What changed in this filing

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Item 1. Financial Statements

2022-10-19 compared with 2022-07-20 · 250 added, 64 removed, 361 unchanged (47% of the section changed)

2 unchanged sentences

BALANCE SHEETS

June 30, 2022

September 30, 2022

March 31, 2022*

65 unchanged sentences

Common stock, $ 0.01 par value, 6,000,000 shares authorized;

4,830,826 issued and outstanding as of June 30 and March 31, 2022

4,830,826 issued and outstanding as of September 30 and March 31, 2022

48,308  

3 unchanged sentences

19,256,485  

Accumulated other comprehensive income

Accumulated other comprehensive (loss)

( 1,784,035 )  

12 unchanged sentences

STATEMENTS OF INCOME

Quarter Ended June 30

Quarter Ended September 30

Product sales

14 unchanged sentences

STATEMENTS OF COMPREHENSIVE INCOME

Quarter Ended June 30

Quarter Ended September 30

Unrealized loss from marketable securities, net of tax

2 unchanged sentences

NVE CORPORATION

STATEMENTS OF INCOME

Six Months Ended September 30

Product sales

$ 17,587,500  

Contract research and development

466,731  

Total revenue

18,054,231  

Cost of sales

4,054,628  

13,999,603  

Research and development

1,271,896  

Selling, general, and administrative

806,946  

Total expenses

2,078,842  

Income from operations

11,920,761  

Interest income

634,436  

Income before taxes

12,555,197  

Provision for income taxes

2,324,707  

$ 10,230,490  

Net income per share –

$ 2.12  

Net income per share –

$ 2.12  

Cash dividends declared per common share

$ 2.00  

Weighted average shares outstanding

4,830,826  

STATEMENTS OF COMPREHENSIVE INCOME

Six Months Ended September 30

Unrealized loss from marketable securities, net of tax

Comprehensive income

See accompanying notes.

NVE CORPORATION

STATEMENTS OF SHAREHOLDERS ’

9 unchanged sentences

Comprehensive income:

Unrealized loss on marketable securities, net of tax  

( 338,553 )  

Net income  

4,140,116  

Total comprehensive income  

3,801,563  

Stock-based compensation  

Cash dividends declared ($ 1.00 per share of common stock)  

( 4,830,826 )  

Balance as of June 30, 2022  

4,830,826  

48,308  

19,263,619  

( 656,673 )  

44,887,746  

63,543,000  

Comprehensive income:

Unrealized loss on marketable securities, net of tax

( 1,127,362 )

6,090,373  

3 unchanged sentences

Stock-based compensation

39,951  

Cash dividends declared ($ 1.00 per share of common stock)

1 unchanged sentence

( 4,830,826 )

Balance as of June 30, 2022

Balance as of September 30, 2022

4,830,826  

8 unchanged sentences

Comprehensive

Income (Loss)

Balance as of March 31, 2021

11 unchanged sentences

3,489,401  

Stock-based compensation  

Cash dividends declared ($ 1.00 per share of common stock)  

( 4,833,232 )  

Balance as of June 30, 2021  

4,833,232  

48,332  

19,345,365  

1,010,954  

49,150,698  

69,555,349  

Comprehensive income:

Unrealized loss on marketable securities, net of tax  

( 197,034 )  

Net income  

3,646,507  

Total comprehensive income  

3,449,473  

Stock-based compensation

56,999  

Cash dividends declared ($ 1.00 per share of common stock)

1 unchanged sentence

( 4,833,232 )

Balance as of June 30, 2021

Balance as of September 30, 2021

4,833,232  

7 unchanged sentences

STATEMENTS OF CASH FLOWS

Quarter Ended June 30

Six Months Ended September 30

OPERATING ACTIVITIES

6 unchanged sentences

Prepaid expenses and other assets

Accounts payable and other liabilities

Accounts payable and accrued expenses

Net cash provided by operating activities

8 unchanged sentences

Cash used in financing activities

Increase (decrease) in cash and cash equivalents

(Decrease) increase in cash and cash equivalents

Cash and cash equivalents at beginning of period

12 unchanged sentences

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, 2022.

The results of operations for the quarter ended June 30, 2022 are not necessarily indicative of the results that may be expected for the full fiscal year ending March 31, 2023.

The results of operations for the quarter and six months ended September 30, 2022 are not necessarily indicative of the results that may be expected for the full fiscal year ending March 31, 2023.

Significant accounting policies

A description of our significant accounting policies is provided in Note 2 to the Financial Statements in our Annual Report on Form 10 -K for the year ended March 31, 2022.

As of June 30, 2022, there were no changes to our significant accounting policies.

As of September 30, 2022, there were no changes to our significant accounting policies.

RECENTLY ISSUED ACCOUNTING STANDARDS

45 unchanged sentences

The following tables show the components of diluted shares:

Quarter Ended June 30

Quarter Ended September 30

Weighted average common shares outstanding –

4,830,826  

Dilutive effect of stock options

Shares used in computing net income per share –

4,830,956  

Six Months Ended September 30

Weighted average common shares outstanding –

basic 4,830,826  

Dilutive effect of stock options 101  

Shares used in computing net income per share –

diluted 4,830,927  

FAIR VALUE OF FINANCIAL INSTRUMENTS

4 unchanged sentences

Gains and losses on marketable security transactions are reported on the specific-identification method.

Contractual maturities of available-for-sale securities as of June 30, 2022 are as follows: 

Contractual maturities of available-for-sale securities as of September 30, 2022 are as follows: 

1–3 Years

3 unchanged sentences

$ 24,387,794  

$ 15,126,891  

Total available-for-sale securities represented approximately 76 % of our total assets.

Marketable securities as of June 30, 2022 had remaining maturities between three weeks three years.

Marketable securities as of September 30, 2022 had remaining maturities between 14 weeks and 79 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.

15 unchanged sentences

The following table shows the estimated fair value of assets that were accounted for at fair value on a recurring basis:

As of June 30, 2022

As of September 30, 2022

As of March 31, 2022

Money market funds

$ 1,757,277  

$ 6,756,993  

Corporate bonds

Our available-for-sale securities as of June 30 and March 31, 2022, aggregated into classes of securities, were as follows:

As of June 30, 2022

49,841,332  

45,153,894  

$ 1,757,277  

$ 49,841,332  

$ 51,598,609  

$ 6,756,993  

$ 45,153,894  

Our available-for-sale securities as of September 30 and March 31, 2022, aggregated into classes of securities, were as follows:

As of September 30, 2022

As of March 31, 2022

Money market funds

$ 1,757,277  

$ 6,756,993  

Corporate bonds

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 June 30 and March 

52,125,043  

( 2,283,711 )  

49,841,332  

45,561,114  

230,085  

$ 53,882,320  

$ ( 2,283,711 )  

$ 51,598,609  

$ 52,318,107  

$ 230,085  

$ ( 637,305 )

Less Than 12 Months

12 Months or Greater

As of June 30, 2022

As of September 30, 2022

Corporate bonds

$ 40,510,241  

$ ( 1,327,302 )  

$ 9,331,091  

$ ( 956,409 )  

$ 49,841,332  

$ ( 2,283,711 )

$ 40,510,241  

$ ( 1,327,302 )  

$ 9,331,091  

$ ( 956,409 )  

$ 49,841,332  

$ ( 2,283,711 )

As of March 31, 2022

Corporate bonds

$ 6,306,750  

$ 9,738,338  

$ ( 613,578 )  

$ 16,045,088  

$ ( 637,305 )

$ 6,306,750  

$ 9,738,338  

$ ( 613,578 )  

$ 16,045,088  

$ ( 637,305 )

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 June 30, 2022.

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 September 30, 2022.

Inventories are shown in the following table:

June 30, 2022

September 30, 2022  

March 31, 2022

Raw materials

$ 1,324,358  

Work in process

3,829,498  

Finished goods

640,993  

Total inventories

$ 5,794,849  

STOCK-BASED COMPENSATION

Stock-based compensation expense was $ 7,134 for the first quarter of fiscal 2023 and $ 7,238 for the first quarter of fiscal 2022.

We calculate the share-based compensation expense using the Black-Scholes standard option-pricing model. 

Stock-based compensation expense was $ 39,951 for the second quarter of fiscal 2023, $ 56,999 for the second quarter of fiscal 2022, $ 47,085 for the first six months of fiscal 2023, and $ 64,237 for the first six months of fiscal 2022.

We calculate the share-based compensation expense using the Black-Scholes standard option-pricing model.

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 June 30, 2022, and we do not expect any significant unrecognized tax benefits within 12 months of the reporting date.

Federal and state income taxes payable as of September 

30, 2022 of approximately $ 1,457,000 are included in accrued expenses.

We had no unrecognized tax benefits as of September 30, 2022, 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 June 30, 2022 we had no accrued interest related to uncertain tax positions.

As of September 30, 2022 we had no accrued interest related to uncertain tax positions.

The tax years 2018 through 2022 remain open to examination by the major taxing jurisdictions to which we are subject. 

4 unchanged sentences

Details of our operating lease are as follows: 

Quarter Ended June 30, 2022

Operating lease cost

Variable lease cost

Cash paid for amounts included in the measurement of lease liabilities

Quarter Ended September 30, 2022 

Six Months Ended September 30, 2022

Operating lease cost $ 42,515  

$ 85,031  

Variable lease cost  

30,126  

61,315  

Total $ 72,641  

$ 146,346  

Cash paid for amounts included in the measurement of lease liabilities  

Operating cash flows for leases

Remaining lease term

Discount rate

 The following table presents the maturities of lease liabilities as of June 30, 2022:

Year Ending March 31

Operating Leases

Total lease payments

Imputed lease interest

Total lease liabilities

$ 42,723  

87,156  

Remaining lease term 42 months  

Discount rate  

 The following table presents the maturities of lease liabilities as of September 30, 2022:

Year Ending March 31 Operating Leases  

78,487  

159,592  

163,224  

165,947  

Total lease payments  

567,250  

Imputed lease interest  

Total lease liabilities $ 532,771  

STOCK REPURCHASE PROGRAM

5 unchanged sentences

We intend to finance any stock repurchases with cash provided by operating activities or maturating marketable securities.

The remaining authorization was $ 3,598,519 as of June 30, 2022.

We did not repurchase any of our Common Stock during the first quarter of fiscal 2023.

The remaining authorization was $ 3,598,519 as of September 30, 2022.

We did not repurchase any of our Common Stock during the first six months of fiscal 2023.

INFORMATION AS TO EMPLOYEE STOCK PURCHASE, SAVINGS, AND SIMILAR PLANS

3 unchanged sentences

salary deferral contributions.

Our matching contributions were $ 28,426 f or the first quarter of fiscal 2023 and $ 28,584 for the first quarter of fiscal 20 22 .

Our matching contributions were $ 23,751 f or the second quarter of fiscal 2023, $ 26,831 for the second quarter of fiscal 2022, $ 52,177 for the first six months of fiscal 2023, and $ 55,415 for the first six months of fiscal 2022.

SUBSEQUENT EVENTS

On July 20, 2022 we announced that our Board had declared a quarterly cash dividend of $ 1.00 per share of Common Stock to be paid August 31, 2022 to shareholders of record as of the close of business August 1, 2022 .

On October 19, 2022 we announced that our Board had declared a quarterly cash dividend of $ 1.00 per share of Common Stock to be paid November 30, 2022 to shareholders of record as of the close of business October 31, 2022 .

Management’s Discussion and Analysis of Financial Condition and Results of Operations.

12 unchanged sentences

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

As of September 30, 2022 our critical accounting policies and estimates continued to include investment valuation, inventory valuation, and deferred tax assets estimation.

Quarter ended September 30, 2022 compared to quarter ended September 30, 2021

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

Percentage of Revenue

Quarter Ended June 30

Quarter Ended September 30

Product sales

9 unchanged sentences

Provision for income taxes

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).

Total revenue for the quarter ended September 30, 2022 (the second quarter of fiscal 2023) increased 57% compared to the quarter ended September 30, 2021 (the second quarter of fiscal 2022).

The increase was due to a 59 % increase in product sales and a 5% increase in contract research and development revenue.

The increase in product sales was primarily due to increased purchases by existing customers and new customers.

Sales increased in most of our markets and product lines.

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.

Total expenses decreased 7% for the second quarter of fiscal 2023 compared to the second quarter of fiscal 2022 due to a 5% decrease in research and development expense and a 10% decrease in selling, general, and administrative expense.

The decreases in expenses were primarily due to the reallocation of resources to revenue-generating activities.

Interest income for the second quarter of fiscal 2023 increased 19% due to an increase in our available-for-sale securities and an increase in their average interest rate.

The 67% increase in net income in the second quarter of fiscal 2023 compared to the prior-year quarter was primarily due to increased revenue and decreased expenses.

Six months ended September 30, 2022 compared to six months ended September 30, 2021

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

Percentage of Revenue

Six Months Ended September 30

Product sales

Contract research and development

Total revenue

Cost of sales

Research and development

Selling, general, and administrative

Total expenses

Income from operations

Interest income

Income before taxes

Provision for income taxes

Total revenue for the six months ended September 30, 2022 (the first six months of fiscal 2023) increased 29% compared to the six months ended September 30, 2021 (the first six months of fiscal 2022).

The increase was due to a 29% increase in product sales and a 19% increase in contract research and development revenue.

The increase in product sales was primarily due to increased purchases by existing customers and new customers.

Sales increased in most of our markets and product lines.

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

Gross profit as a percentage of revenue increased to 78% for the first six months of fiscal 2023 from 76% for the first six months of fiscal 2022 primarily due to increased prices partially offset by increased costs.

Total expenses decreased 16% for the first six months of fiscal 2023 compared to the first six months of fiscal 2022 due to a 16% decrease in research and development expense and a 15% decrease in selling, general, and administrative expense.

The decreases in expenses were primarily due to the reallocation of resources to revenue-generating activities.

Interest income for the first six months of fiscal 2023 increased 9% due to an increase in our available-for-sale securities and an increase in their average interest rate.

The 42% increase in net income in the first six months of fiscal 2023 compared to the prior-year period was primarily due to increased revenue and decreased expenses.

Supply Chain Disruptions

Supply chain disruptions related to the COVID-19 pandemic may have favorably affected product sales in the quarter and six months ended September 30, 2022 since we believe the disruptions may have been less severe for us than for our competitors.

We believe supply chain disruptions also had an unfavorable impact on our costs of sales.

Liquidity and Capital Resources

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.

Cash and cash equivalents were $3,583,539 as of September 30, 2022 compared to $10,449,510 as of March 31, 2022.

The $6,865,971 decrease in cash and cash equivalents during the first six months of fiscal 2023 was due to $9,661,652 of cash used in financing activities for dividend payments and $6,555,557 of cash used by investing activities, partially offset by $9,351,238 in net cash provided by operating 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.

Net cash provided by operating activities was $9,351,238 for the first six months of fiscal 2023 compared to $6,458,196 for the first six months of fiscal 2022.

Accounts receivable increased $1,155,585 during the first six months of fiscal 2023 primarily due to increased product sales.

Inventories increased $706,214 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.

Accounts payable and accrued expenses increased $890,822 due primarily due to a $1,504,462 increase in accrued expenses partially offset by a $544,272 decrease in accounts payable and a $69,368 net decrease in current and long-term operating lease liabilities.

The increase in accrued expenses was due to increases in income taxes payable and deferred revenue.

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.

Cash used by investing activities during the six months ended September 30, 2022 consisted of $25,381,057 of 

marketable securities purchases and $24,500 of fixed asset purchases, partially offset by $18,750,000 in proceeds from maturities of marketable securities and the receipt of a $100,000 tenant improvement allowance.

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.

We have ordered additional new production equipment to increase our production 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.

Cash used in financing activities during the six months ended September 30, 2022 consisted of $9,661,652 of cash dividends paid to shareholders.

In addition to cash dividends to shareholders paid in second quarter of fiscal 2023, on October 19, 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 October 14, 2022, to be paid November 30, 2022.

We plan to fund dividends through cash provided by operating activities and proceeds from maturities of marketable securities.

2 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements