NVE(NVEC) - 2024 Q3 - Quarterly Report

PART I. FINANCIAL INFORMATION Financial Statements This section presents NVE Corporation's unaudited consolidated financial statements as of December 31, 2023, showing a year-over-year decrease in revenue and net income for both the third quarter and first nine months of fiscal 2024 Balance Sheets As of December 31, 2023, total assets decreased slightly to $67.6 million from $69.3 million, while total liabilities significantly decreased to $1.0 million from $2.2 million, with shareholders' equity remaining stable Balance Sheet Summary (in thousands) | Account | Dec. 31, 2023 | March 31, 2023 | | :--- | :--- | :--- | | Total Current Assets | $29,213 | $30,787 | | Total Assets | $67,629 | $69,255 | | Total Current Liabilities | $810 | $1,833 | | Total Liabilities | $1,028 | $2,176 | | Total Shareholders' Equity | $66,601 | $67,080 | Statements of Income For Q3 FY2024, total revenue decreased to $6.76 million and net income slightly to $4.18 million, while nine-month revenue fell to $22.72 million and net income to $13.31 million year-over-year Quarterly Income Statement Highlights (YoY) | Metric | Q3 FY2024 (ended Dec 31, 2023) | Q3 FY2023 (ended Dec 31, 2022) | Change | | :--- | :--- | :--- | :--- | | Total Revenue | $6,756,260 | $7,401,678 | -8.7% | | Gross Profit | $5,401,193 | $5,923,306 | -8.8% | | Income from Operations | $4,470,987 | $4,819,248 | -7.2% | | Net Income | $4,184,422 | $4,231,324 | -1.1% | | Diluted EPS | $0.87 | $0.88 | -1.1% | Nine-Month Income Statement Highlights (YoY) | Metric | Nine Months FY2024 | Nine Months FY2023 | Change | | :--- | :--- | :--- | :--- | | Total Revenue | $22,720,950 | $25,455,909 | -10.7% | | Gross Profit | $17,686,394 | $19,922,909 | -11.2% | | Income from Operations | $14,458,574 | $16,740,009 | -13.6% | | Net Income | $13,311,718 | $14,461,814 | -8.0% | | Diluted EPS | $2.75 | $2.99 | -8.0% | Statements of Cash Flows For the nine months ended December 31, 2023, operating cash flow increased to $15.1 million, investing activities provided $2.3 million (a shift from prior year's $8.7 million use), and financing activities used $14.4 million, resulting in a $3.0 million increase in cash Cash Flow Summary (Nine Months Ended Dec 31) | Activity | 2023 | 2022 | | :--- | :--- | :--- | | Net cash provided by operating activities | $15,115,031 | $14,748,911 | | Net cash provided (used) by investing activities | $2,280,084 | ($8,676,229) | | Cash used in financing activities | ($14,380,101) | ($14,492,478) | | Increase (decrease) in cash | $3,015,014 | ($8,419,796) | Notes to Financial Statements The notes detail the company's spintronics business, accounting policies, and key disclosures on marketable securities (80% of total assets), inventories, leases, and stock-based compensation, alongside a declared $1.00 per share quarterly dividend - The company develops and sells devices using spintronics, a nanotechnology that relies on electron spin[28] - Marketable securities represent approximately 80% of total assets as of December 31, 2023, consisting of money market funds and corporate bonds[40] - On January 17, 2024, the Board of Directors declared a quarterly cash dividend of $1.00 per share, payable on February 28, 2024[53] Management's Discussion and Analysis of Financial Condition and Results of Operations Management attributes the 9% Q3 and 11% nine-month revenue decreases to lower product sales, partially offset by increased R&D revenue, while net income declined 1% and 8% respectively, with liquidity remaining strong due to a $3.0 million cash increase - Q3 FY2024 revenue decreased 9% YoY, driven by a 12% decline in product sales due to decreased demand from the defense industry and a semiconductor industry downturn[59] - Nine-month FY2024 revenue decreased 11% YoY, also due to an 11% decrease in product sales[65] - Q3 R&D expenses fell 23% due to the redeployment of resources to customer-funded projects[60] - Cash and cash equivalents increased by $3.0 million in the first nine months of fiscal 2024, primarily due to $15.1 million in cash from operations, offset by $14.4 million in dividend payments[70] Controls and Procedures Management concluded that the company's disclosure controls and procedures were effective as of December 31, 2023, with no material changes to internal control over financial reporting during the quarter - Management concluded that as of December 31, 2023, the company's disclosure controls and procedures were effective[77] - No changes occurred in the company's internal control over financial reporting during the quarter ended December 31, 2023, that had a material effect[78] PART II. OTHER INFORMATION Legal Proceedings The company is not aware of any material pending or threatened legal proceedings that would adversely impact its financial condition or operations - As of the report date, the company is not aware of any material pending or threatened legal proceedings[80] Risk Factors No material changes occurred to risk factors from the Annual Report on Form 10-K, except for an amendment extending the Supplier Partnering Agreement with Abbott Laboratories through December 31, 2024 - The Supplier Partnering Agreement with Abbott Laboratories has been amended, extending the term through December 31, 2024[81][82] Mine Safety Disclosures This section is not applicable as the company has no mine safety disclosures to report - None[83] Exhibits This section lists exhibits filed with the Form 10-Q, including an amendment to the Supplier Partnering Agreement with Abbott, CEO/CFO certifications, and Inline XBRL documents - Filed exhibits include Amendment No. 10 to the Supplier Partnering Agreement with Abbott, CEO/CFO certifications, and XBRL data files[85]