,205,000			8,400,000
Net cash provided by (used in) investing activities		(2,237,563	)		2,280,084

FINANCING ACTIVITIES
Proceeds from exercise of stock options		114,162			117,527
Payment of dividends to shareholders		(14,502,518	)		(14,497,628	)
Net cash used in financing activities		(14,388,356	)		(14,380,101	)

Increase (decrease) in cash and cash equivalents		(4,797,866	)		3,015,014

Cash and cash equivalents at beginning of period		10,283,550			1,669,896

Cash and cash equivalents at end of period	$	5,485,684		$	4,684,910

Supplemental disclosures of cash flow information:
Cash paid during the period for income taxes	$	2,782,289		$	3,685,861

See accompanying notes.

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NVE CORPORATION

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

NOTE 1. DESCRIPTION OF BUSINESS

We develop and sell devices that use spintronics, a nanotechnology that relies on electron spin rather than electron charge to acquire, store, and transmit information.

NOTE 2. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited financial statements of NVE Corporation are prepared consistent with accounting principles generally accepted in the United States and in accordance with Securities and Exchange Commission rules and regulations. In the opinion of management, these financial statements reflect all adjustments, consisting only of normal and recurring adjustments, necessary for a fair presentation of the financial statements. Although we believe that the disclosures are adequate to make the information presented not misleading, certain disclosures have been omitted as allowed, and the Notes to Financial Statements have been condensed as permitted. It is suggested that these unaudited financial statements be read in conjunction with the audited financial statements and Notes included in our latest Annual Report on Form 10-K for the fiscal year ended March 31, 2024. The results of operations for the quarter ended December 31, 2024, are not necessarily indicative of the results that may be expected for the full fiscal year ending March 31, 2025.

Significant accounting policies

A description of our significant accounting policies and estimates is provided in Note 2 to the Financial Statements in our Annual Report on Form 10-K for the fiscal year ended March 31, 2024. As of December 31, 2024, there were no changes to our significant accounting policies or estimates.

Reclassification

The presentation of certain items in the statement of cash flows for the three- and nine-month periods ending December 31, 2023 has been changed to conform to the classifications used in 2024. These reclassifications had no effect on shareholders’ equity, net income, or comprehensive net income as previously reported.

NOTE 3. NEW ACCOUNTING STANDARDS NOT YET ADOPTED

In November 2024, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40). ASU 2024-03 aims to enhance transparency for users of financial statements by requiring public business entities to disaggregate specific expense categories. In January 2025, the FASB issued ASU No. 2025-01, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date, which clarified the effective date for non-calendar year-end entities such as us. ASU 2024-03 mandates disclosures in the notes to financial statements detailing the composition and trends of key expense categories within major income statement captions. These enhanced disclosures are intended to help investors more effectively assess the entity’s performance, understand its cost structure, and make more accurate forecasts of future cash flows. For public business entities, ASU 2024-03 is effective for annual periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027, which for us will be for fiscal 2028 and for interim reporting periods beginning with the first quarter of fiscal 2029. The adoption will result in disclosure changes only.

We do not expect the adoption of other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies that do not require adoption until a future date to have a material impact on our financial statements when they are adopted.

NOTE 4. NET INCOME PER SHARE

Net income per basic share is computed based on the weighted-average number of common shares issued and outstanding during each period. Net income per diluted share amounts assume exercise of all stock options. The following tables show the components of diluted shares:

	Quarter Ended December 31,
	2024	2023
Weighted average common shares outstanding – basic	4,835,262	4,833,401
Dilutive effect of stock options	3,862	3,829
Shares used in computing net income per share – diluted	4,839,124	4,837,230

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	Nine Months Ended December 31,
	2024	2023
Weighted average common shares outstanding – basic	4,834,382	4,832,992
Dilutive effect of stock options	4,865	6,733
Shares used in computing net income per share – diluted	4,839,247	4,839,725

NOTE 5. MARKETABLE SECURITIES

The following table shows the major categories of our marketable securities and their contractual maturities as of December 31, 2024:

	Total		<1 Year		1–3 Years		3–5 Years
Money market funds	$	5,109,218	$	5,109,218	$	-	$	-
Treasury securities		4,686,781		-		4,686,781		-
Corporate bonds		39,924,838		14,907,252		17,149,882		7,867,704
Total	$	49,720,837	$	20,016,470	$	21,836,663	$	7,867,704

Total marketable securities and money market funds represented approximately 77% of our total assets as of December 31, 2024. Marketable securities as of December 31, 2024, had remaining maturities between 10 weeks and 52 months.

Money market funds are included on the balance sheets in “Cash and cash equivalents.” Corporate bonds are included in “Marketable securities, short term” and “Marketable securities, long term.” Treasury securities are included in “Marketable securities, long term.” Accrued interest receivable was $354,529 as of December 31, 2024, and $460,627 as of March 31, 2024, and is included in the balance sheets in “Prepaid expenses and other assets.”

We monitor the credit ratings of our marketable securities at least quarterly as reported by Standard & Poor’s. The following table summarizes the fair values of our marketable securities as of December 31, 2024, aggregated by credit rating:

Credit Rating		Fair Value
AAA	$	9,795,999
AA+		3,877,878
AA		9,755,138
AA-		18,408,078
A+		2,915,398
A		4,968,346
Total	$	49,720,837

Because we believe it is more likely than not we will recover the cost basis of our investments, we did not record any allowance attributable to credit losses. None of the marketable securities purchased during the period had experienced more-than-insignificant deterioration in credit quality since its origination and were therefore not considered “Purchased Financial Assets with Credit Deterioration.”

The following table shows the estimated fair value of our marketable securities, aggregated by fair value hierarchy inputs used in estimating their fair values:

	As of December 31, 2024						As of March 31, 2024
	Level 1		Level 2		Total		Level 1		Level 2		Total
Money market funds	$	5,109,218	$	-	$	5,109,218	$	9,842,796	$	-	$	9,842,796
Treasury securities		-		4,686,781		4,686,781		-		-		-
Corporate bonds		-		39,924,838		39,924,838		-		42,706,080		42,706,080
Total	$	5,109,218	$	44,611,619	$	49,720,837	$	9,842,796	$	42,706,080	$	52,548,876

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The following table shows the amortized cost, fair value and gross unrealized holding gains and losses of our marketable securities as of December 31 and March 31, 2024:

As of December 31, 2024

As of March 31, 2024

Amortized

Cost

Gross

Unrealized

Holding

SEC Form 10-Q filed by NVE Corporation