NVE(NVEC) - 2025 Q3 - Quarterly Report

PART I. FINANCIAL INFORMATION Financial Statements This section presents NVE Corporation's unaudited consolidated financial statements for the quarter and nine months ended December 31, 2024, detailing financial position, performance, and cash flows - NVE Corporation develops and sells devices using spintronics, a nanotechnology that relies on electron spin to acquire, store, and transmit information[31] Condensed Balance Sheet (Unaudited) | Assets & Liabilities | Dec 31, 2024 | March 31, 2024 | | :--- | :--- | :--- | | Total Current Assets | $30,272,105 | $33,194,096 | | Total Assets | $64,588,564 | $66,780,033 | | Total Current Liabilities | $751,110 | $1,035,741 | | Total Liabilities | $1,616,076 | $1,211,516 | | Total Shareholders' Equity | $62,972,488 | $65,568,517 | Statements of Income (Quarter Ended Dec 31) | Metric | Q3 2024 (FY25) | Q3 2023 (FY24) | Change | | :--- | :--- | :--- | :--- | | Total Revenue | $5,063,045 | $6,756,260 | -25.1% | | Product Sales | $4,960,488 | $6,366,009 | -22.1% | | Gross Profit | $4,265,423 | $5,401,193 | -21.0% | | Income from Operations | $2,960,963 | $4,470,987 | -33.8% | | Net Income | $3,048,410 | $4,184,422 | -27.1% | | Net Income per Share (Diluted) | $0.63 | $0.87 | -27.6% | Statements of Income (Nine Months Ended Dec 31) | Metric | Nine Months 2024 (FY25) | Nine Months 2023 (FY24) | Change | | :--- | :--- | :--- | :--- | | Total Revenue | $18,604,979 | $22,720,950 | -18.1% | | Product Sales | $17,680,780 | $22,183,223 | -20.3% | | Gross Profit | $15,884,609 | $17,686,394 | -10.2% | | Income from Operations | $11,745,373 | $14,458,574 | -18.8% | | Net Income | $11,172,142 | $13,311,718 | -16.1% | | Net Income per Share (Diluted) | $2.31 | $2.75 | -16.0% | Statements of Cash Flows (Nine Months Ended Dec 31) | Cash Flow Activity | Nine Months 2024 (FY25) | Nine Months 2023 (FY24) | | :--- | :--- | :--- | | Net cash provided by operating activities | $11,828,053 | $15,115,031 | | Net cash provided by (used in) investing activities | ($2,237,563) | $2,280,084 | | Net cash used in financing activities | ($14,388,356) | ($14,380,101) | | Decrease in cash and cash equivalents | ($4,797,866) | $3,015,014 | | Cash and cash equivalents at end of period | $5,485,684 | $4,684,910 | - On January 22, 2025, the Board of Directors declared a quarterly cash dividend of $1.00 per share, payable on February 28, 2025[56] Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the financial results for Q3 and the first nine months of fiscal 2025, highlighting decreased revenue and net income, improved gross margin, and details on liquidity, capital resources, and cash flow activities Results of Operations Total revenue decreased by 25% in Q3 FY25 and 18% for the nine-month period, primarily due to lower product sales, while gross margin percentage improved due to product mix and direct sales - Q3 FY25 revenue decreased 25% YoY, driven by a 22% decrease in product sales from existing customers and a 74% decrease in contract R&D revenue[63] - Q3 FY25 gross margin increased to 84% from 80% in the prior-year quarter, attributed to a more profitable product mix and a higher proportion of direct sales[64] - Q3 FY25 total expenses rose 40% YoY, primarily due to a 61% increase in R&D expense for new product development and a 12% increase in SG&A for sales and marketing activities[65] - For the first nine months of FY25, total revenue decreased 18% YoY, resulting from a 20% drop in product sales, which was partially offset by a 72% increase in contract R&D revenue[70] - The 16% decrease in net income for the first nine months of FY25 was primarily due to decreased revenue and increased operating expenses, partially offset by increased gross profit margin and other income[73] Liquidity and Capital Resources Cash and cash equivalents decreased by $4.8 million in the first nine months of fiscal 2025, primarily due to financing and investing activities, partially offset by operating cash flow, with plans for increased fixed asset purchases - Cash and cash equivalents decreased by $4,797,866 in the first nine months of fiscal 2025, primarily due to $14,388,356 used in financing activities (dividends) and $2,237,563 used in investing, offset by $11,828,053 provided by operations[75] - Investing activities included a $1,125,437 downpayment on production equipment expected to be delivered in fiscal 2026, with plans for significantly increased fixed asset purchases in fiscal 2025 and 2026[78] - Financing activities consisted of $14,502,518 in cash dividends paid to shareholders, partially offset by $114,162 from stock option exercises[79] - Future dividends are subject to Board approval and will be funded through cash from operations and proceeds from maturing marketable securities[81] Controls and Procedures Management concluded that disclosure controls and procedures were effective as of December 31, 2024, with no material changes to internal control over financial reporting during the quarter - Management concluded that as of December 31, 2024, the company's disclosure controls and procedures were effective[83] - There were no changes in internal control over financial reporting during the quarter ended December 31, 2024, that materially affected, or are reasonably likely to materially affect, internal controls[84] PART II. OTHER INFORMATION Legal Proceedings 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, the company is not aware of any material pending or threatened legal proceedings[86] Risk Factors No material changes have occurred in the risk factors previously disclosed in the Annual Report on Form 10-K for the fiscal year ended March 31, 2024 - No material changes have occurred in the risk factors disclosed in the Annual Report on Form 10-K for the fiscal year ended March 31, 2024[87] Mine Safety Disclosures This section is not applicable to the company - None[88] Exhibits This section lists exhibits filed with Form 10-Q, including a lease amendment, officer certifications, and Inline XBRL data files List of Exhibits | Exhibit | Description | | :--- | :--- | | 10.1 | Sixth amendment to lease... (incorporated by reference) | | 31.1 | Certification by Daniel A. Baker... | | 31.2 | Certification by Daniel Nelson... | | 32 | Certification Pursuant to Section 906 of the Sarbanes-Oxley Act... | | 101 & 104 | Inline XBRL and Cover Page Interactive Data Files |