# NVE Corp: Form 10-Q for the period ended Jun 30, 2022

- Company: [NVE Corp](/companies/nvec.md) (CIK 724910)
- Form: 10-Q
- Filed: 2022-07-20
- Accepted by EDGAR: Jul 20, 2022, 20:17 ET
- Period: 2022-06-30
- Accession: 0001437749-22-017440
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/724910/000143774922017440/nvec20220507_10q.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/724910/000143774922017440/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2022-06-30.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Cost of revenue | 3 months, 2022-04-01 to 2022-06-30 | $1.7m | us-gaap:CostOfRevenue |
| Gross profit | 3 months, 2022-04-01 to 2022-06-30 | $5.7m | us-gaap:GrossProfit |
| Research and development | 3 months, 2022-04-01 to 2022-06-30 | $601.9k | us-gaap:ResearchAndDevelopmentExpense |
| Selling, general and administrative | 3 months, 2022-04-01 to 2022-06-30 | $371.3k | us-gaap:SellingGeneralAndAdministrativeExpense |
| Operating income | 3 months, 2022-04-01 to 2022-06-30 | $4.7m | us-gaap:OperatingIncomeLoss |
| Income tax | 3 months, 2022-04-01 to 2022-06-30 | $854.3k | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2022-04-01 to 2022-06-30 | $4.1m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2022-04-01 to 2022-06-30 | $0.86 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2022-04-01 to 2022-06-30 | $0.86 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2022-04-01 to 2022-06-30 | 4,830,871 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 3 months, 2022-04-01 to 2022-06-30 | $3.3m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 3 months, 2022-04-01 to 2022-06-30 | $24.5k | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Dividends paid | 3 months, 2022-04-01 to 2022-06-30 | $4.8m | us-gaap:PaymentsOfDividendsCommonStock |
| Cash and equivalents | at 2022-06-30 | $13.3m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2022-06-30 | $38.0m | us-gaap:AssetsCurrent |
| Total assets | at 2022-06-30 | $65.1m | us-gaap:Assets |
| Current liabilities | at 2022-06-30 | $1.1m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2022-06-30 | $1.5m | us-gaap:Liabilities |
| Shareholders' equity | at 2022-06-30 | $63.5m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 8,480 characters.

### Forward-looking statements

Some of the statements made in this Report or in the documents incorporated by reference in this Report and in other materials filed or to be filed by us with the Securities and Exchange Commission (“SEC”) as well as information included in verbal or written statements made by us constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are subject to the safe harbor provisions of the reform act. Forward-looking statements may be identified by the use of the terminology such as may, will, expect, anticipate, intend, believe, estimate, should, or continue, or the negatives of these terms or other variations on these words or comparable terminology. To the extent that this Report contains forward-looking statements regarding the financial condition, operating results, business prospects or any other aspect of NVE, you should be aware that our actual financial condition, operating results and business performance may differ materially from that projected or estimated by us in the forward-looking statements. We have attempted to identify, in context, some of the factors that we currently believe may cause actual future experience and results to differ from their current expectations. These differences may be caused by a variety of factors, including but not limited to risks related to our reliance on several large customers for a significant percentage of revenue, our dependence on critical suppliers and packaging vendors, uncertainties related to the economic environments in the industries we serve, uncertainties related to future sales and revenues, risks and uncertainties related to future stock repurchases and dividend payments, and other specific risks that may be alluded to in this Report or in the documents incorporated by reference in this Report.

Further information regarding our risks and uncertainties are contained in Part I, Item 1A “Risk Factors” of our Annual Report on Form 10-K for the year ended March 31, 2022.

### General

NVE Corporation, referred to as NVE, we, us, or our, develops and sells devices that use spintronics, a nanotechnology that relies on electron spin rather than electron charge to acquire, store and transmit information. We manufacture high-performance spintronic products including sensors and couplers that are used to acquire and transmit data.

### Critical accounting policies

A description of our critical accounting policies is provided in Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended March 31, 2022. As of June 30, 2022 our critical accounting policies and estimates continued to include investment valuation, inventory valuation, and deferred tax assets estimation.

### Quarter ended June 30, 2022 compared to quarter ended June 30, 2021

The table shown below summarizes the percentage of revenue and quarter-to-quarter changes for various items:

| Revenue | Percentage of Revenue Quarter Ended June 30 2022 | 2021 | Quarter- to-Quarter Change |
| --- | ---: | ---: | ---: |
| Product sales | 96.4% | 97.2% | 1.7% |
| Contract research and development | 3.6% | 2.8% | 32.1% |
| Total revenue | 100.0% | 100.0% | 2.6% |
| Cost of sales | 22.5% | 24.7% | (6.7)% |
| Gross profit | 77.5% | 75.3% | 5.6% |
| Expenses |  |  |  |
| Research and development | 8.2% | 11.3% | (25.5)% |
| Selling, general, and administrative | 5.1% | 6.6% | (20.4)% |
| Total expenses | 13.3% | 17.9% | (23.7)% |
| Income from operations | 64.2% | 57.4% | 14.7% |
| Interest income | 3.9% | 4.1% | (2.3)% |
| Income before taxes | 68.1% | 61.5% | 13.5% |
| Provision for income taxes | 11.7% | 11.5% | 4.3% |
| Net income | 56.4% | 50.0% | 15.7% |

Total revenue for the quarter ended June 30, 2022 (the first quarter of fiscal 2023) increased 3% compared to the quarter ended June 30, 2021 (the first quarter of fiscal 2022). The increase was due to a 2% increase in product sales and a 32% increase in contract research and development revenue.

The increase in contract research and development revenue was due to new contracts.

Gross profit as a percentage of revenue increased to 77% for the first quarter of fiscal 2023 from 75% for the first quarter of fiscal 2022 primarily due to increased prices.

Total expenses decreased 24% for the first quarter of fiscal 2023 compared to the first quarter of fiscal 2022 due to a 26% decrease in research and development expense and a 20% decrease in selling, general, and administrative expense. The decrease in research and development expense was primarily due to the reallocation of resources from research and development to revenue-generating activities. The decrease in selling, general, and administrative expense was primarily due to decreased employee compensation expense.

Interest income for the first quarter of fiscal 2023 decreased 2% primarily due to a decrease in our available-for-sale securities.

The 16% increase in net income in the first quarter of fiscal 2023 compared to the prior-year quarter was primarily due to increased revenue, increased gross profit margin, and decreased expenses.

### The Impact of the COVID-19 Pandemic

We believe revenues and costs in the quarter ended June 30, 2022 were unfavorably affected by continued supply chain disruptions related to the COVID-19 pandemic.

### Liquidity and Capital Resources

### Overview

Cash and cash equivalents were $13,299,264 as of June 30, 2022 compared to $10,449,510 as of March 31, 2022. The $2,849,754 increase in cash and cash equivalents during first quarter of fiscal 2023 was due to $3,331,143 in net cash provided by operating activities and $4,349,437 of cash provided by investing activities, partially offset by $4,830,826 of cash used in financing activities.

### Operating Activities

Net cash provided by operating activities related to product sales and research and development contract revenue as our primary source of working capital for the current and prior-year quarters. Net cash provided by operating activities was $3,331,143 for first quarter of fiscal 2023 and $3,300,394 for the first quarter of fiscal 2022.

Accounts receivable decreased by $1,191,613 during the first quarter of fiscal 2023 primarily due to the timing of sales to and payments from customers.

Inventories increased $455,402 due primarily to our decisions to increase work in process in order to mitigate longer vendor lead-times.

Accounts payable and accrued expenses decreased $1,371,168 due to a $689,317 decrease in accrued expenses, a $648,092 decrease in accounts payable, and a $33,759 net decrease in operating lease liabilities. The decrease in accounts payable was due to the timing of vendor payments. The decrease in accrued expenses was due to decreases in accrued payroll and income taxes payable.

### Investing Activities

Cash provided by investing activities during the quarter ended June 30, 2022 consisted of $9,250,000 in proceeds from maturities of marketable securities and the receipt of a $100,000 buildout allowance, partially offset by $4,976,063 marketable securities purchases and $24,500 of fixed asset purchases. Fixed asset purchases can vary from quarter to quarter depending on our needs and equipment purchasing opportunities. We have ordered and are in the process of deploying additional new production equipment to increase our capacity. Therefore, we currently expect significantly more fixed asset purchases during fiscal 2023 than the $484,579 we invested in fiscal 2022.

### Financing Activities

Cash used in financing activities during the quarter ended June 30, 2022 consisted of $4,830,826 of cash dividends paid to shareholders. In addition to cash dividends to shareholders paid in first quarter of fiscal 2023, on July 20, 2022 we announced that our Board had declared a cash dividend of $1.00 per share of Common Stock, or $4,830,826 based on shares outstanding as of July 15, 2022, to be paid August 31, 2022. We plan to fund dividends through cash provided by operating activities and proceeds from maturities of marketable securities. All future dividends will be subject to Board approval and subject to the company’s results of operations, cash and marketable security balances, estimates of future cash requirements, and other factors the Board may deem relevant. Furthermore, dividends may be modified or discontinued at any time without notice.

## Controls and procedures

As filed, 1,367 characters.

### Disclosure Controls and Procedures

Management, with the participation of the Chief Executive Officer and Chief Financial Officer, has performed an evaluation of our disclosure controls and procedures that are defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934 (the “Exchange Act”) as of the end of the period covered by this Report. This evaluation included consideration of the controls, processes, and procedures that are designed to ensure that information required to be disclosed by us in the reports we file under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Principal Financial Officer, as appropriate to allow timely decisions regarding required disclosure. Although there have been changes in personnel involved in our controls, processes, and procedures, our management concluded that, as of June 30, 2022, our disclosure controls and procedures were effective.

### Changes in Internal Controls

During the quarter ended June 30, 2022, there was no change in our internal control over financial reporting that materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

## Risk factors

As filed, 143 characters.

There have been no material changes from the risk factors disclosed in our Annual Report on Form 10-K for the fiscal year ended March 31, 2022.

Filed Jul 20, 2022.
Source: SEC EDGAR, the filing index for accession 0001437749-22-017440. Last ingested by Listed: Oct 24, 2026, 14:55 ET. No prices; not investment advice.