PART I. FINANCIAL INFORMATION [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited financial statements for NVE Corporation, including balance sheets, income statements, comprehensive income statements, shareholders' equity statements, and cash flow statements, along with detailed notes explaining the basis of presentation, significant accounting policies, and specific financial instrument details for the quarter ended June 30, 2021 [Balance Sheets](index=4&type=section&id=Balance%20Sheets) The balance sheets provide a snapshot of the company's financial position as of June 30, 2021, compared to March 31, 2021, showing a slight decrease in total assets and shareholders' equity, while current liabilities significantly increased **Key Balance Sheet Figures (in millions USD):** | Metric | June 30, 2021 | March 31, 2021 | | :---------------------- | :------------ | :------------- | | Total Assets | $72.1 | $72.5 | | Total Current Liabilities | $2.0 | $1.0 | | Total Shareholders' Equity | $69.6 | $70.9 | [Statements of Income](index=5&type=section&id=Statements%20of%20Income%20for%20the%20Quarters%20Ended%20June%2030%2C%202021%20and%202020) The statements of income detail the company's financial performance for the quarter ended June 30, 2021, showing significant year-over-year growth in total revenue, gross profit, and net income, primarily driven by increased product sales **Statements of Income (Quarter Ended June 30, in millions USD):** | Metric | 2021 | 2020 | YoY Change | | :-------------------------- | :---------- | :---------- | :--------- | | Total Revenue | $7.2 | $4.6 | +55.9% | | Product Sales | $7.0 | $4.4 | +59.5% | | Contract R&D Revenue | $0.2 | $0.2 | -13.5% | | Gross Profit | $5.4 | $3.8 | +43.5% | | Net Income | $3.6 | $2.4 | +48.4% | | Net Income per Share – Basic | $0.74 | $0.50 | +48.0% | | Cash Dividends Declared per Share | $1.00 | $1.00 | 0% | [Statements of Comprehensive Income](index=5&type=section&id=Statements%20of%20Comprehensive%20Income%20for%20the%20Quarters%20Ended%20June%2030%2C%202021%20and%202020) The statements of comprehensive income report the comprehensive income for the quarter, which includes net income and other comprehensive income items, primarily unrealized gains or losses from marketable securities **Statements of Comprehensive Income (Quarter Ended June 30, in millions USD):** | Metric | 2021 | 2020 | | :------------------------------------------ | :---------- | :---------- | | Net Income | $3.6 | $2.4 | | Unrealized (loss) gain from marketable securities, net of tax | $(0.1) | $1.2 | | Comprehensive Income | $3.5 | $3.7 | [Statements of Shareholders' Equity](index=6&type=section&id=Statements%20of%20Shareholders%27%20Equity%20for%20the%20Period%20Ended%20June%2030%2C%202021) These statements detail the changes in shareholders' equity for the periods ended June 30, 2021, and June 30, 2020, reflecting the impact of comprehensive income, stock-based compensation, and cash dividends declared - Total shareholders' equity as of June 30, 2021, was **$69.6 million**[21](index=21&type=chunk) - Cash dividends declared were **$1.00 per share** for both Q2 2021 (**$4.8 million** total) and Q2 2020 (**$4.8 million** total)[17](index=17&type=chunk)[21](index=21&type=chunk)[24](index=24&type=chunk) - Stock-based compensation expense was **$7.2 thousand** for Q2 2021 and **$2.7 thousand** for Q2 2020[21](index=21&type=chunk)[24](index=24&type=chunk) [Statements of Cash Flows](index=8&type=section&id=Statements%20of%20Cash%20Flows) The statements of cash flows outline the cash inflows and outflows from operating, investing, and financing activities, showing a net decrease in cash and cash equivalents for the quarter ended June 30, 2021, primarily due to dividend payments **Statements of Cash Flows (Quarter Ended June 30, in millions USD):** | Activity | 2021 | 2020 | | :-------------------------------- | :---------- | :---------- | | Net cash provided by operating activities | $3.3 | $3.2 | | Cash used in investing activities | $(0.03) | $0 | | Cash used in financing activities | $(4.8) | $(4.8) | | Decrease in cash and cash equivalents | $(1.6) | $(1.7) | | Cash and cash equivalents at end of period | $8.9 | $6.4 | [Notes to Financial Statements](index=9&type=section&id=Notes%20to%20Financial%20Statements) These notes provide supplementary information and explanations for the financial statements, covering business description, accounting policies, new accounting standards, net income per share, fair value measurements, inventory details, stock-based compensation, income taxes, leases, stock repurchase program, employee plans, and subsequent events [NOTE 1. DESCRIPTION OF BUSINESS](index=9&type=section&id=NOTE%201.%20DESCRIPTION%20OF%20BUSINESS) NVE Corporation develops and sells devices utilizing spintronics, a nanotechnology that relies on electron spin, for data acquisition, storage, and transmission, including high-performance spintronic sensors and couplers - NVE develops and sells devices using spintronics nanotechnology[29](index=29&type=chunk) - Products include high-performance spintronic sensors and couplers[29](index=29&type=chunk) [NOTE 2. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES](index=9&type=section&id=NOTE%202.%20BASIS%20OF%20PRESENTATION%20AND%20SIGNIFICANT%20ACCOUNTING%20POLICIES) The unaudited financial statements are prepared consistent with GAAP and SEC rules, reflecting normal and recurring adjustments, with no material changes to significant accounting policies as of June 30, 2021 - Financial statements are unaudited and prepared consistent with GAAP and SEC rules[30](index=30&type=chunk) - No changes to significant accounting policies as of June 30, 2021[31](index=31&type=chunk) [NOTE 3. RECENTLY ISSUED ACCOUNTING STANDARDS](index=9&type=section&id=NOTE%203.%20RECENTLY%20ISSUED%20ACCOUNTING%20STANDARDS) The company adopted ASU 2019-12 (Income Taxes) for the quarter ended June 30, 2021, with no material impact, and ASU 2021-04 (Earnings Per Share, etc.) is effective for fiscal 2023 and is not expected to have a significant impact - Adopted ASU 2019-12 (Income Taxes) for Q1 FY2022; no material impact[32](index=32&type=chunk) - ASU 2021-04 (Earnings Per Share, etc.) effective for fiscal 2023; not expected to have a significant impact[33](index=33&type=chunk) [NOTE 4. NET INCOME PER SHARE](index=9&type=section&id=NOTE%204.%20NET%20INCOME%20PER%20SHARE) This note details the calculation of basic and diluted net income per share, showing the weighted-average common shares outstanding and the dilutive effect of stock options **Net Income Per Share Components (Quarter Ended June 30):** | Metric | 2021 | 2020 | | :------------------------------------------ | :---------- | :---------- | | Weighted average common shares outstanding – basic | 4,833,232 | 4,835,038 | | Dilutive effect of stock options | 3,589 | 119 | | Shares used in computing net income per share – diluted | 4,836,821 | 4,835,157 | [NOTE 5. FAIR VALUE OF FINANCIAL INSTRUMENTS](index=10&type=section&id=NOTE%205.%20FAIR%20VALUE%20OF%20FINANCIAL%20INSTRUMENTS) This note discusses the classification and fair value measurement of marketable securities (corporate bonds and money market funds) as available-for-sale, using Level 1 and Level 2 inputs, with total available-for-sale securities representing approximately 87% of total assets - Marketable securities (corporate bonds and money market funds) are classified as available-for-sale securities and carried at estimated fair value[35](index=35&type=chunk) - Total available-for-sale securities were **$62.8 million** as of June 30, 2021, representing approximately **87% of total assets**[36](index=36&type=chunk)[39](index=39&type=chunk) - Fair value measurements primarily utilize Level 1 inputs for money market funds and Level 2 inputs for corporate bonds[39](index=39&type=chunk) - Gross unrealized holding losses on corporate bonds were **$(95.7 thousand)** as of June 30, 2021, but no securities were considered impaired[39](index=39&type=chunk)[41](index=41&type=chunk) [NOTE 6. INVENTORIES](index=11&type=section&id=NOTE%206.%20INVENTORIES) This note provides a breakdown of inventory components, showing a slight decrease in total inventories from March 31, 2021, to June 30, 2021, primarily due to a reduction in finished goods **Inventories (in millions USD):** | Inventory Component | June 30, 2021 | March 31, 2021 | | :------------------ | :------------ | :------------- | | Raw materials | $0.7 | $0.7 | | Work in process | $2.4 | $2.2 | | Finished goods | $0.6 | $1.0 | | Total inventories | $3.7 | $3.9 | [NOTE 7. STOCK-BASED COMPENSATION](index=11&type=section&id=NOTE%207.%20STOCK-BASED%20COMPENSATION) This note reports stock-based compensation expense, which increased significantly year-over-year for the first quarter of fiscal 2022 - Stock-based compensation expense was **$7.2 thousand** for Q1 FY2022, an increase from **$2.7 thousand** in Q1 FY2021[43](index=43&type=chunk) [NOTE 8. INCOME TAXES](index=11&type=section&id=NOTE%208.%20INCOME%20TAXES) This note addresses deferred income taxes, unrecognized tax benefits, and open tax years, with no unrecognized tax benefits or accrued interest related to uncertain tax positions as of June 30, 2021 - No unrecognized tax benefits as of June 30, 2021, and none expected within 12 months[45](index=45&type=chunk) - Tax years 2016 through 2020 remain open to examination by major taxing jurisdictions[45](index=45&type=chunk) [NOTE 9. LEASES](index=12&type=section&id=NOTE%209.%20LEASES) This note details the company's operating lease for its facility, expiring March 31, 2026, including lease costs, cash paid, remaining term, and future lease liabilities - Operating lease cost was **$42.5 thousand** for the quarter ended June 30, 2021[46](index=46&type=chunk) - Total lease liabilities were **$0.7 million** as of June 30, 2021, with the lease expiring March 31, 2026 (57 months remaining)[46](index=46&type=chunk) [NOTE 10. STOCK REPURCHASE PROGRAM](index=12&type=section&id=NOTE%2010.%20STOCK%20REPURCHASE%20PROGRAM) This note describes the authorized stock repurchase program, which has a remaining authorization of $3.8 million as of June 30, 2021, with no shares repurchased during the first quarter of fiscal 2022 - Remaining authorization for stock repurchases was **$3.8 million** as of June 30, 2021[47](index=47&type=chunk) - No Common Stock was repurchased during the first quarter of fiscal 2022[47](index=47&type=chunk) [NOTE 11. INFORMATION AS TO EMPLOYEE STOCK PURCHASE, SAVINGS, AND SIMILAR PLANS](index=12&type=section&id=NOTE%2011.%20INFORMATION%20AS%20TO%20EMPLOYEE%20STOCK%20PURCHASE%2C%20SAVINGS%2C%20AND%20SIMILAR%20PLANS) This note details the company's 401(k) savings plan, including employee eligibility and employer matching contributions - Employer matching contributions to the 401(k) plan were **$28.6 thousand** for Q1 FY2022, up from **$25.4 thousand** in Q1 FY2021[48](index=48&type=chunk) [NOTE 12. SUBSEQUENT EVENTS](index=12&type=section&id=NOTE%2012.%20SUBSEQUENT%20EVENTS) This note reports a subsequent event where the Board declared a quarterly cash dividend of $1.00 per share, payable in August 2021 - On July 21, 2021, the Board declared a quarterly cash dividend of **$1.00 per share**, payable August 31, 2021[49](index=49&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=13&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial condition and results of operations, including forward-looking statements, a business overview, critical accounting policies, a detailed comparison of the current quarter to the prior year, the impact of COVID-19, and an analysis of liquidity and capital resources [Forward-looking statements](index=13&type=section&id=Forward-looking%20statements) This subsection highlights that the report contains forward-looking statements subject to risks and uncertainties, and actual results may differ materially from projections - The report contains forward-looking statements, identifiable by terms such as 'may,' 'will,' 'expect,' 'anticipate,' 'intend,' 'believe,' 'estimate,' 'should,' or 'continue'[50](index=50&type=chunk) - Actual financial condition, operating results, and business performance may differ materially from projections due to various factors, including reliance on large customers, economic uncertainties, and risks related to future stock repurchases and dividend payments[50](index=50&type=chunk) [General](index=13&type=section&id=General) This subsection reaffirms NVE's core business of developing and selling spintronics-based devices, including sensors and couplers, for data acquisition and transmission - NVE Corporation develops and sells devices that use spintronics nanotechnology, including high-performance spintronic sensors and couplers[52](index=52&type=chunk) [Critical accounting policies](index=13&type=section&id=Critical%20accounting%20policies) This subsection states that critical accounting policies, including investment valuation, inventory valuation, and deferred tax assets estimation, remained unchanged as of June 30, 2021 - Critical accounting policies and estimates include investment valuation, inventory valuation, and deferred tax assets estimation[53](index=53&type=chunk) - No changes to critical accounting policies as of June 30, 2021[53](index=53&type=chunk) [Quarter ended June 30, 2021 compared to quarter ended June 30, 2020](index=14&type=section&id=Quarter%20ended%20June%2030%2C%202021%20compared%20to%20quarter%20ended%20June%2030%2C%202020) This section analyzes the financial performance for the quarter, noting a significant increase in total revenue and net income driven by product sales, despite a decrease in contract R&D revenue and interest income, and a slight decrease in gross profit margin due to revenue mix - Total revenue increased **55.9%** year-over-year, primarily due to a **59.5%** increase in product sales[55](index=55&type=chunk) - Contract research and development revenue decreased **13.5%** due to the completion of certain contracts[55](index=55&type=chunk)[56](index=56&type=chunk) - Gross profit as a percentage of revenue decreased to **75%** from **82%** primarily due to revenue mix[55](index=55&type=chunk)[56](index=56&type=chunk) - Total expenses increased **3.1%**, driven by a **31.4%** increase in selling, general, and administrative expense (due to increased employee compensation), partially offset by an **8.3%** decrease in research and development expense (due to staffing changes and project completion)[55](index=55&type=chunk)[57](index=57&type=chunk) - Net income increased **48.4%** year-over-year, primarily due to the increase in product sales[55](index=55&type=chunk)[58](index=58&type=chunk) - Interest income decreased **27.4%** due to a decrease in available-for-sale securities and lower average interest rates[55](index=55&type=chunk)[58](index=58&type=chunk) [The Impact of the COVID-19 Pandemic](index=14&type=section&id=The%20Impact%20of%20the%20COVID-19%20Pandemic) Management believes the impact of the COVID-19 pandemic on revenue and net income was significantly less in the current quarter compared to the prior year - The impact of the COVID-19 pandemic on total revenue and net income was significantly less in the quarter ended June 30, 2021, compared to the quarter ended June 30, 2020[59](index=59&type=chunk) [Liquidity and Capital Resources](index=15&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's cash position, operating cash flow, investing activities, and financing activities, noting a decrease in cash and cash equivalents due to dividend payments, but substantial operating cash flow and sufficient working capital for the next 12 months - Cash and cash equivalents decreased by **$1.6 million** to **$8.9 million** as of June 30, 2021[61](index=61&type=chunk) - Net cash provided by operating activities was **$3.3 million** for Q1 FY2022[61](index=61&type=chunk)[62](index=62&type=chunk) - Cash used in financing activities was **$4.8 million**, primarily for cash dividends paid to shareholders[61](index=61&type=chunk)[64](index=64&type=chunk) - The company plans significantly more capital expenditures during fiscal 2022 than the **$62.7 thousand** invested in fiscal 2021[63](index=63&type=chunk) - Management believes working capital and cash generated from operations will be adequate for needs for at least the next 12 months[65](index=65&type=chunk) [Item 4. Controls and Procedures](index=16&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the Chief Executive Officer and Chief Financial Officer, evaluated the disclosure controls and procedures and concluded they were effective as of June 30, 2021, with no material changes in internal control over financial reporting during the quarter [Disclosure Controls and Procedures](index=16&type=section&id=Disclosure%20Controls%20and%20Procedures) The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective as of June 30, 2021 - Disclosure controls and procedures were effective as of June 30, 2021[67](index=67&type=chunk) [Changes in Internal Controls](index=16&type=section&id=Changes%20in%20Internal%20Controls) No material changes in internal control over financial reporting occurred during the quarter ended June 30, 2021 - No material changes in internal control over financial reporting during the quarter ended June 30, 2021[68](index=68&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=16&type=section&id=Item%201.%20Legal%20Proceedings) The company is not aware of any material pending or threatened legal proceedings that would have a material adverse impact on its future operations or financial condition - NVE Corporation is not aware of any material pending or threatened legal proceedings[70](index=70&type=chunk) [Item 1A. Risk Factors](index=16&type=section&id=Item%201A.%20Risk%20Factors) There were no material changes to risk factors from the prior 10-K, except for an updated risk factor regarding packaging vendors, highlighting increased lead times, raw material shortages, and operational suspensions at vendors due to COVID-19 restrictions, particularly in India and Malaysia, and potential future flooding risks - No material changes to risk factors from the Annual Report on Form 10-K, except for a revised risk factor concerning packaging vendors[71](index=71&type=chunk) - The updated risk factor details supply chain disruptions due to COVID-19, including increased lead times, raw material shortages, and factory suspensions/lockdowns at vendors in India and Malaysia[71](index=71&type=chunk) - Challenges include the expense and time of converting to alternate vendors and the risk of losing work-in-process or finished goods during disruptions[71](index=71&type=chunk) [Item 4. Mine Safety Disclosures](index=16&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to NVE Corporation - Mine Safety Disclosures are not applicable to NVE Corporation[72](index=72&type=chunk) [Item 6. Exhibits](index=17&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including certifications by the CEO and CFO, and various Inline XBRL documents - Exhibits include certifications by Daniel A. Baker (CEO) and Curt A. Reynders (CFO) (Exhibits 31.1, 31.2, 32)[74](index=74&type=chunk) - Various Inline XBRL documents are also filed (Exhibits 101.INS, 101.SCH, 101.CAL, 101.DEF, 101.LAB, 101.PRE, 104)[74](index=74&type=chunk) [SIGNATURES](index=18&type=section&id=SIGNATURES) The report is duly signed on behalf of NVE Corporation by Daniel A. Baker (President and Chief Executive Officer) and Curt A. Reynders (Chief Financial Officer) on July 21, 2021 - The report was signed by Daniel A. Baker, President and Chief Executive Officer, and Curt A. Reynders, Chief Financial Officer, on July 21, 2021[77](index=77&type=chunk)

NVE Corp (NASDAQ:NVEC) Q4 2021 Earnings Conference Call May 5, 2021 5:00 PM ET Company Participants Daniel Baker - CEO, President & Director Curt Reynders - CFO, Treasurer & Secretary Conference Call Participants Jeffrey Bernstein - Cowen Daniel Baker Good afternoon and welcome to our conference call for the quarter and fiscal year ended March 31, 2021. This is Dan Baker, President and CEO of NVE Corporation. As always, I'm joined by Curt Reynders, our Chief Financial Officer. This call is being webcast liv ...

Financial Performance - Total revenue for fiscal 2021 decreased by 16% compared to fiscal 2020, primarily due to a 16% decrease in product sales and an 18% decrease in contract research and development revenue [99]. - Net income for fiscal 2021 was 54.7% of total revenue, down from 57.2% in fiscal 2020, reflecting a 19.5% decrease year-over-year [101]. - The impact of the COVID-19 pandemic significantly affected total revenue and net income for fiscal 2021, particularly in the medical devices sector [102]. Cash Flow and Liquidity - Cash and cash equivalents increased to $10,427,340 as of March 31, 2021, up from $8,065,594 as of March 31, 2020, driven by $13,364,832 in net cash provided by operating activities [103]. - Net cash provided by operating activities was $13,364,832 for fiscal 2021, compared to $15,895,773 for fiscal 2020, indicating a decrease in cash flow from operations [104]. - The company plans to pay a cash dividend of $1.00 per share, totaling $4,833,232, to be paid on May 31, 2021, subject to Board approval [109]. Expenses and Taxation - Research and development expenses decreased by 14% in fiscal 2021, attributed to the completion of certain new-product development projects [100]. - The effective tax rate for fiscal 2021 was 18% of income before taxes, compared to 16% for fiscal 2020, reflecting changes in tax benefits [101]. Accounts Receivable and Deferred Tax Assets - Accounts receivable decreased by $729,737, primarily due to the timing of sales to and payments from customers [105]. - The company had $73,538 in net deferred tax assets as of March 31, 2021, down from $108,119 as of March 31, 2020 [97].

Financial Data and Key Metrics Changes - The company reported a 1% increase in total revenue for the quarter ended December 31, 2020, driven by a 3% increase in product sales, despite a 34% decrease in contract R&D revenue [6][10] - Net income increased by 5% to $3.93 million, or $0.81 per diluted share, compared to $3.73 million, or $0.77 last year [5][8] - Total revenue increased 49% sequentially compared to the previous quarter, and net income increased 77% [7] - Gross margin reached a record 84%, and net margin was a record 60% [9] Business Line Data and Key Metrics Changes - Product sales increased by 3%, while contract R&D revenue decreased by 34% due to the completion of certain contracts [6] - Expenses decreased by 8% year-over-year, attributed to a 9% decrease in R&D and a 5% decrease in SG&A [7] Market Data and Key Metrics Changes - The company noted that the effects of the COVID-19 pandemic on its business appear to be subsiding, with a strong outlook for the worldwide semiconductor market and elective medical devices [21][22] Company Strategy and Development Direction - The company is focusing on new sensors and coupler products, with improvements to existing products, particularly in the IL700 Series line of spintronic couplers [12][16] - The company is targeting upgraded parts for electric vehicles and charging stations, working closely with its German distributor [13][14] - The company aims to enhance shareholder value through dividends and stock repurchases, returning over $20 million to shareholders in the calendar year [16] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the current quarter, noting that orders have been pulled in, leading to better-than-expected results [22] - There is a recognition of potential threats and opportunities due to lengthened lead times for some raw materials, but the company is well-positioned to manage these challenges [24][26] - The company sees potential in the hearing aid market and anticipates growth in the over-the-counter hearing aid segment once FDA regulations are finalized [45][47] Other Important Information - The company paid a $1 per share dividend in the past quarter and announced another quarterly dividend of $1 per share payable on February 26 [9] - The company has a strong balance sheet with cash plus marketable securities of $65.8 million as of December 31 [11] Q&A Session Summary Question: Can you walk us through cancellations, push outs, and pull-ins over the last couple of quarters? - Management noted that the effects of the pandemic appear to be subsiding, with a strong outlook for the semiconductor market and improved orders being pulled in during the third quarter [21][22] Question: How does the company manage inventory and potential shortages? - The company has not experienced significant material shortages but is building inventories of critical raw materials to address potential threats and opportunities [24][26] Question: Can you discuss the PUF business and its outlook? - The PUF business remains significant, with intermittent orders expected, and is seen as strategically important for building intellectual property [38][40] Question: What is the outlook for the hearing aid market? - The hearing aid market is viewed as important, with expectations for growth once FDA regulations are finalized, and the company has early-stage design wins in this space [45][47]

PART I. FINANCIAL INFORMATION Presents NVE Corporation's unaudited financial statements and related notes [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) Presents NVE Corporation's unaudited financial statements, including balance sheets, income, comprehensive income, equity, cash flows, and detailed notes [Balance Sheets](index=3&type=section&id=Balance%20Sheets) Summarizes NVE Corporation's financial position, detailing assets, liabilities, and shareholders' equity at specific dates Balance Sheet Summary | ASSETS (Unaudited) | Dec 31, 2020 ($) | Mar 31, 2020 ($) | | :------------------- | :----------- | :----------- | | Cash and cash equivalents | $13,988,308 | $8,065,594 | | Marketable securities, short-term | $11,115,094 | $19,084,814 | | Total current assets | $32,677,205 | $34,384,711 | | Net fixed assets | $366,068 | $582,467 | | Marketable securities, long-term | $40,656,967 | $43,606,495 | | Total assets | $74,420,858 | $79,498,150 | | **LIABILITIES AND SHAREHOLDERS' EQUITY** | | | | Total current liabilities | $748,944 | $796,201 | | Total liabilities | $1,452,139 | $1,502,801 | | Total shareholders' equity | $72,968,719 | $77,995,349 | [Statements of Income (Quarterly)](index=4&type=section&id=Statements%20of%20Income%20for%20the%20Quarters%20Ended%20December%2031%2C%202020%20and%202019) Details NVE Corporation's financial performance for the quarter, including revenue, expenses, and net income Quarterly Income Statement Summary | Metric | Quarter Ended Dec 31, 2020 ($) | Quarter Ended Dec 31, 2019 ($) | Change (YoY) (%) | | :----------------------------- | :------------------------- | :------------------------- | :----------- | | Product sales | $6,332,349 | $6,160,967 | +2.8% | | Contract research and development | $201,013 | $303,629 | -33.8% | | Total revenue | $6,533,362 | $6,464,596 | +1.1% | | Gross profit | $5,458,314 | $5,200,790 | +5.0% | | Income from operations | $4,444,742 | $4,101,333 | +8.4% | | Net income | $3,925,709 | $3,730,664 | +5.2% | | Net income per share – basic | $0.81 | $0.77 | +5.2% | | Cash dividends declared per common share | $1.00 | $1.00 | 0% | [Statements of Comprehensive Income (Quarterly)](index=4&type=section&id=Statements%20of%20Comprehensive%20Income%20for%20the%20Quarters%20Ended%20December%2031%2C%202020%20and%202019) Presents NVE Corporation's comprehensive income, including net income and other comprehensive income items for the quarter Quarterly Comprehensive Income Summary | Metric | Quarter Ended Dec 31, 2020 ($) | Quarter Ended Dec 31, 2019 ($) | | :------------------------------------ | :------------------------- | :------------------------- | | Net income | $3,925,709 | $3,730,664 | | Unrealized (loss) gain from marketable securities, net of tax | $(145,452) | $31,237 | | Comprehensive income | $3,780,257 | $3,761,901 | [Statements of Income (Nine Months)](index=5&type=section&id=Statements%20of%20Income%20for%20the%20Nine%20Months%20Ended%20December%2031%2C%202020%20and%202019) Details NVE Corporation's financial performance for the nine-month period, including revenue, expenses, and net income Nine-Month Income Statement Summary | Metric | Nine Months Ended Dec 31, 2020 ($) | Nine Months Ended Dec 31, 2019 ($) | Change (YoY) (%) | | :----------------------------- | :----------------------------- | :----------------------------- | :----------- | | Product sales | $14,850,157 | $18,434,039 | -19.4% | | Contract research and development | $653,252 | $827,198 | -21.0% | | Total revenue | $15,503,409 | $19,261,237 | -19.5% | | Gross profit | $12,650,652 | $15,559,296 | -18.7% | | Income from operations | $9,226,939 | $11,861,717 | -22.2% | | Net income | $8,559,914 | $11,160,145 | -23.3% | | Net income per share – basic | $1.77 | $2.30 | -23.0% | | Cash dividends declared per common share | $3.00 | $3.00 | 0% | [Statements of Comprehensive Income (Nine Months)](index=5&type=section&id=Statements%20of%20Comprehensive%20Income%20for%20the%20Nine%20Months%20Ended%20December%2031%2C%202020%20and%202019) Presents NVE Corporation's comprehensive income, including net income and other comprehensive income items for the nine-month period Nine-Month Comprehensive Income Summary | Metric | Nine Months Ended Dec 31, 2020 ($) | Nine Months Ended Dec 31, 2019 ($) | | :------------------------------------ | :----------------------------- | :----------------------------- | | Net income | $8,559,914 | $11,160,145 | | Unrealized gain from marketable securities, net of tax | $966,886 | $780,016 | | Comprehensive income | $9,526,800 | $11,940,161 | [Statements of Shareholders' Equity (Dec 31, 2020)](index=6&type=section&id=Statements%20of%20Shareholders%27%20Equity%20for%20the%20Period%20Ended%20December%2031%2C%202020) Outlines changes in NVE Corporation's shareholders' equity for the period ended December 31, 2020 Shareholders' Equity Summary (Dec 31, 2020) | Metric | As of Mar 31, 2020 ($) | As of Dec 31, 2020 ($) | | :----------------------------- | :----------------- | :----------------- | | Total Shareholders' Equity | $77,995,349 | $72,968,719 | | Retained Earnings | $58,046,520 | $52,103,126 | | Accumulated Other Comprehensive Income | $516,523 | $1,483,409 | | Cash Dividends Declared (Q1, Q2, Q3) | $(4,835,038) (Q1) | $(4,833,232) (Q3) | | Repurchase of Common Stock | - | $(91,419) (Q2) | [Statements of Shareholders' Equity (Dec 31, 2019)](index=7&type=section&id=Statements%20of%20Shareholders%27%20Equity%20for%20the%20Period%20Ended%20December%2031%2C%202019) Outlines changes in NVE Corporation's shareholders' equity for the period ended December 31, 2019 Shareholders' Equity Summary (Dec 31, 2019) | Metric | As of Mar 31, 2019 ($) | As of Dec 31, 2019 ($) | | :----------------------------- | :----------------- | :----------------- | | Total Shareholders' Equity | $82,780,211 | $80,230,702 | | Retained Earnings | $62,903,918 | $59,526,033 | | Accumulated Other Comprehensive Income | $(82,725) | $697,291 | | Cash Dividends Declared (Q1, Q2, Q3) | $(4,846,010) (Q1) | $(4,846,010) (Q3) | [Statements of Cash Flows](index=8&type=section&id=Statements%20of%20Cash%20Flows) Summarizes NVE Corporation's cash inflows and outflows from operating, investing, and financing activities Cash Flow Summary | Cash Flow Activity | Nine Months Ended Dec 31, 2020 ($) | Nine Months Ended Dec 31, 2019 ($) | | :------------------------------------ | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $8,531,068 | $12,536,305 | | Cash provided by investing activities | $11,986,373 | $5,277,594 | | Cash used in financing activities | $(14,594,727) | $(14,538,030) | | Increase in cash and cash equivalents | $5,922,714 | $3,275,869 | | Cash and cash equivalents at end of period | $13,988,308 | $10,153,173 | [Notes to Financial Statements](index=9&type=section&id=Notes%20to%20Financial%20Statements) Provides detailed explanations of NVE Corporation's accounting policies and specific financial statement items [NOTE 1. DESCRIPTION OF BUSINESS](index=9&type=section&id=NOTE%201.%20DESCRIPTION%20OF%20BUSINESS) Describes NVE Corporation's core business, focusing on spintronics-based devices and nanotechnology - NVE Corporation develops and sells devices utilizing spintronics, a nanotechnology based on electron spin for information acquisition, storage, and transmission. The company manufactures high-performance spintronic products, including sensors and couplers[30](index=30&type=chunk) [NOTE 2. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES](index=9&type=section&id=NOTE%202.%20BASIS%20OF%20PRESENTATION%20AND%20SIGNIFICANT%20ACCOUNTING%20POLICIES) Outlines NVE Corporation's financial statement preparation basis and key accounting policies, including revenue recognition - Financial statements are prepared in accordance with GAAP and SEC rules, reflecting normal and recurring adjustments[31](index=31&type=chunk)[32](index=32&type=chunk) - Revenue is recognized upon transfer of control of products or services, disaggregated into product sales (point in time) and contract research and development (over time)[33](index=33&type=chunk)[34](index=34&type=chunk) - Performance obligations for product sales and contract R&D are satisfied within one year or less[36](index=36&type=chunk) - The company uses practical expedients not to disclose the value of unsatisfied performance obligations or assess significant financing components for contracts under one year[36](index=36&type=chunk) [NOTE 3. RECENTLY ISSUED ACCOUNTING STANDARDS](index=10&type=section&id=NOTE%203.%20RECENTLY%20ISSUED%20ACCOUNTING%20STANDARDS) Discusses the impact of recently issued accounting standards on NVE Corporation's financial reporting - ASU No. 2019-12 (Income Taxes) is effective for fiscal 2022; no significant impact is expected[37](index=37&type=chunk) - ASU No. 2016-13 (Credit Losses) is effective for fiscal 2024 for Smaller Reporting Companies like NVE, with no significant impact anticipated[38](index=38&type=chunk) [NOTE 4. NET INCOME PER SHARE](index=10&type=section&id=NOTE%204.%20NET%20INCOME%20PER%20SHARE) Details the calculation of NVE Corporation's basic and diluted net income per share Net Income Per Share Details | Metric | Quarter Ended Dec 31, 2020 | Quarter Ended Dec 31, 2019 | | :------------------------------------ | :------------------------- | :------------------------- | | Weighted average common shares outstanding – basic | 4,833,232 | 4,846,010 | | Dilutive effect of stock options | 29 | 1,426 | | Shares used in computing net income per share – diluted | 4,833,261 | 4,847,436 | | Metric | Nine Months Ended Dec 31, 2020 | Nine Months Ended Dec 31, 2019 | | :------------------------------------ | :----------------------------- | :----------------------------- | | Weighted average common shares outstanding – basic | 4,834,324 | 4,846,010 | | Dilutive effect of stock options | 87 | 2,496 | | Shares used in computing net income per share – diluted | 4,834,411 | 4,848,506 | [NOTE 5. FAIR VALUE OF FINANCIAL INSTRUMENTS](index=11&type=section&id=NOTE%205.%20FAIR%20VALUE%20OF%20FINANCIAL%20INSTRUMENTS) Provides information on the fair value measurement of NVE Corporation's financial instruments, primarily marketable securities - Corporate bonds and money market funds are classified as available-for-sale securities and carried at estimated fair value, with unrealized gains/losses in accumulated other comprehensive income[41](index=41&type=chunk) - These securities represented approximately **88% of total assets** as of December 31, 2020[43](index=43&type=chunk) Fair Value of Financial Instruments Summary | Fair Value Category | As of Dec 31, 2020 ($) | As of Mar 31, 2020 ($) | | :------------------ | :----------------- | :----------------- | | Money market funds (Level 1) | $13,921,961 | $7,903,433 | | Corporate bonds (Level 2) | $51,772,061 | $62,691,309 | | Total | $65,694,022 | $70,594,742 | Available-for-Sale Securities Details | Available-for-Sale Securities | Amortized Cost (Dec 31, 2020) ($) | Estimated Fair Value (Dec 31, 2020) ($) | Gross Unrealized Gains (Dec 31, 2020) ($) | | :---------------------------- | :---------------------------- | :---------------------------------- | :------------------------------------ | | Money market funds | $13,921,961 | $13,921,961 | $0 | | Corporate bonds | $49,873,178 | $51,772,061 | $1,898,883 | | Total | $63,795,139 | $65,694,022 | $1,898,883 | [NOTE 6. INVENTORIES](index=12&type=section&id=NOTE%206.%20INVENTORIES) Details the composition and valuation of NVE Corporation's inventory, including raw materials, WIP, and finished goods Inventory Composition | Inventory Category | Dec 31, 2020 ($) | Mar 31, 2020 ($) | | :----------------- | :----------- | :----------- | | Raw materials | $839,102 | $1,017,451 | | Work in process | $1,959,692 | $1,863,000 | | Finished goods | $1,043,683 | $1,003,999 | | Total inventories | $3,842,477 | $3,884,450 | [NOTE 7. STOCK-BASED COMPENSATION](index=12&type=section&id=NOTE%207.%20STOCK-BASED%20COMPENSATION) Reports NVE Corporation's stock-based compensation expense for the specified periods Stock-Based Compensation Expense | Period | Stock-based Compensation Expense ($) | | :------------------------------------ | :------------------------------- | | Third quarter of fiscal 2021 (Dec 31, 2020) | $4,275 | | First nine months of fiscal 2021 (Dec 31, 2020) | $41,297 | | First nine months of fiscal 2020 (Dec 31, 2019) | $48,360 | | Third quarter of fiscal 2020 (Dec 31, 2019) | $0 | [NOTE 8. INCOME TAXES](index=12&type=section&id=NOTE%208.%20INCOME%20TAXES) Explains NVE Corporation's income tax accounting, including deferred taxes and unrecognized tax benefits - Deferred income taxes reflect temporary differences between financial reporting and tax amounts[49](index=49&type=chunk) - The company had no unrecognized tax benefits as of December 31, 2020, and does not expect significant changes within 12 months[50](index=50&type=chunk) - Tax years 2016-2019 remain open for examination[50](index=50&type=chunk) [NOTE 9. LEASES](index=12&type=section&id=NOTE%209.%20LEASES) Details NVE Corporation's lease arrangements, including lease costs and liabilities - NVE operates in a leased facility under a non-cancellable lease expiring March 31, 2026[51](index=51&type=chunk) - Lease expense is recognized straight-line, and the incremental borrowing rate (**3.5%**) is used for present value calculations[51](index=51&type=chunk) Lease Cost and Liabilities | Lease Cost | Quarter Ended Dec 31, 2020 ($) | Nine Months Ended Dec 31, 2020 ($) | | :-------------------- | :------------------------- | :----------------------------- | | Operating lease cost | $38,641 | $115,923 | | Variable lease cost | $30,608 | $91,824 | | Total lease cost | $69,249 | $207,747 | | Total lease liabilities (as of Dec 31, 2020) | | $720,618 | | Remaining lease term (as of Dec 31, 2020) | 63 months | | [NOTE 10. STOCK REPURCHASE PROGRAM](index=13&type=section&id=NOTE%2010.%20STOCK%20REPURCHASE%20PROGRAM) Describes NVE Corporation's authorized stock repurchase program and remaining authorization - The Board of Directors authorized a stock repurchase program, with **$3,762,040 remaining authorization** as of December 31, 2020[52](index=52&type=chunk) - The program has no expiration date and is financed by operating activities or maturing marketable securities[52](index=52&type=chunk) [NOTE 11. INFORMATION AS TO EMPLOYEE STOCK PURCHASE, SAVINGS, AND SIMILAR PLANS](index=13&type=section&id=NOTE%2011.%20INFORMATION%20AS%20TO%20EMPLOYEE%20STOCK%20PURCHASE%2C%20SAVINGS%2C%20AND%20SIMILAR%20PLANS) Outlines NVE Corporation's employee 401(k) savings plan and matching contributions - All employees are eligible for the 401(k) savings plan, with the company matching **100% of the first 3% of salary deferral contributions**[53](index=53&type=chunk) - Matching contributions were **$22,571 for Q3 FY2021** and **$69,227 for the first nine months of FY2021**[53](index=53&type=chunk) [NOTE 12. SUBSEQUENT EVENTS](index=13&type=section&id=NOTE%2012.%20SUBSEQUENT%20EVENTS) Reports significant events occurring after the balance sheet date, such as dividend declarations - On January 20, 2021, the Board declared a quarterly cash dividend of **$1.00 per share**, payable February 26, 2021, to shareholders of record as of February 1, 2021[54](index=54&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=14&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management's analysis of NVE Corporation's financial condition, operating results, liquidity, and capital resources, including COVID-19 impact [Forward-looking statements](index=14&type=section&id=Forward-looking%20statements) Highlights forward-looking statements and associated risks that could cause actual results to differ - The report contains forward-looking statements subject to safe harbor provisions[56](index=56&type=chunk) - Actual results may differ due to factors like reliance on large customers, economic uncertainties, future sales, COVID-19 risks, and uncertainties related to stock repurchases and dividends[56](index=56&type=chunk) [General](index=14&type=section&id=General) Provides a general overview of NVE Corporation's business and product offerings - NVE Corporation develops and sells spintronics-based devices, including high-performance sensors and couplers, utilizing nanotechnology that relies on electron spin[58](index=58&type=chunk) [Critical accounting policies](index=14&type=section&id=Critical%20accounting%20policies) Identifies NVE Corporation's critical accounting policies and estimates impacting financial reporting - Critical accounting policies and estimates as of December 31, 2020, include investment valuation, inventory valuation, and deferred tax assets estimation[59](index=59&type=chunk) [Quarter ended December 31, 2020 compared to quarter ended December 30, 2019](index=15&type=section&id=Quarter%20ended%20December%2031%2C%202020%20compared%20to%20quarter%20ended%20December%2030%2C%202019) Compares NVE Corporation's financial performance for the quarter ended December 31, 2020, against the prior year Quarterly Financial Performance Comparison | Metric | Q3 FY2021 (Dec 31, 2020) | Q3 FY2020 (Dec 31, 2019) | Quarter-to-Quarter Change | | :----------------------------- | :----------------------- | :----------------------- | :------------------------ | | Total revenue | $6,533,362 | $6,464,596 | +1.1% | | Product sales | 96.9% of revenue | 95.3% of revenue | +2.8% | | Contract R&D | 3.1% of revenue | 4.7% of revenue | -33.8% | | Gross profit margin | 83.5% | 80.5% | +5.0% | | Total expenses | 15.5% of revenue | 17.1% of revenue | -7.8% | | Income from operations | 68.0% of revenue | 63.4% of revenue | +8.4% | | Interest income | 5.6% of revenue | 6.9% of revenue | -17.6% | | Net income | 60.1% of revenue | 57.7% of revenue | +5.2% | - The increase in product sales was primarily due to increased purchases by existing customers[61](index=61&type=chunk) - The decrease in contract R&D revenue was due to the completion of certain contracts[61](index=61&type=chunk) - Gross profit margin increased to **84%** due to a more profitable revenue mix[62](index=62&type=chunk) - Total expenses decreased by **8%** due to a **9% decrease in R&D expense** (completion of product development) and a **5% decrease in SG&A** (staffing changes)[63](index=63&type=chunk) - Interest income decreased by **18%** due to lower marketable securities and money market funds balances, and decreased average interest rates[64](index=64&type=chunk) [Nine months ended December 31, 2020 compared to nine months ended December 31, 2019](index=16&type=section&id=Nine%20months%20ended%20December%2031%2C%202020%20compared%20to%20nine%20months%20ended%20December%2031%2C%202019) Compares NVE Corporation's financial performance for the nine months ended December 31, 2020, against the prior year Nine-Month Financial Performance Comparison | Metric | Nine Months Ended Dec 31, 2020 | Nine Months Ended Dec 31, 2019 | Period-to-Period Change | | :----------------------------- | :----------------------------- | :----------------------------- | :---------------------- | | Total revenue | $15,503,409 | $19,261,237 | -19.5% | | Product sales | 95.8% of revenue | 95.7% of revenue | -19.4% | | Contract R&D | 4.2% of revenue | 4.3% of revenue | -21.0% | | Gross profit | 81.6% of revenue | 80.8% of revenue | -18.7% | | Total expenses | 22.1% of revenue | 19.2% of revenue | -7.4% | | Income from operations | 59.5% of revenue | 61.6% of revenue | -22.2% | | Interest income | 7.5% of revenue | 7.0% of revenue | -14.2% | | Net income | 55.2% of revenue | 57.9% of revenue | -23.3% | - The decrease in total revenue was due to a **19% decrease in product sales** (decreased purchase volumes by existing customers) and a **21% decrease in contract R&D revenue** (completion of certain contracts)[66](index=66&type=chunk)[67](index=67&type=chunk) - Total expenses decreased by **7%** primarily due to a **10% decrease in R&D expense**, also attributed to the completion of certain product development activities[68](index=68&type=chunk) - Interest income decreased by **14%** due to lower marketable securities and money market funds balances, and decreased average interest rates[69](index=69&type=chunk) [The Impact of the COVID-19 Pandemic](index=16&type=section&id=The%20Impact%20of%20the%20COVID-19%20Pandemic) Assesses the COVID-19 pandemic's impact on NVE Corporation's revenue, net income, and market conditions - The COVID-19 pandemic significantly impacted total revenue and net income for the nine months ended December 31, 2020, particularly affecting market conditions in industries like medical devices[70](index=70&type=chunk) - However, the effects on the business are believed to have subsided in the quarter ended December 31, 2020[70](index=70&type=chunk) [Liquidity and Capital Resources](index=17&type=section&id=Liquidity%20and%20Capital%20Resources) Discusses NVE Corporation's cash position, working capital, and ability to meet future financial obligations - Cash and cash equivalents increased by **$5,922,714** to **$13,988,308** as of December 31, 2020, from $8,065,594 as of March 31, 2020[71](index=71&type=chunk) - This increase was driven by operating and investing activities, partially offset by financing activities[71](index=71&type=chunk) - Management believes current working capital and cash from operations will be adequate for needs for at least the next 12 months[74](index=74&type=chunk) [Investing Activities](index=17&type=section&id=Investing%20Activities) Details NVE Corporation's cash flows from investing activities, primarily marketable securities and fixed assets - Cash provided by investing activities for the nine months ended December 31, 2020, was **$11,986,373**, primarily from **$12,000,000 in marketable security maturities**, partially offset by **$13,627 in fixed asset purchases**[72](index=72&type=chunk) [Financing Activities](index=17&type=section&id=Financing%20Activities) Outlines NVE Corporation's cash flows from financing activities, including dividends and stock repurchases - Cash used in financing activities for the first nine months of fiscal 2021 totaled **$14,594,727**, including **$14,503,308 in cash dividends** and **$91,419 for common stock repurchases**[73](index=73&type=chunk) - A quarterly cash dividend of **$1.00 per share** was declared on January 20, 2021, to be paid on February 26, 2021[73](index=73&type=chunk) - Future dividends are subject to Board approval and various financial and operational factors[73](index=73&type=chunk) [Off-Balance-Sheet Arrangements](index=17&type=section&id=Off-Balance-Sheet%20Arrangements) Describes NVE Corporation's off-balance-sheet arrangements, such as purchase commitments - Off-balance-sheet arrangements consist of purchase commitments, which are not expected to have a material current or anticipated future effect on profitability, cash flows, or financial position[75](index=75&type=chunk) [Item 4. Controls and Procedures](index=18&type=section&id=Item%204.%20Controls%20and%20Procedures) Management's evaluation of NVE Corporation's disclosure controls and internal control over financial reporting [Disclosure Controls and Procedures](index=18&type=section&id=Disclosure%20Controls%20and%20Procedures) Reports on the effectiveness of NVE Corporation's disclosure controls and procedures as of December 31, 2020 - Management, with CEO and CFO participation, concluded that disclosure controls and procedures were effective as of December 31, 2020[77](index=77&type=chunk) [Changes in Internal Controls](index=18&type=section&id=Changes%20in%20Internal%20Controls) Confirms no material changes in NVE Corporation's internal control over financial reporting during the quarter - There were no material changes in internal control over financial reporting during the quarter ended December 31, 2020[78](index=78&type=chunk) PART II. OTHER INFORMATION Presents additional information not covered in the financial statements, including legal proceedings, risk factors, and exhibits [Item 1. Legal Proceedings](index=18&type=section&id=Item%201.%20Legal%20Proceedings) Confirms NVE Corporation is not involved in any material legal proceedings or governmental actions - NVE is not aware of any material pending or threatened legal proceedings or governmental actions expected to have a material adverse impact on future results of operations and financial condition[80](index=80&type=chunk) [Item 1A. Risk Factors](index=18&type=section&id=Item%201A.%20Risk%20Factors) Updates NVE Corporation's risk factors, particularly regarding COVID-19's impact on supply chain and operations - No material changes to risk factors from the Annual Report on Form 10-K, except for updates regarding the effects of the COVID-19 pandemic[81](index=81&type=chunk) - Risks include reliance on packaging vendors, potential supply interruptions due to unique product requirements, vendor business decisions, acts of God (including pandemics), increased lead times, and raw material shortages during COVID-19[81](index=81&type=chunk) - Public health crises, such as COVID-19, could adversely affect operations and financial results, leading to delayed or canceled customer orders, potential curtailment of operations due to employee infections, or disruptions from customers/suppliers[82](index=82&type=chunk) [Item 4. Mine Safety Disclosures](index=18&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable - This item is not applicable[83](index=83&type=chunk) [Item 6. Exhibits](index=19&type=section&id=Item%206.%20Exhibits) Lists exhibits filed with the Form 10-Q, including agreements, certifications, and XBRL documents - Exhibits include Amendment No. 6 to Supplier Partnering Agreement with Abbott, Certifications by Daniel A. Baker and Curt A. Reynders (Rule 13a-14(a)/15d-14(a) and 18 U.S.C. Section 1350), and various XBRL Taxonomy Extension Documents[84](index=84&type=chunk)[86](index=86&type=chunk) [SIGNATURES](index=20&type=section&id=SIGNATURES) Contains official signatures of NVE Corporation's authorized officers, certifying the quarterly report filing - The report was signed on January 20, 2021, by Daniel A. Baker, President and Chief Executive Officer, and Curt A. Reynders, Chief Financial Officer[89](index=89&type=chunk)

NVE Corporation (NASDAQ:NVEC) Q2 2021 Earnings Conference Call October 21, 2020 5:00 PM ET Company Participants Daniel Baker ??? President and Chief Executive Officer Curt Reynders ??? Chief Financial Officer Conference Call Participants Jeff Bernstein ??? Cowen Operator Ladies and gentlemen, thank you for standing by, and welcome to the NVE Conference Call on Second Quarter Results. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer ...

10-Q 1 NVE_Q2_FY2021_10Q.htm QUARTERLY REPORT FOR THE PERIOD ENDED SEPT. 30, 2020 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2020 or [ ] 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 ...

Financial Data and Key Metrics Changes - Revenue for the quarter ended June 30, 2020, decreased by 27% compared to the prior year, primarily due to a 28% decrease in product sales, partially offset by a 10% increase in contract R&D revenue [4][6] - Net income for the quarter was $2.41 million or $0.50 per diluted share, down from $3.61 million or $0.74 last year, with comprehensive income decreasing only 13% to $3.65 million [9][10] - Cash flow from operations was $3.17 million, compared to $4.54 million in the same quarter last year [10] - The balance sheet remains strong, with cash plus marketable securities decreasing slightly to $70.6 million as of June 30, compared to $70.8 million as of March 31 [11] Business Line Data and Key Metrics Changes - Product sales decreased by 28%, while contract R&D revenue increased by 10% due to the timing of contract completion [6] - R&D expenses decreased by 9%, while SG&A expenses increased by 8% due to staffing changes for more sales activities [7][8] Market Data and Key Metrics Changes - The company expects two more quarters with significant revenue decreases due to delayed orders from important customers, especially in the medical device sector [7] - The pandemic has significantly impacted medical device markets, as many elective procedures were postponed [6] Company Strategy and Development Direction - The company is focused on preserving its workforce, continuing to invest in new product development, and maintaining generous dividends despite the pandemic [5] - New product launches included a high-field TMR magnetic sensor and new power conversion products, indicating ongoing innovation [12][14] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the significant impact of the COVID-19 pandemic but expressed optimism about the long-term future, particularly in critical sectors like medical devices and automation [4][5] - The company is positioned to recover some lost business once the pandemic subsides, with hopes for recovery in early 2021 [7] Other Important Information - The company launched four new products during the quarter, demonstrating a commitment to innovation despite challenges [12] - The annual shareholders meeting will be held via webcast on August 6, 2020 [19] Q&A Session Summary Question: Update on automotive developments and bacteria sensors - Management is working on automotive projects, specifically a current sensor for hybrid electric vehicles, which has a lengthy approval process [28] - Challenges remain with the optimal biochemistry for bacteria sensors, but the technology has potential applications in food safety and medical diagnostics [30][32] Question: Hearing aid market updates - No new wins reported, but the company continues to invest in technology for the hearing aid market, which is expected to grow post-pandemic [44][45] Question: Visibility on PUF orders from military - Interest in Physical Unclonable Functions (PUFs) remains, with ongoing investment in anti-tamper systems for military applications [62] Question: Tax rate expectations - The expected tax rate for the rest of the fiscal year is in the 17% to 18% range [63]

PART I. FINANCIAL INFORMATION [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) For Q1 FY2021, NVE Corporation experienced a year-over-year decline in total revenue and net income, with cash decreasing due to dividend payments surpassing operational cash flow [Balance Sheets](index=3&type=section&id=Balance%20Sheets) Balance Sheet Summary (as of June 30, 2020) | Balance Sheet Item | June 30, 2020 | March 31, 2020 | | :--- | :--- | :--- | | **Total Current Assets** | $32,542,188 | $34,384,711 | | **Total Assets** | **$78,882,332** | **$79,498,150** | | **Total Current Liabilities** | $1,199,336 | $796,201 | | **Total Liabilities** | **$2,064,787** | **$1,502,801** | | **Total Shareholders' Equity** | **$76,817,545** | **$77,995,349** | [Statements of Income](index=4&type=section&id=Statements%20of%20Income) Income Statement Summary (for the Quarter Ended June 30) | Metric | 2020 | 2019 | Change | | :--- | :--- | :--- | :--- | | Product Sales | $4,358,635 | $6,085,364 | -28.4% | | **Total Revenue** | **$4,589,262** | **$6,294,696** | **-27.1%** | | Gross Profit | $3,752,840 | $5,202,659 | -27.9% | | Income from Operations | $2,516,846 | $3,899,583 | -35.5% | | **Net Income** | **$2,411,865** | **$3,607,419** | **-33.1%** | | **Net Income Per Share (Diluted)** | **$0.50** | **$0.74** | **-32.4%** | [Statements of Comprehensive Income](index=4&type=section&id=Statements%20of%20Comprehensive%20Income) Comprehensive Income Summary (for the Quarter Ended June 30) | Metric | 2020 | 2019 | | :--- | :--- | :--- | | Net Income | $2,411,865 | $3,607,419 | | Unrealized gain from marketable securities, net of tax | $1,242,662 | $570,063 | | **Comprehensive Income** | **$3,654,527** | **$4,177,482** | [Statements of Shareholders' Equity](index=5&type=section&id=Statements%20of%20Shareholders'%20Equity) - Shareholders' equity decreased from **$78.0 million** on March 31, 2020, to **$76.8 million** on June 30, 2020, primarily driven by **$4.84 million** in cash dividend payments, partially offset by **$3.65 million** in total comprehensive income for the quarter[19](index=19&type=chunk) [Statements of Cash Flows](index=7&type=section&id=Statements%20of%20Cash%20Flows) Cash Flow Summary (for the Quarter Ended June 30) | Cash Flow Activity | 2020 | 2019 | | :--- | :--- | :--- | | Net cash provided by operating activities | $3,172,427 | $4,537,628 | | Cash provided by investing activities | $0 | $6,470,370 | | Cash used in financing activities | ($4,835,038) | ($4,846,010) | | **Net (Decrease) Increase in Cash** | **($1,662,611)** | **$6,161,988** | [Notes to Financial Statements](index=8&type=section&id=Notes%20to%20Financial%20Statements) - The company develops and sells devices using spintronics, a nanotechnology that relies on electron spin to acquire, store, and transmit information[28](index=28&type=chunk) - Revenue from product sales is recognized upon shipment or delivery, while contract research and development revenue is recognized over time as work is completed[31](index=31&type=chunk)[32](index=32&type=chunk) - As of June 30, 2020, the company held **$70.3 million** in available-for-sale securities (corporate bonds and money market funds), which constituted approximately **89%** of its total assets[39](index=39&type=chunk)[41](index=41&type=chunk) - The company's stock repurchase program had a remaining authorization of **$3,853,459** as of June 30, 2020, with no shares repurchased during the first quarter of fiscal 2021[50](index=50&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=12&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management reported a significant year-over-year decline in Q1 FY2021 total revenue and net income, primarily due to reduced product sales and COVID-19 impacts, though liquidity remains sufficient for the next 12 months [Results of Operations](index=13&type=section&id=Results%20of%20Operations) Quarter-to-Quarter Financial Changes (Q1 FY2021 vs Q1 FY2020) | Item | % of Revenue (2020) | % of Revenue (2019) | Quarter-to-Quarter Change | | :--- | :--- | :--- | :--- | | Product sales | 95.0% | 96.7% | (28.4)% | | Total revenue | 100.0% | 100.0% | (27.1)% | | Gross profit | 81.8% | 82.7% | (27.9)% | | Income from operations | 54.9% | 62.0% | (35.5)% | | Net income | 52.6% | 57.3% | (33.1)% | - The decrease in product sales was attributed to decreased purchases by existing customers[59](index=59&type=chunk) - Management believes the COVID-19 pandemic had a significant negative impact on revenue and net income for the quarter, particularly due to its effects on the medical devices industry, and expects this trend to continue[62](index=62&type=chunk) [Liquidity and Capital Resources](index=14&type=section&id=Liquidity%20and%20Capital%20Resources) - Cash and cash equivalents decreased by **$1.66 million** during the quarter to **$6.40 million**, primarily due to **$4.84 million** in dividend payments, partially offset by **$3.17 million** in net cash from operations[64](index=64&type=chunk) - The Board of Directors declared a quarterly cash dividend of **$1.00 per share**, to be paid on August 31, 2020, with future dividends subject to Board approval and potential impacts from the COVID-19 pandemic[52](index=52&type=chunk)[66](index=66&type=chunk) - Management believes that current working capital and cash generated from operations will be sufficient to meet the company's needs for at least the next 12 months[67](index=67&type=chunk) [Controls and Procedures](index=15&type=section&id=Item%204.%20Controls%20and%20Procedures) As of June 30, 2020, the CEO and CFO concluded that disclosure controls and procedures were effective, with no material changes to internal control over financial reporting during the quarter - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of June 30, 2020[70](index=70&type=chunk) - There were no changes in the company's internal control over financial reporting during the quarter that materially affected, or are reasonably likely to materially affect, these controls[71](index=71&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=15&type=section&id=Item%201.%20Legal%20Proceedings) The company is not aware of any material pending or threatened legal proceedings that would significantly impact its financial condition or operations - As of the reporting date, NVE is not aware of any material pending or threatened legal proceedings[73](index=73&type=chunk) [Risk Factors](index=15&type=section&id=Item%201A.%20Risk%20Factors) While no material changes occurred, two risk factors were updated to reflect current conditions, specifically concerning public health crises and potential supply chain disruptions from packaging vendors - The risk factor concerning public health crises was updated to reflect the ongoing impact of the COVID-19 pandemic, which has caused customers to delay or cancel orders and poses a risk of future operational restrictions[74](index=74&type=chunk) - The risk factor related to packaging vendors was updated to highlight supply chain vulnerabilities, noting that one vendor had to suspend operations due to COVID-19 orders and that the pandemic has caused material shortages[75](index=75&type=chunk) [Mine Safety Disclosures](index=15&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section is not applicable to the company's operations - Not applicable[76](index=76&type=chunk) [Exhibits](index=16&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including CEO and CFO certifications and XBRL data files for financial reporting - The exhibits filed with this report include certifications from the CEO (Daniel A. Baker) and CFO (Curt A. Reynders) pursuant to Rule 13a-14(a)/15d-14(a) and 18 U.S.C. Section 1350, along with XBRL instance and taxonomy documents[77](index=77&type=chunk)

NVE Corporation (NASDAQ:NVEC) Q4 2020 Earnings Conference Call May 6, 2020 5:00 PM ET Company Participants Daniel Baker ??? President and Chief Executive Officer Curt Reynders ??? Chief Financial Officer Conference Call Participants Jeff Bernstein ??? Cowen Operator Ladies and gentlemen, thank you for standing by, and welcome to the NVE Conference Call on Fourth Quarter and Fiscal Year Results. At this time, all participant lines are in a listen-only mode. After the speakers??? presentation, there will be q ...