Nve Corp 10-Q for FY2020 Q3
Nve Corp (NVEC)
10-Q
2020-01-22
For: 2019-12-31
View Original
Added on
April 07, 2026
About this 10-Q
Nve Corp filed this 10-Q on January 22, 2020, covering the quarter ended December 31, 2019 (FY2020 Q3).
Headline figures
Quarter ended December 31, 2019, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $6.46M
- up 3.1% from $6.27M a year earlier
- Net income
- $3.73M
- up 9.0% from net income of $3.42M a year earlier
- Diluted EPS
- $0.77
- up 8.5% from $0.71 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 2019
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For 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.
[X] 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).
[X] 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 [X]
|
|
| Non-accelerated filer [ ] |
Smaller reporting company [X]
|
|
|
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 [X] 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 – 4,846,010 shares outstanding as of January 17, 2020
NVE CORPORATION
QUARTERLY REPORT ON FORM 10-Q
TABLE OF CONTENTS
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, 2019 and 2018
Statements of Comprehensive Income for the Quarters Ended December 31, 2019 and 2018
Statements of Income for the nine Months Ended December 31, 2019 and 2018
Statements of Comprehensive Income for the nine Months Ended December 31, 2019 and 2018
Statements of Shareholders’ Equity for Periods Ended December 31, 2019
Statements of Shareholders’ Equity for Periods Ended December 31, 2018
Statements of Cash Flows
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
2
Table of Contents
PART I–FINANCIAL INFORMATION
Item 1. Financial Statements.
NVE CORPORATION
BALANCE SHEETS
BALANCE SHEETS
| (Unaudited) Dec. 31, 2019 |
March 31, 2019* | ||||||
| ASSETS | |||||||
| Current assets | |||||||
|
Cash and cash equivalents
|
$ | 10,153,173 | $ | 6,877,304 | |||
|
Marketable securities, short-term
|
12,055,363 | 12,487,821 | |||||
|
Accounts receivable, net of allowance for uncollectible
accounts of $15,000
|
2,119,037 | 2,995,638 | |||||
|
Inventories
|
4,159,742 | 4,264,876 | |||||
|
Prepaid expenses and other assets
|
845,194 | 816,045 | |||||
| Total current assets | 29,332,509 | 27,441,684 | |||||
| Fixed assets | |||||||
|
Machinery and equipment
|
9,381,906 | 9,365,806 | |||||
|
Leasehold improvements
|
1,797,245 | 1,787,269 | |||||
| 11,179,151 | 11,153,075 | ||||||
|
Less accumulated depreciation and amortization
|
10,529,317 | 10,258,240 | |||||
| Net fixed assets | 649,834 | 894,835 | |||||
| Deferred tax assets | 63,467 | 353,735 | |||||
| Marketable securities, long-term | 50,920,291 | 54,925,633 | |||||
| Right-of-use asset – operating lease | 151,749 | - | |||||
| Total assets | $ | 81,117,850 | $ | 83,615,887 | |||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||
| Current liabilities | |||||||
|
Accounts payable
|
$ | 153,470 | $ | 375,188 | |||
|
Accrued payroll and other
|
558,762 | 460,488 | |||||
|
Operating lease
|
174,916 | - | |||||
| Total current liabilities | 887,148 | 835,676 | |||||
| Shareholders’ equity | |||||||
|
Common stock, $0.01 par value,
6,000,000 shares authorized;
4,846,010 issued and outstanding as of December 31, 2019 and March 31, 2019 |
48,460 | 48,460 | |||||
|
Additional paid-in capital
|
19,958,918 | 19,910,558 | |||||
|
Accumulated other comprehensive income (loss)
|
697,291 | (82,725 | ) | ||||
|
Retained earnings
|
59,526,033 | 62,903,918 | |||||
| Total shareholders’ equity | 80,230,702 | 82,780,211 | |||||
| Total liabilities and shareholders’ equity | $ | 81,117,850 | $ | 83,615,887 | |||
*The March 31, 2019 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, 2019.
See accompanying notes.
3
3
Table of Contents
NVE CORPORATION
STATEMENTS OF INCOME
(Unaudited)
| Quarter Ended Dec. 31 | |||||||
| 2019 | 2018 | ||||||
| Revenue | |||||||
|
Product sales
|
$ | 6,160,967 | $ | 5,991,241 | |||
|
Contract research and development
|
303,629 | 278,164 | |||||
| Total revenue | 6,464,596 | 6,269,405 | |||||
| Cost of sales | 1,263,806 | 1,169,406 | |||||
| Gross profit | 5,200,790 | 5,099,999 | |||||
| Expenses | |||||||
|
Research and development
|
771,468 | 1,126,975 | |||||
|
Selling, general, and administrative
|
327,989 | 268,905 | |||||
| Total expenses | 1,099,457 | 1,395,880 | |||||
| Income from operations | 4,101,333 | 3,704,119 | |||||
| Interest income | 443,478 | 457,204 | |||||
| Income before taxes | 4,544,811 | 4,161,323 | |||||
| Provision for income taxes | 814,147 | 739,918 | |||||
| Net income | $ | 3,730,664 | $ | 3,421,405 | |||
| Net income per share – basic | $ | 0.77 | $ | 0.71 | |||
| Net income per share – diluted | $ | 0.77 | $ | 0.71 | |||
| Cash dividends declared per common share | $ | 1.00 | $ | 1.00 | |||
| Weighted average shares outstanding | |||||||
|
Basic
|
4,846,010 | 4,845,010 | |||||
|
Diluted
|
4,847,436 | 4,850,507 | |||||
STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
| Quarter Ended Dec. 31 | |||||||
| 2019 | 2018 | ||||||
| Net income | $ | 3,730,664 | $ | 3,421,405 | |||
| Unrealized gain from marketable securities, net of tax | 31,237 | 101,891 | |||||
| Comprehensive income | $ | 3,761,901 | $ | 3,523,296 | |||
See accompanying notes.
4
Table of Contents
NVE CORPORATION
STATEMENTS OF INCOME
(Unaudited)
| Nine Months Ended Dec. 31 | |||||||
| 2019 | 2018 | ||||||
| Revenue | |||||||
|
Product sales
|
$ | 18,434,039 | $ | 19,916,864 | |||
|
Contract research and development
|
827,198 | 966,522 | |||||
| Total revenue | 19,261,237 | 20,883,386 | |||||
| Cost of sales | 3,701,941 | 3,918,256 | |||||
| Gross profit | 15,559,296 | 16,965,130 | |||||
| Expenses | |||||||
|
Research and development
|
2,671,131 | 3,087,964 | |||||
|
Selling, general, and administrative
|
1,026,448 | 975,114 | |||||
| Total expenses | 3,697,579 | 4,063,078 | |||||
| Income from operations | 11,861,717 | 12,902,052 | |||||
| Interest income | 1,358,826 | 1,325,299 | |||||
| Income before taxes | 13,220,543 | 14,227,351 | |||||
| Provision for income taxes | 2,060,398 | 2,578,287 | |||||
| Net income | $ | 11,160,145 | $ | 11,649,064 | |||
| Net income per share – basic | $ | 2.30 | $ | 2.41 | |||
| Net income per share – diluted | $ | 2.30 | $ | 2.40 | |||
| Cash dividends declared per common share | $ | 3.00 | $ | 3.00 | |||
| Weighted average shares outstanding | |||||||
|
Basic
|
4,846,010 | 4,843,355 | |||||
|
Diluted
|
4,848,506 | 4,850,120 | |||||
STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
| Nine Months Ended Dec. 31 | |||||||
| 2019 | 2018 | ||||||
| Net income | $ | 11,160,145 | $ | 11,649,064 | |||
| Unrealized gain from marketable securities, net of tax | 780,016 | 46,101 | |||||
| Comprehensive income | $ | 11,940,161 | $ | 11,695,165 | |||
See accompanying notes.
5
Table of Contents
NVE CORPORATION
STATEMENTS OF SHAREHOLDERS’ EQUITY
(Unaudited)
| |
Additional Paid-In Capital |
Accumulated Other Comprehen- sive (Loss) Income |
Retained Earnings |
|||||||||||||||||
| Common Stock | ||||||||||||||||||||
| Shares | Amount | Total | ||||||||||||||||||
| Balance as of March 31, 2019 | 4,846,010 | $ | 48,460 | $ | 19,910,558 | $ | (82,725 | ) | $ | 62,903,918 | $ | 82,780,211 | ||||||||
|
Comprehensive income:
|
||||||||||||||||||||
|
Unrealized gain on
marketable securities,
net of tax |
570,063 | 570,063 | ||||||||||||||||||
|
Net income
|
3,607,419 | 3,607,419 | ||||||||||||||||||
|
Total comprehensive income
|
4,177,482 | |||||||||||||||||||
|
Cash dividends declared
($1.00 per share of
common stock) |
(4,846,010 | ) | (4,846,010 | ) | ||||||||||||||||
| Balance as of June 30, 2019 | 4,846,010 | 48,460 | 19,910,558 | 487,338 | 61,665,327 | 82,111,683 | ||||||||||||||
|
Comprehensive income:
|
||||||||||||||||||||
|
Unrealized gain on
marketable securities,
net of tax |
178,716 | 178,716 | ||||||||||||||||||
|
Net income
|
3,822,062 | 3,822,062 | ||||||||||||||||||
|
Total comprehensive income
|
4,000,778 | |||||||||||||||||||
|
Stock-based compensation
|
48,360 | 48,360 | ||||||||||||||||||
|
Cash dividends declared
($1.00 per share of
common stock) |
(4,846,010 | ) | (4,846,010 | ) | ||||||||||||||||
| Balance as of September 30, 2019 | 4,846,010 | 48,460 | 19,958,918 | 666,054 | 60,641,379 | 81,314,811 | ||||||||||||||
|
Comprehensive income:
|
||||||||||||||||||||
|
Unrealized gain on
marketable securities,
net of tax |
31,237 | 31,237 | ||||||||||||||||||
|
Net income
|
3,730,664 | 3,730,664 | ||||||||||||||||||
|
Total comprehensive income
|
3,761,901 | |||||||||||||||||||
|
Cash dividends declared
($1.00 per share of
common stock) |
(4,846,010 | ) | (4,846,010 | ) | ||||||||||||||||
| Balance as of December 31, 2019 | 4,846,010 | $ | 48,460 | $ | 19,958,918 | $ | 697,291 | $ | 59,526,033 | $ | 80,230,702 | |||||||||
See accompanying notes.
6
Table of Contents
NVE CORPORATION
STATEMENTS OF SHAREHOLDERS’ EQUITY
(Unaudited)
| |
Additional Paid-In Capital |
Accumulated Other Comprehen- sive (Loss) Income |
Retained Earnings |
|||||||||||||||||
| Common Stock | ||||||||||||||||||||
| Shares | Amount | Total | ||||||||||||||||||
| Balance as of March 31, 2018 | 4,842,010 | $ | 48,420 | $ | 19,599,298 | $ | (915,635 | ) | $ | 67,709,657 | $ | 86,441,740 | ||||||||
|
Comprehensive income:
|
||||||||||||||||||||
|
Unrealized loss on
marketable securities,
net of tax |
(107,027 | ) | (107,027 | ) | ||||||||||||||||
|
Net income
|
3,945,049 | 3,945,049 | ||||||||||||||||||
|
Total comprehensive income
|
3,838,022 | |||||||||||||||||||
|
Cash dividends declared
($1.00 per share of
common stock) |
(4,842,010 | ) | (4,842,010 | ) | ||||||||||||||||
|
Cumulative effect of accounting change
|
(60,365 | ) | 60,365 | |||||||||||||||||
| Balance as of June 30, 2018 | 4,842,010 | 48,420 | 19,599,298 | (1,083,027 | ) | 66,873,061 | 85,437,752 | |||||||||||||
|
Exercise of stock
options
|
2,000 | 20 | 124,430 | 124,450 | ||||||||||||||||
|
Comprehensive income:
|
||||||||||||||||||||
|
Unrealized gain on
marketable securities,
net of tax |
51,237 | 51,237 | ||||||||||||||||||
|
Net income
|
4,282,610 | 4,282,610 | ||||||||||||||||||
|
Total comprehensive income
|
4,333,847 | |||||||||||||||||||
|
Stock-based compensation
|
93,360 | 93,360 | ||||||||||||||||||
|
Cash dividends declared
($1.00 per share of
common stock) |
(4,842,010 | ) | (4,842,010 | ) | ||||||||||||||||
| Balance as of September 30, 2018 | 4,844,010 | 48,440 | 19,817,088 | (1,031,790 | ) | 66,313,661 | 85,147,399 | |||||||||||||
|
Exercise of stock
options
|
2,000 | 20 | 93,470 | 93,490 | ||||||||||||||||
|
Comprehensive income:
|
||||||||||||||||||||
|
Unrealized gain on
marketable securities,
net of tax |
101,891 | 101,891 | ||||||||||||||||||
|
Net income
|
3,421,405 | 3,421,405 | ||||||||||||||||||
|
Total comprehensive income
|
3,523,296 | |||||||||||||||||||
|
Cash dividends declared
($1.00 per share of
common stock) |
(4,844,010 | ) | (4,844,010 | ) | ||||||||||||||||
| Balance as of December 31, 2018 | 4,846,010 | $ | 48,460 | $ | 19,910,558 | $ | (929,899 | ) | $ | 64,891,056 | $ | 83,920,175 | ||||||||
See accompanying notes.
7
Table of Contents
NVE CORPORATION
STATEMENTS OF CASH FLOWS
(Unaudited)
| Nine Months Ended December 31 | |||||||
| 2019 | 2018 | ||||||
| OPERATING ACTIVITIES | |||||||
| Net income | $ | 11,160,145 | $ | 11,649,064 | |||
| Adjustments to reconcile net income to net cash
provided by operating activities:
|
|||||||
|
Depreciation and amortization
|
403,691 | 531,685 | |||||
|
Stock-based compensation
|
48,360 | 93,360 | |||||
|
Deferred income taxes
|
71,800 | (30,648 | ) | ||||
|
Changes in operating assets and liabilities:
|
|||||||
|
Accounts receivable
|
876,601 | 171,051 | |||||
|
Inventories
|
105,134 | (491,042 | ) | ||||
|
Prepaid expenses and other assets
|
80,746 | (120,646 | ) | ||||
|
Accounts payable and other liabilities
|
(210,172 | ) | (123,775 | ) | |||
| Net cash provided by operating activities | 12,536,305 | 11,679,049 | |||||
| INVESTING ACTIVITIES | |||||||
| Purchases of fixed assets | (26,076 | ) | (68,265 | ) | |||
| Purchases of marketable securities | (7,196,330 | ) | (11,649,227 | ) | |||
| Proceeds from maturities of marketable securities | 12,500,000 | 15,800,000 | |||||
| Cash provided by investing activities | 5,277,594 | 4,082,508 | |||||
| FINANCING ACTIVITIES | |||||||
| Proceeds from sale of common stock | - | 217,940 | |||||
| Payment of dividends to shareholders | (14,538,030 | ) | (14,528,030 | ) | |||
| Cash used in financing activities | (14,538,030 | ) | (14,310,090 | ) | |||
| Increase in cash and cash equivalents | 3,275,869 | 1,451,467 | |||||
| Cash and cash equivalents at beginning of period | 6,877,304 | 4,755,082 | |||||
| Cash and cash equivalents at end of period | $ | 10,153,173 | $ | 6,206,549 | |||
| Supplemental disclosures of cash flow information: | |||||||
|
Cash paid during the period for income taxes
|
$ | 1,931,661 | $ | 2,696,045 | |||
See accompanying notes.
8
Table of Contents
NVE CORPORATION
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
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 it is suggested that these unaudited financial statements be read in conjunction with the audited financial statements and the notes included in our latest annual financial statements included in our Annual Report on Form 10-K for the fiscal year ended March 31, 2019. The results of operations for the quarter and nine months ended December 31, 2019 are not necessarily indicative of the results that may be expected for the full fiscal year ending March 31, 2020.
Significant Accounting Policies
Revenue Recognition
We recognize revenue when we satisfy performance obligations by the transfer of control of products or services to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those products or services. Revenue is disaggregated into product sales and contract research and development to depict the nature, amount, timing of revenue recognition and economic characteristics of our business, and is represented within the financial statements.
We recognize revenue from product sales to customers and distributors when we satisfy our performance obligation, at a point in time, upon product shipment or delivery to our customer or distributor as determined by agreed upon shipping terms. Shipping charges billed to customers are included in product sales and the related shipping costs are included in cost of sales. Under certain limited circumstances, our distributors may earn commissions for activities unrelated to their purchases of our products, such as for facilitating the sale of custom products or research and development contracts with third parties. We recognize any such commissions as selling, general, and administrative expenses. We recognize discounts provided to our distributors as reductions in revenue.
We recognize contract research and development revenue over a period of time as the performance obligation is satisfied over a period of time rather than a point in time. Contracts have specifications unique to each customer and do not create an asset with an alternate use, and we have an enforceable right to payment for performance completed to date. We recognize revenue over a period of time using costs incurred as the measurement of progress towards completion.
Accounts receivable is recognized when we have transferred a good or service to a customer and our right to receive consideration is unconditional through the completion of our performance obligation. A contract asset is recognized when we have a right to consideration from the transfer of goods or services to a customer but have not completed our performance obligation. A contract liability is recognized when we have been paid by a customer but have not yet satisfied the performance obligation by transferring goods or services. We had no material contract assets or contract liabilities as of December 31, 2019 or March 31, 2019.
Our performance obligations related to product sales and contract research and development contracts are satisfied in one year or less. Unsatisfied performance obligations represent contracts with an original expected duration of one year or less. As permitted under Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers, we are using the practical expedient not to disclose the value of these unsatisfied performance obligations. We also use the practical expedient in which we do not assess whether a contract has a significant financing component if the expectation at contract inception is such that the period between payment by the customer and the transfer of the promised goods or services to the customer will be one year or less.
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NOTE 3. RECENTLY ISSUED ACCOUNTING STANDARDS
Recently Adopted Accounting Standards
In July 2019, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2019-07, Codification Updates to SEC Sections—Amendments to SEC Paragraphs Pursuant to SEC Final Rule Releases No. 33-10532, Disclosure Update and Simplification, and Nos. 33-10231 and 33-10442, Investment Company Reporting Modernization, and Miscellaneous Updates. ASU 2019-07 aligns the guidance in various SEC sections of the codification with the requirements of certain SEC final rules and is effective immediately. These rules include requiring filers to include in their interim financial statements a reconciliation of changes in shareholders’ equity. We adopted all of the applicable rules for our Quarterly Report on Form 10-Q for the quarter ended June 30, 2019 and subsequent interim reports. The adoption of ASU 2019-07 only affected presentation and disclosure.
In February 2016, the FASB issued ASU No. 2016-02, Lease Accounting. ASU 2016-02 requires recognition of lease assets and lease liabilities on the balance sheet of lessees. In July 2018, the FASB issued ASU 2018-10, Codification Improvements to Topic 842 (Leases), which provides narrow amendments to clarify how to apply certain aspects of the new lease standard. The guidance is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years, which is fiscal 2020 for us. In July 2018, the FASB issued ASU No. 2018-11, Leases Topic (842): Targeted Improvements. ASU 2018-11 provided companies an option to apply the transition provisions of the new lease standard at its adoption date instead of at the earliest comparative period presented in its financial statements, and we adopted the new lease guidance using that method in the quarter ended June 30, 2019. Currently our only lease is the lease for our facility. We recognized $298,983 of leased liabilities a right-of-use asset of $261,644 as of April 1, 2019. The leased liabilities and right-of-use asset exclude non-lease components. There was no effect on our results of operations or cash flows.
New Accounting Standards Not Yet Adopted
In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740)—Simplifying the Accounting for Income Taxes. ASU 2019-12 is intended to simplify accounting for income taxes. It removes certain exceptions to the general principles in Topic 740 and amends existing guidance to improve consistent application. ASU 2019-12 is effective for fiscal years beginning after December 15, 2020 and interim periods within those fiscal years, which is fiscal 2022 for us, with early adoption permitted. We do not expect adoption of the new guidance to have a significant impact on our financial statements.
In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326), Measurement of Credit Losses on Financial Statements. ASU 2016-13 requires a financial asset (or a group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial asset(s) to present the net carrying value at the amount expected to be collected on the financial asset. In November 2018 the FASB issued ASU No. 2018-19, Codification Improvements to Topic 326, Financial Instruments—Credit Losses, which clarifies codification and corrects unintended application of the guidance, and in November 2019, the FASB issued ASU No. 2019-11, Codification Improvements to Topic 326, Financial Instruments-Credit Losses, which clarifies or addresses specific issues about certain aspects of ASU 2016-13. In November 2019 the FASB issued ASU No. 2019-10, Financial Instruments—Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842): Effective Dates, which delays the effective date of ASU 2016-13 by three years for certain Smaller Reporting Companies such as us. In accordance with ASU 2019-10, ASU 2016-13 is effective for certain Smaller Reporting Companies for financial statements issued for fiscal years beginning after December 15, 2022 and interim periods within those fiscal years, which will be fiscal 2024 for us if we continue to be classified as a Smaller Reporting Company, with early adoption permitted. We do not expect adoption of the new guidance to have a significant impact on our financial statements.
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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 Dec. 31 | |||
| 2019 | 2018 | ||
| Weighted average common shares outstanding – basic | 4,846,010 | 4,845,010 | |
| Dilutive effect of stock options | 1,426 | 5,497 | |
| Shares used in computing net income per share – diluted | 4,847,436 | 4,850,507 | |
| Nine Months Ended Dec. 31 | |||
| 2019 | 2018 | ||
| Weighted average common shares outstanding – basic | 4,846,010 | 4,843,355 | |
| Dilutive effect of stock options | 2,496 | 6,765 | |
| Shares used in computing net income per share – diluted | 4,848,506 | 4,850,120 | |
NOTE 5. FAIR VALUE OF FINANCIAL INSTRUMENTS
Our corporate bonds and money market funds are classified as available-for-sale securities and carried at estimated fair value. Unrealized holding gains and losses are included in accumulated other comprehensive income (loss) in the statement of shareholders’ equity. Corporate bonds with remaining maturities less than one year are classified as short-term, and those with remaining maturities greater than one year are classified as long-term. We consider all highly-liquid investments with maturities of three months or less when purchased, including money market funds, to be cash equivalents. Gains and losses on marketable security transactions are reported on the specific-identification method.
The fair value of our available-for-sale securities as of December 31, 2019 by maturity were as follows:
| Total | <1 Year | 1–3 Years | 3–5 Years | |||||||
| $ | 72,853,414 | $ | 21,933,123 | $ | 33,904,811 | $ | 17,015,480 | |||
Total available-for-sale securities represented approximately 90% of our total assets. Marketable securities as of December 31, 2019 had remaining maturities between 10 and 50 months.
Generally accepted accounting principles establish a framework for measuring fair value, provide a definition of fair value, and prescribe required disclosures about fair-value measurements. Generally accepted accounting principles define fair value as the price that would be received to sell an asset or paid to transfer a liability. Fair value is a market-based measurement that should be determined using assumptions that market participants would use in pricing an asset or liability. Generally accepted accounting principles utilize a valuation hierarchy for disclosure of fair value measurements. The categorization within the valuation hierarchy is based on the lowest level of input that is significant to the fair value measurement. The categories within the valuation hierarchy are described as follows:
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Level 1 – Financial instruments with quoted prices in active markets for identical assets or liabilities.
Level 2 – Financial instruments with quoted prices in active markets for similar assets or liabilities. Level 2 fair value measurements are determined using either prices for similar instruments or inputs that are either directly or indirectly observable, such as interest rates.
Level 3 – Inputs to the fair value measurement are unobservable inputs or valuation techniques.
Money market funds are included on the balance sheets in “Cash and cash equivalents.” Corporate bonds are included on the balance sheets in “Marketable securities, short term” and “Marketable securities, long term.”
The following table shows the estimated fair value of assets that were accounted for at fair value on a recurring basis:
| As of December 31, 2019 | As of March 31, 2019 | ||||||||||||||||
| Level 1 | Level 2 | Total | Level 1 | Level 2 | Total | ||||||||||||
| Money market funds | $ | 9,877,760 | $ | - | $ | 9,877,760 | $ | 6,703,809 | $ | - | $ | 6,703,809 | |||||
| Corporate bonds | - | 62,975,654 | 62,975,654 | - | 67,413,454 | 67,413,454 | |||||||||||
| Total | $ | 9,877,760 | $ | 62,975,654 | $ | 72,853,414 | $ | 6,703,809 | $ | 67,413,454 | $ | 74,117,263 | |||||
Our available-for-sale securities as of December 31 and March 31, 2019, aggregated into classes of securities, were as follows:
| As of December 31, 2019 | As of March 31, 2019 | ||||||||||||||||||||||||
Amortized Cost |
Gross Unrealized Holding Gains |
Gross Unrealized Holding Losses |
Estimated Fair Value |
Amortized Cost |
Gross Unrealized Gains |
Gross Unrealized Losses |
Estimated Fair Value |
||||||||||||||||||
| Money market funds |
$ | 9,877,760 | $ | - | $ | - | $ | 9,877,760 | $ | 6,703,809 | $ | - | $ | - | $ | 6,703,809 | |||||||||
| Corporate bonds | 62,083,066 | 902,126 | (9,538 | ) | 62,975,654 | 67,519,350 | 315,902 | (421,798 | ) | 67,413,454 | |||||||||||||||
| Total | $ | 71,960,826 | $ | 902,126 | $ | (9,538 | ) | $ | 72,853,414 | $ | 74,223,159 | $ | 315,902 | $ | (421,798 | ) | $ | 74,117,263 | |||||||
The following table shows the gross unrealized holding losses and fair value of our available-for-sale securities with unrealized holding losses, aggregated by class of securities and length of time that individual securities had been in a continuous unrealized loss position as of December 31 and March 31, 2019.
| Less Than 12 Months | 12 Months or Greater | Total | |||||||||||||||||||
| Estimated Fair Value |
Gross Unrealized Holding Losses |
Estimated Fair Value |
Gross Unrealized Holding Losses |
Estimated Fair Value |
Gross Unrealized Holding Losses |
||||||||||||||||
| As of December 31, 2019 | |||||||||||||||||||||
| Corporate bonds | $ | 4,169,606 | $ | (9,538 | ) | $ | - | $ | - | $ | 4,169,606 | $ | (9,538 | ) | |||||||
| Total | $ | 4,169,606 | $ | (9,538 | ) | $ | - | $ | - | $ | 4,169,606 | $ | (9,538 | ) | |||||||
| As of March 31, 2019 | |||||||||||||||||||||
| Corporate bonds | $ | - | $ | - | $ | 51,413,428 | $ | (421,798 | ) | $ | 51,413,428 | $ | (421,798 | ) | |||||||
| Total | $ | - | $ | - | $ | 51,413,428 | $ | (421,798 | ) | $ | 51,413,428 | $ | (421,798 | ) | |||||||
We did not consider any of our available-for-sale securities to be impaired as of December 31, 2019. None of the securities were impaired at acquisition, and subsequent declines in fair value are not attributed to declines in credit quality. When evaluating for impairment we assess indicators that include, but are not limited to, earnings performance, changes in underlying credit ratings, market conditions, bona fide offers to purchase or sell, and ability to hold until maturity. Because we believe it is more likely than not we will recover the cost basis of our investments, we did not consider any of our marketable securities to be impaired as of December 31, 2019.
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NOTE 6. INVENTORIES
Inventories are shown in the following table:
| December
31, 2019 |
March
31, 2019 |
||||
| Raw materials | $ | 1,139,246 | $ | 1,130,917 | |
| Work in process | 1,906,679 | 2,325,238 | |||
| Finished goods | 1,113,817 | 808,721 | |||
| Total inventories | $ | 4,159,742 | $ | 4,264,876 | |
NOTE 7. STOCK-BASED COMPENSATION
There were no stock-based compensation expenses for the third quarters of fiscal 2020 or 2019. Stock-based compensation expense was $48,360 for the first nine months of fiscal 2020 and $93,360 for the first nine months of fiscal 2019. Stock-based compensation expenses were due to the automatic issuance to our non-employee directors of options to purchase 1,000 shares of stock on their reelection to our Board. We calculate the share-based compensation expense using the Black-Scholes standard option-pricing model.
NOTE 8. INCOME TAXES
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.
We had no unrecognized tax benefits as of December 31, 2019, and we do not expect any significant unrecognized tax benefits within 12 months of the reporting date. We recognize interest and penalties related to income tax matters in income tax expense. As of December 31, 2019 we had no accrued interest related to uncertain tax positions. The tax years 2016 through 2018 remain open to examination by the major taxing jurisdictions to which we are subject.
NOTE 9. LEASES
We conduct our operations in a leased facility under a non-cancellable lease through December 31, 2020. Our lease does not provide an implicit rate, so we used our incremental borrowing rate to determine the present value of lease payments. Lease expense is recognized on a straight-line basis over the lease term. Variable lease costs consist primarily of common area maintenance and real estate taxes which are paid based on actual costs incurred by the lessor.
Details of our operating lease are as follows:
| Quarter Ended December 31, 2019 |
Nine Months Ended December 31, 2019 |
||||||
| Operating lease cost | $ | 38,641 | $ | 115,923 | |||
| Variable lease cost | 30,227 | 90,681 | |||||
| Total | 68,868 | $ | 206,604 | ||||
| Cash paid for amounts included in the measurement of lease liabilities | |||||||
|
Operating cash flows for leases
|
$ | 43,365 | $ | 130,095 | |||
| Remaining lease term | 1 year | ||||||
| Discount rate | 3.5 | % | |||||
| The following table presents the maturities of lease liabilities as of December 31, 2019: |
|||||||
| Year Ending March 31 | Operating Leases | ||||||
| 2020 | $ | 44,433 | |||||
| 2021 | 133,299 | ||||||
| Total lease payments | 177,732 | ||||||
| Imputed lease interest | (2,816 | ) | |||||
| Total lease liabilities | $ | 174,916 | |||||
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NOTE 10. STOCK REPURCHASE PROGRAM
On January 21, 2009 we announced that our Board of Directors authorized the repurchase of up to $2,500,000 of our Common Stock, and on August 27, 2015 we announced that our Board authorized $5,000,000 of additional repurchases. We did not repurchase any of our Common Stock under the program during the quarter ended December 31, 2019. The remaining authorization was $4,540,806 as of December 31, 2019. The Repurchase Program may be modified or discontinued at any time without notice.
NOTE 11. INFORMATION AS TO EMPLOYEE STOCK PURCHASE, SAVINGS, AND SIMILAR PLANS
All of our employees are eligible to participate in our 401(k) savings plan the first quarter after reaching age 21. Employees may contribute up to the Internal Revenue Code maximum. We make matching contributions of 100% of the first 3% of participants’ salary deferral contributions. Our matching contributions were $22,456 for the third quarter of fiscal 2020, $68,512 for the first nine months of fiscal 2020, $21,733 for the third quarter of fiscal 2019, and $67,327 for the first nine months of fiscal 2019.
NOTE 12. SUBSEQUENT EVENTS
On January 22, 2020 we announced that our Board had declared a quarterly cash dividend of $1.00 per share of Common Stock to be paid February 28, 2020 to shareholders of record as of the close of business February 3, 2020.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
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, uncertainties related to the economic environments in the industries we serve, uncertainties related to future sales and revenues, risks related to changes in tariffs and other trade barriers, 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, 2019.
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, 2019. As of December 31, 2019 our critical accounting policies and estimates continued to include investment valuation, inventory valuation, and deferred tax assets estimation.
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Quarter ended December 31, 2019 compared to quarter ended December 31, 2018
The table shown below summarizes the percentage of revenue and quarter-to-quarter changes for various items:
| Percentage
of Revenue Quarter Ended December 31 |
Quarter- to-Quarter Change |
|||||||
| 2019 | 2018 | |||||||
| Revenue | ||||||||
|
Product sales
|
95.3 | % | 95.6 | % | 2.8 | % | ||
|
Contract research and development
|
4.7 | % | 4.4 | % | 9.2 | % | ||
| Total revenue | 100.0 | % | 100.0 | % | 3.1 | % | ||
| Cost of sales | 19.5 | % | 18.7 | % | 8.1 | % | ||
| Gross profit | 80.5 | % | 81.3 | % | 2.0 | % | ||
| Expenses | ||||||||
|
Research and development
|
12.0 | % | 17.9 | % | (31.5 | )% | ||
|
Selling, general, and administrative
|
5.1 | % | 4.3 | % | 22.0 | % | ||
| Total expenses | 17.1 | % | 22.2 | % | (21.2 | )% | ||
| Income from operations | 63.4 | % | 59.1 | % | 10.7 | % | ||
| Interest income | 6.9 | % | 7.3 | % | (3.0 | )% | ||
| Income before taxes | 70.3 | % | 66.4 | % | 9.2 | % | ||
| Provision for income taxes | 12.6 | % | 11.8 | % | 10.0 | % | ||
| Net income | 57.7 | % | 54.6 | % | 9.0 | % | ||
Total revenue for the quarter ended December 31, 2019 (the third quarter of fiscal 2020) increased 3% compared to the quarter ended December 31, 2018 (the third quarter of fiscal 2019). The increase was due to an 3% increase in product sales and a 9% increase in contract research and development revenue.
The increase in product sales from the prior-year quarter was primarily due to increased purchases by existing customers. The increase in contract research and development revenue the third quarter of fiscal 2020 was due to the timing of progress towards contract completion.
Total expenses decreased 21% in the third quarter of fiscal 2020 compared to the third quarter of fiscal 2019 due to a 32% decrease in research and development expense, partially offset by a 22% increase in selling, general, and administrative expense. The decrease in research and development expense was primarily due to staffing changes and the completion of certain product development activities. The increase in selling, general, and administrative expense was primarily due to staffing changes.
Interest income for the third quarter of fiscal 2020 decreased 3% due to a decrease in the average interest rates on our marketable securities and money market funds.
The 9% increase in net income in the third quarter of fiscal 2020 compared to the prior-year quarter was primarily due to a decrease in total expenses and an increase in total revenue.
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Nine months ended December 31, 2019 compared to nine months ended December 31, 2018
The table shown below summarizes the percentage of revenue and period-to-period changes for various items:
| Percentage
of Revenue Nine Months Ended Dec. 31 |
Period- to-Period Change |
|||||||
| 2019 | 2018 | |||||||
| Revenue | ||||||||
|
Product sales
|
95.7 | % | 95.4 | % | (7.4 | )% | ||
|
Contract research and development
|
4.3 | % | 4.6 | % | (14.4 | )% | ||
| Total revenue | 100.0 | % | 100.0 | % | (7.8 | )% | ||
| Cost of sales | 19.2 | % | 18.8 | % | (5.5 | )% | ||
| Gross profit | 80.8 | % | 81.2 | % | (8.3 | )% | ||
| Expenses | ||||||||
|
Research and development
|
13.9 | % | 14.8 | % | (13.5 | )% | ||
|
Selling, general, and administrative
|
5.3 | % | 4.6 | % | 5.3 | % | ||
| Total expenses | 19.2 | % | 19.4 | % | (9.0 | )% | ||
| Income from operations | 61.6 | % | 61.8 | % | (8.1 | )% | ||
| Interest income | 7.0 | % | 6.3 | % | 2.5 | % | ||
| Income before taxes | 68.6 | % | 68.1 | % | (7.1 | )% | ||
| Provision for income taxes | 10.7 | % | 12.3 | % | (20.1 | )% | ||
| Net income | 57.9 | % | 55.8 | % | (4.2 | )% | ||
Total revenue for the nine months ended December 31, 2019 decreased 8% compared to the nine months ended December 31, 2018, due to a 7% decrease in product sales and a 14% decrease in contract research and development revenue.
The decrease in product sales from the prior-year period was due to decreased purchase volumes by existing customers. The decrease in contract research and development revenue was due to the completion of certain contracts.
Total expenses decreased 9% for the first nine months of fiscal 2020 compared to the first nine months of fiscal 2019 due to a 14% decrease in research and development expense, partially offset by a 5% increase in selling, general, and administrative expense. The decrease in research and development expense was primarily due to staffing changes and the completion of certain product development activities. The increase in selling, general, and administrative expense was primarily due to staffing changes.
Interest income for the first nine months of fiscal 2020 increased 3% due to an increase in the average interest rates on our marketable securities.
The provision for income taxes for the first nine months of fiscal 2020 decreased 20% due to tax benefits from the Federal Tax Reform Act enacted in 2017. We currently expect our tax rate for the fourth quarter of fiscal 2020 to be approximately 18%, and our rate for the full fiscal year to be approximately 16%.
The 4% decrease in net income in the first nine months of fiscal 2020 compared to the prior-year period was primarily due to a decrease in total revenue, partially offset by a decrease in research and development expense and a decrease in the provision for income taxes.
Comprehensive income increased 2% to $11,940,161 compared to $11,695,165 for the prior-year period. The increase in comprehensive income was due to an unrealized gain from marketable securities of $780,016 compared to $46,101 in the prior-year period, partially offset by a decrease in net income. The unrealized gain was due to strong bond market conditions in the first nine months of fiscal 2020.
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Liquidity and capital resources
Overview
Cash and cash equivalents were $10,153,173 as of December 31, 2019 compared to $6,877,304 as of March 31, 2019. The $3,275,869 increase in cash and cash equivalents during the nine months ended December 31, 2019 was due to $12,536,305 in net cash provided by operating activities and $5,277,594 of cash provided by investing activities, partially offset by $14,538,030 of cash used in financing activities. We currently believe our working capital and cash generated from operations will be adequate for our needs at least for the next 12 months.
Investing Activities
Cash provided by investing activities in the nine months ended December 31, 2019 was due to $12,500,000 of marketable security maturities, partially offset by $7,196,330 of marketable securities purchases and $26,076 of fixed asset purchases.
Financing Activities
Cash used in financing activities in the first nine months of fiscal 2020 was due to $14,538,030 of cash dividends paid to shareholders. In addition to the dividends already paid in fiscal 2020, on January 22, 2020 we announced that our Board had declared a cash quarterly dividend of $1.00 per share of common stock, or $4,846,010 based on shares outstanding as of January 17, 2020, to be paid February 28, 2020. We plan to fund dividends through cash provided by operating activities and proceeds from maturities and sales 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.
Item 4. Controls and Procedures.
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 Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. Based on such evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as December 31, 2019, our disclosure controls and procedures were effective.
Changes in Internal Controls
During the quarter ended December 31, 2019, 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.
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Table of Contents
Item 1. Legal Proceedings.
In the ordinary course of business we may become involved in litigation. At this time we are not aware of any material pending or threatened legal proceedings or other proceedings contemplated by governmental authorities that we expect would have a material adverse impact on our future results of operation and financial condition.
Item 1A. Risk Factors.
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, 2019.
Item 4. Mine Safety Disclosures.
Not applicable.
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Item 6. Exhibits.
|
Exhibit #
|
Description
|
| 31.1 | Certification by Daniel A. Baker pursuant to Rule 13a-14(a)/15d-14(a). |
| 31.2 | Certification by Curt A. Reynders pursuant
to Rule 13a-14(a)/15d-14(a). |
| 32 | Certification by Daniel A. Baker and Curt
A. Reynders pursuant to 18 U.S.C. Section 1350. |
| 101.INS | XBRL Instance Document |
| 101.SCH | XBRL Taxonomy Extension Schema Document |
| 101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document |
| 101.DEF | XBRL Taxonomy Extension Definition Linkbase Document |
| 101.LAB | XBRL Taxonomy Extension Label Linkbase Document |
| 101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document |
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| NVE CORPORATION | |
| (Registrant) | |
|
January 22, 2020
|
/s/ DANIEL A. BAKER |
|
Date
|
Daniel A. Baker |
| President and Chief Executive Officer | |
|
January 22, 2020
|
/s/ CURT A. REYNDERS
|
|
Date
|
Curt A. Reynders |
| Chief Financial Officer | |
19
Exhibit 31.1
CERTIFICATION
I, Daniel A. Baker,
certify that:
1. I have reviewed this Quarterly Report on Form 10-Q of NVE Corporation;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.
The registrant’s other certifying
officer(s) and I are responsible for establishing and maintaining disclosure controls
and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and
internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f)
and 15d-15(f)) for the registrant and have:
(a)
Designed such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the period
in which this report is being prepared;
(b)
Designed such internal control over financial reporting, or caused such
internal control over financial reporting to be designed under our supervision,
to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance
with generally accepted accounting principles;
(c)
Evaluated the effectiveness of the registrant’s disclosure controls
and procedures and presented in this report our conclusions about the effectiveness
of the disclosure controls and procedures, as of the end of the period covered
by this report based on such evaluation; and
(d)
Disclosed in this report any change in the registrant’s internal
control over financial reporting that occurred during the registrant’s most
recent fiscal quarter (the registrant’s fourth fiscal quarter in the case
of an annual report) that has materially affected, or is reasonably likely to
materially affect, the registrant’s internal control over financial reporting;
and
5.
The registrant’s other certifying
officer(s) and I have disclosed, based on our most recent evaluation of internal
control over financial reporting, to the registrant’s auditors and the audit
committee of the registrant’s board of directors (or persons performing the
equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: January 22, 2020
| /s/ DANIEL A. BAKER | ||
| Daniel A. Baker | ||
| President and Chief Executive Officer | ||
Exhibit 31.2
CERTIFICATION
I, Curt A. Reynders, certify
that:
1. I have reviewed this Quarterly Report on Form 10-Q of NVE Corporation;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.
The registrant’s other certifying
officer(s) and I are responsible for establishing and maintaining disclosure controls
and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and
internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f)
and 15d-15(f)) for the registrant and have:
(a)
Designed such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the period
in which this report is being prepared;
(b)
Designed such internal control over financial reporting, or caused such
internal control over financial reporting to be designed under our supervision,
to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance
with generally accepted accounting principles;
(c)
Evaluated the effectiveness of the registrant’s disclosure controls
and procedures and presented in this report our conclusions about the effectiveness
of the disclosure controls and procedures, as of the end of the period covered
by this report based on such evaluation; and
(d)
Disclosed in this report any change in the registrant’s internal
control over financial reporting that occurred during the registrant’s most
recent fiscal quarter (the registrant’s fourth fiscal quarter in the case
of an annual report) that has materially affected, or is reasonably likely to
materially affect, the registrant’s internal control over financial reporting;
and
5.
The registrant’s other certifying
officer(s) and I have disclosed, based on our most recent evaluation of internal
control over financial reporting, to the registrant’s auditors and the audit
committee of the registrant’s board of directors (or persons performing the
equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: January 22, 2020
|
| /s/ CURT A. REYNDERS | |
| Curt A. Reynders | ||
| Chief Financial Officer | ||
Exhibit 32
CERTIFICATION PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002 (18 U.S.C. SECTION 1350)
The undersigned certify pursuant to 18 U.S.C. Section 1350, that to the undersigned’s knowledge:
1. The accompanying Quarterly Report of NVE Corporation (the “Company”) on Form 10-Q for the quarter ended December 31, 2019, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: January 22, 2020
|
/s/ DANIEL A. BAKER |
|
|
Daniel A. Baker | |
|
President and Chief Executive Officer | |
|
/s/ CURT A. REYNDERS |
|
|
Curt A. Reynders | |
|
Chief Financial Officer | |
A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.