NVEC

[usedcasting]

Glad to here your back in. I am holding on for this crazy ride but it is very scary. I,ve had to pull my finger off the sell button a couple of times.

uc.

[snowcat]

09/07/06
Youth would be an ideal state if it came a little later in life. – Herbert Henry Asquith

The stock markets were lower as homebuilders said that inventories were growing.  Houses will sell, but not at the prices they were a year ago – that makes for growing inventories as sellers have trouble lowering their prices.

Someone I know just bought a house listed in Florida at $267,000, for $190,000.  This is not a sellers market (especially during Florida's stormy season).

So if you are making less money on the sale of your home, you have less money to gamble.....er....invest in the market.  I just saw the movie, "Two for the Money", with Al Pacino on HBO.  It is about a gambling advisory service.  You will see a lot of similarities to the internet stock advisory services and it is scary (not the movie, the fact that folks will place big bets based on someone's opinion of a football game/stock)
http://www.twoforthemoney.net/

Speaking of gambling, online Mah Jongg Company, GIGM broke out of a funk with a 15% gain on 5x adv!  "Patience is important" is an old Mah Jongg saying. (I also like "remove fortune b4 you eat cookie").

The portfolio stunk pretty badly today with several stocks teetering on their support lines.  Good stocks like NUHC are showing signs of weakness while favorites like AAPL surged ahead to good gains.
http://finance.yahoo.com/q/bc?s=NUHC&t=1y
http://finance.yahoo.com/q/bc?s=AAPL&t=5d

Nano Company, NVEC dropped back to 30 ish on Wednesday and broke loose again today to hit $38!!!!!!! On about 12x adv!!!!!  When I saw it bouncing back this morning, I dove back in.  The pattern is similar to its performance in January, 2004 when it hit 60!!
If I had an advisory service, I would tell you to buy a few shares and ride the wave.  It is volatile, but it is getting a lot of attention!
http://finance.yahoo.com/q/bc?s=NVEC&t=5y

And computer seller, SYX, had another good day, up another 4% on 4x adv.
http://finance.yahoo.com/q?s=SYX

Cool cat likes these guys, CNST looks interesting:
http://finance.yahoo.com/q/cq?d=v1&s=bits+fuel+clec+usey+cnst

I hear so many complaints about the invasive security in the airports, but if you don't like it, don't fly.  Hey, it's a free country, you can drive, swim, buy your own plane, and there is no rule that you have to fly to get where you want to go.

Be careful out there, Snow

[kslifka]

NVEC...look at that G-spot...look at that volume....
This one is going higher

Why didn't I buy this??

[Melf Elf]

Thursday's bo was a good entry point. 

Thursday's breakout (August 18) was an outstanding entry!  It was a THIRD breakout!  Sorry that I didn't read this folder until today. 

Belated Applause. 

We will see 30

You almost saw 40...the high on September 19 was 39.85. 

25.44 hasn't been taken out, so the neckline might need to be redrawn, but it's looking toppy after an great rally.  The Right Shoulder would need to get taken out to start looking okay again.

Otherwise... 

[kslifka]

NVEC had a solid quarter and is up nearly $6 after hours.

NVEC a very unique company.

NVE Corporation Reports Fourth Quarter and Fiscal Year Results
Wednesday May 2, 4:05 pm ET
Net Income Increases 151 Percent for Fourth Quarter and 166 Percent for Fiscal Year

EDEN PRAIRIE, Minn., May 2, 2007 (PRIME NEWSWIRE) -- NVE Corporation (NasdaqCM:NVEC - News) announced today financial results for the quarter and fiscal year ended March 31, 2007.

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Product sales for the fourth quarter of fiscal 2007 increased 50% over the prior-year quarter to $4.19 million from $2.80 million. Total revenue, consisting of product sales and contract research and development revenue, increased 31% to $4.57 million for the fourth quarter of fiscal 2007 from $3.48 million in the prior-year quarter. Net income for the fourth quarter of fiscal 2007 increased 151% to $1.55 million, or $0.33 per diluted share, compared to $619,744, or $0.13 per share, for the prior-year quarter.

For fiscal 2007, product sales increased 73% to $14.4 million from $8.35 million for fiscal 2006. Total revenue increased 35% to $16.5 million for fiscal 2007 from $12.2 million for the prior year. Net income for fiscal 2007 increased 166% to $4.78 million, or $1.00 per diluted share, compared to $1.80 million, or $0.39 per share, for fiscal 2006.

``We are pleased to report record revenue and net income for the fourth quarter and fiscal year,'' said NVE President and Chief Executive Officer Daniel A. Baker, Ph.D. ``Net income for the quarter more than doubled, driven by strong product sales and increased gross profit margins. We enter fiscal 2008 with a solid balance sheet, products that are in demand, and an excellent intellectual property portfolio.''

NVE is a leader in the practical commercialization of spintronics, a nanotechnology that many experts believe represents the next generation of microelectronics. NVE licenses its MRAM intellectual property and sells spintronic sensors and couplers to revolutionize data sensing and transmission.

[kslifka]

NVEC had a great earnings released last week and continues indicated huge growth and no debt.    NVEC put in a little G-pattern Friday which I didn't think it could do so quickly...I think this one will move to the $45 to $46 range in quite a hurry with such a bullish move last week.  I have only a small lot of shares right now but may buy more....I will watch closely next week.  I really would like to see the 9ema get closer to the price but it may not happen before the price goes higher.

[kslifka]

After a couple days of consolidation...NVEC looks ready to move higher.  Would have like to see it close above 13.85...but I think it can make that mini-G-pattern if the market is right.

[kslifka]

Updated chart on NVEC.   I still think this one will explode with-in the next few trading sessions..  NVEC had amazing net operating margins of 42%.   Revenues of $16.9 million...so for the full year one would at least expect revenues of $68 million for the year end.  If anyone can find anything wrong with the fundamentals of NVEC...please let me know.  I'm hoping it has a run (and then some) like last fall.

[kslifka]

Still waiting for the leg up...looking like the MACD will make a "Kiss"  tomorrow or Friday.   

Major support at 32.27.

NVEC's fundamentals seem so sweet.

[kslifka]

O.K.  NVEC is finally ready to move to the next level I see between $40 and $45.

It's pulling back intra-day here, but it looks ready to move up this aftenoon with above normal volume.

Fundamentals for NVEC are great and I think this will be a $60-$65 stock later this year.

[kslifka]

Finally.................

[kslifka]

NVEC had a dissapointing day Thursday and not much recovery on Friday.  Looks like shorts have control for now. 

Any positive news should catapult this stock.  With the fundamentals and growth I think NVEC should be $60/share.

Read the latest annual report...it's long:

156% increase in annual net income compared to 2006

http://biz.yahoo.com/e/070525/nvec10-k.html

5-May-2007

Annual Report


ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION.
You should read this discussion together with our financial statements and the notes to those financial statements included in this Report. In addition to historical information, the following discussion contains forward-looking information that involves risks and uncertainties. Our actual future results could differ materially from those presently anticipated due to a variety of factors, including those discussed in Item 1A of this Report.

General
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. We manufacture high-performance spintronic products including sensors and couplers to revolutionize data sensing and transmission. We are also a licensor of spintronic magnetoresistive random access memory technology, commonly known as MRAM.

Application of Critical Accounting Policies and Estimates In accordance with SEC guidance, those material accounting policies that we believe are the most critical to an investor's understanding of our financial results and condition and require complex management judgment are discussed below.

Research and Development Contract Percentage of Completion Estimation We recognize research and development contract revenue and gross profit as work is performed, based on actual costs incurred. We apply the percentage-of-completion method to firm-fixed-price contracts. This requires us to make estimates of the percentage of completion of firm-fixed-price contracts. If increases in projected costs-to-complete are sufficient to create a loss contract, the entire estimated loss is charged to operations in the period the loss first becomes known. This estimate has not affected our financial statements in fiscal years 2007, 2006, or 2005. Increases in projected costs to complete contracts could materially impact our future results, however.

Product Warranty Estimation
We maintain a reserve for warranty claims based on the trend in the historical ratio of claims to sales, releases of new products and other factors. The warranty period for our products is generally one year. Although we believe the likelihood to be relatively low, claims experience could be materially different from actual results because of the introduction of new products, manufacturing changes that could impact product quality, or as yet unrecognized defects in products sold. As of March 31, 2007 and 2006 our reserves for estimated warranty claims were not material to our financial statements.

Inventory Reserves Estimation
We maintain reserves for potentially excess, obsolete, and slow-moving inventory. The amounts of these reserves are based upon expected product lives, competitive conditions, industry conditions, and forecasted sales demand. Our results could be materially different if demand for our products decreased because of economic or competitive conditions, length of an industry downturn, or if products become obsolete because of technical advancements by us or in the industry. Alternatively, if we are able to sell previously reserved inventory, we reverse a portion of the reserve. Changes in inventory reserves are recorded as a component of cost of sales. As of March 31, 2007 our obsolescence reserve was $240,000 compared to $145,000 at March 31, 2006. The increase was due to additional product considered slow moving.

Allowance for Doubtful Accounts Estimation We must make estimates of the uncollectibility of our accounts receivable. The most significant risk is the risk of sudden unexpected deterioration in financial condition of a significant customer that is not considered in the allowance. We specifically analyze accounts receivable, historical bad debts, and customer credit-worthiness when evaluating the adequacy of the allowance for doubtful accounts. Our results could be materially impacted if the financial condition of a significant customer deteriorated and related accounts receivable are deemed uncollectible. Our allowance for doubtful accounts was $15,000 at March 31, 2007 and 2006. We expect our allowance for doubtful accounts to remain a relatively small percentage of our accounts receivable because much of our receivables are with large customers, distributors, and U.S. Government agencies, all of which we consider generally credit-worthy. Our allowance for doubtful accounts could increase in the future if larger portions of our sales come from small end-user customers.

Deferred Tax Assets Estimation
In determining the carrying value of our net deferred tax assets, we must assess the likelihood of sufficient future taxable income in certain tax jurisdictions, based on estimates and assumptions to realize the benefit of these assets. We evaluate the realizability of the deferred assets quarterly and assess the need for valuation allowances or reduction of existing allowances quarterly. In fiscal 2005 we reduced the amount of our valuation allowances based upon our history and our expectations for taxable income.

We began recognizing tax expenses for reporting purposes in fiscal 2006 because we had exhausted our net operating losses net of stock based compensation. Under Statement of Financial Accounting Standards (SFAS) No. 109, Accounting for Income Taxes, stock-based compensation deductions for tax return purposes do not reduce taxes reported for book purposes but are credited to "Additional paid-in capital." As of March 31, 2007, our deferred tax assets were $1,328,106 with a related valuation allowance of nil, compared to $3,432,320 with a valuation allowance of $1,855,848 as of March 31, 2006. Deferred tax assets included $527,442 of stock-based compensation deductions as of March 31, 2007 compared to $2,866,868 as of March 31, 2006. These amounts could be subject to an Internal Revenue Code Section 382 limitation.

Results of Operations

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

                                                                         Period-to-Period Change
                                   Percentage of Revenue                    Years Ended March 31
                                    Year Ended March 31                2006 to                  2005 to
                                 2007         2006        2005          2007                      2006
Revenue
Product sales                    87.6 %       68.6 %      47.5  %       72.8   %                 51.1  %
Contract research and
development                      12.4 %       31.4 %      52.5  %      (46.8  )%                (37.2 )%
Total revenue                   100.0 %      100.0 %     100.0  %       35.3   %                  4.8  %
Cost of sales                    35.2 %       51.1 %      60.4  %       (6.9  )%                (11.3 )%
Gross profit                     64.8 %       48.9 %      39.6  %       79.3   %                 29.3  %
Total expenses                   25.1 %       28.6 %      28.1  %       18.6   %                  6.7  %
Income from operations           39.8 %       20.3 %      11.5  %      164.9   %                 83.9  %
Net interest and other
income                            3.9 %        3.0 %       2.4  %       74.8   %                 33.9  %
Income before taxes              43.7 %       23.3 %      13.9  %      153.2   %                 75.4  %
Income tax provision
(benefit)                        14.7 %        8.5 %      (1.2 )%
Net income                       29.0 %       14.8 %      15.1  %      165.9   %                  2.2  %


Total revenue for fiscal 2007 increased 35% to $16,460,830 compared to $12,170,526 in fiscal 2006, and increased 5% for fiscal 2006 compared to $11,615,570 in fiscal 2005. The increases in both fiscal years were due to increases in product sales partially offset by decreases in research and development revenue.

Product sales increased 73% to $14,425,632 in fiscal 2007 from $8,345,967 in fiscal 2006. Fiscal 2006 product sales increased 51% from $5,522,250 in fiscal 2005. The increases in both years were due to increased sales of both spintronic sensors and spintronic couplers.

Contract research and development revenue decreased 47% for fiscal 2007 compared to fiscal 2006, and decreased 37% for fiscal 2006 compared to fiscal 2005. Both decreases were due to shifts to company-funded research from contract-funded research and decreases in U.S. Government contract awards to us.

Gross profit margin increased to 65% of revenue for fiscal 2007 compared to 49% for fiscal 2006 and 40% for fiscal 2005. The increase in gross profit margin in fiscal 2007 from fiscal 2006 was due to a more profitable revenue mix consisting of a higher percentage of product sales, and increased product margins. The increased product margins in fiscal 2007 were due to price increases and deployment of lower-cost coupler designs. Increased gross profit margin in fiscal 2006 from fiscal 2005 was due to a more profitable revenue mix consisting of a higher percentage of product sales and higher product margins due primarily to lower-cost coupler designs.

Research and development expense increased 26% for fiscal 2007 compared to fiscal 2006 and 24% for fiscal 2006 compared to fiscal 2005. The increases in both years were due to efforts to develop new and improved products and a shift to company-funded research from contract-funded research. Company-funded research and development programs included new spintronic sensor and spintronic coupler products.

Selling, general, and administrative expense for fiscal 2007 increased 11% to $1,950,999 compared to $1,756,142 for fiscal 2006. The increase was primarily due to $136,370 in non-cash effects of stock-based compensation under SFAS No. 123(R), expenses related to preparation for a Sarbanes-Oxley Act Section 404 controls-based audit, and increased legal expenses. Increased legal expenses were primarily related to class-action lawsuits. Of the $136,370 effect of SFAS No. 123(R) in fiscal 2007, $126,094 was attributable to the automatic award of options to our directors on their initial election or reelection at our Annual Meeting of Shareholders in August 2006. Selling, general, and administrative expense for fiscal 2006 decreased 6% from fiscal 2005 due to a strategic shift to distributors selling our products rather than manufacturers' representatives. This shift reduced commissions we paid and expenses associated with supporting manufacturers' representatives.

Interest income net of interest expense plus other income increased 75% to $646,234 for fiscal 2007 compared to $369,753 for fiscal 2006 and 34% for fiscal 2006 compared to $276,073 for fiscal 2005. Both yearly increases were due to increases in interest-bearing marketable securities, increases in interest rates, and decreases in interest expense due to the reduction and then elimination of our debt.

Income before taxes increased 153% for fiscal 2007 compared to fiscal 2006 and 75% for fiscal 2006 compared to fiscal 2005. Both increases were primarily due to increases in product revenue and gross profit margin.

The effective income tax rate in fiscal 2007 declined to 34% of income before taxes from 37% in fiscal 2006 due to our assessment that it was more likely than not that we would realize certain tax credits. Provisions for income tax for fiscal 2007 and 2006 were due to the exhaustion of our net operating losses during fiscal 2005, although we did not pay significant cash taxes for fiscal 2007 and 2006 because of stock-based compensation deductions. The income tax benefit for fiscal 2005 was from the reduction of our valuation allowances relating to deferred tax assets for tax return purposes.

The 156% increase in net income in fiscal 2007 compared to fiscal 2006 was due to an increase in income before taxes. The 2% increase in fiscal 2006 compared to fiscal 2005 was due to an increase in income before taxes, partially offset by a provision for income tax in fiscal 2006 rather than an income tax benefit in fiscal 2005.

The increase in weighted-average diluted shares for fiscal 2007 compared to fiscal 2006 was primarily due to a higher share price at March 31, 2007 compared to March 31, 2006, which increased the dilutive effect of options. The decrease in weighted-average diluted shares for fiscal 2006 compared to fiscal 2005 was due to the expiration of a warrant issued to Cypress Semiconductor Corporation for the purchase of up to 400,000 shares of our Common Stock, partially offset by an increase in shares from stock options issued and exercised.

[kslifka]

Charts

NVEC had a dissapointing day Thursday and not much recovery on Friday.  Looks like shorts have control for now. 

Any positive news should catapult this stock.  With the fundamentals and growth I think NVEC should be $60/share.

Read the latest annual report...it's long:

156% increase in annual net income compared to 2006

http://biz.yahoo.com/e/070525/nvec10-k.html

5-May-2007

Annual Report


ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION.
You should read this discussion together with our financial statements and the notes to those financial statements included in this Report. In addition to historical information, the following discussion contains forward-looking information that involves risks and uncertainties. Our actual future results could differ materially from those presently anticipated due to a variety of factors, including those discussed in Item 1A of this Report.

General
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. We manufacture high-performance spintronic products including sensors and couplers to revolutionize data sensing and transmission. We are also a licensor of spintronic magnetoresistive random access memory technology, commonly known as MRAM.

Application of Critical Accounting Policies and Estimates In accordance with SEC guidance, those material accounting policies that we believe are the most critical to an investor's understanding of our financial results and condition and require complex management judgment are discussed below.

Research and Development Contract Percentage of Completion Estimation We recognize research and development contract revenue and gross profit as work is performed, based on actual costs incurred. We apply the percentage-of-completion method to firm-fixed-price contracts. This requires us to make estimates of the percentage of completion of firm-fixed-price contracts. If increases in projected costs-to-complete are sufficient to create a loss contract, the entire estimated loss is charged to operations in the period the loss first becomes known. This estimate has not affected our financial statements in fiscal years 2007, 2006, or 2005. Increases in projected costs to complete contracts could materially impact our future results, however.

Product Warranty Estimation
We maintain a reserve for warranty claims based on the trend in the historical ratio of claims to sales, releases of new products and other factors. The warranty period for our products is generally one year. Although we believe the likelihood to be relatively low, claims experience could be materially different from actual results because of the introduction of new products, manufacturing changes that could impact product quality, or as yet unrecognized defects in products sold. As of March 31, 2007 and 2006 our reserves for estimated warranty claims were not material to our financial statements.

Inventory Reserves Estimation
We maintain reserves for potentially excess, obsolete, and slow-moving inventory. The amounts of these reserves are based upon expected product lives, competitive conditions, industry conditions, and forecasted sales demand. Our results could be materially different if demand for our products decreased because of economic or competitive conditions, length of an industry downturn, or if products become obsolete because of technical advancements by us or in the industry. Alternatively, if we are able to sell previously reserved inventory, we reverse a portion of the reserve. Changes in inventory reserves are recorded as a component of cost of sales. As of March 31, 2007 our obsolescence reserve was $240,000 compared to $145,000 at March 31, 2006. The increase was due to additional product considered slow moving.

Allowance for Doubtful Accounts Estimation We must make estimates of the uncollectibility of our accounts receivable. The most significant risk is the risk of sudden unexpected deterioration in financial condition of a significant customer that is not considered in the allowance. We specifically analyze accounts receivable, historical bad debts, and customer credit-worthiness when evaluating the adequacy of the allowance for doubtful accounts. Our results could be materially impacted if the financial condition of a significant customer deteriorated and related accounts receivable are deemed uncollectible. Our allowance for doubtful accounts was $15,000 at March 31, 2007 and 2006. We expect our allowance for doubtful accounts to remain a relatively small percentage of our accounts receivable because much of our receivables are with large customers, distributors, and U.S. Government agencies, all of which we consider generally credit-worthy. Our allowance for doubtful accounts could increase in the future if larger portions of our sales come from small end-user customers.

Deferred Tax Assets Estimation
In determining the carrying value of our net deferred tax assets, we must assess the likelihood of sufficient future taxable income in certain tax jurisdictions, based on estimates and assumptions to realize the benefit of these assets. We evaluate the realizability of the deferred assets quarterly and assess the need for valuation allowances or reduction of existing allowances quarterly. In fiscal 2005 we reduced the amount of our valuation allowances based upon our history and our expectations for taxable income.

We began recognizing tax expenses for reporting purposes in fiscal 2006 because we had exhausted our net operating losses net of stock based compensation. Under Statement of Financial Accounting Standards (SFAS) No. 109, Accounting for Income Taxes, stock-based compensation deductions for tax return purposes do not reduce taxes reported for book purposes but are credited to "Additional paid-in capital." As of March 31, 2007, our deferred tax assets were $1,328,106 with a related valuation allowance of nil, compared to $3,432,320 with a valuation allowance of $1,855,848 as of March 31, 2006. Deferred tax assets included $527,442 of stock-based compensation deductions as of March 31, 2007 compared to $2,866,868 as of March 31, 2006. These amounts could be subject to an Internal Revenue Code Section 382 limitation.

Results of Operations

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

                                                                         Period-to-Period Change
                                   Percentage of Revenue                    Years Ended March 31
                                    Year Ended March 31                2006 to                  2005 to
                                 2007         2006        2005          2007                      2006
Revenue
Product sales                    87.6 %       68.6 %      47.5  %       72.8   %                 51.1  %
Contract research and
development                      12.4 %       31.4 %      52.5  %      (46.8  )%                (37.2 )%
Total revenue                   100.0 %      100.0 %     100.0  %       35.3   %                  4.8  %
Cost of sales                    35.2 %       51.1 %      60.4  %       (6.9  )%                (11.3 )%
Gross profit                     64.8 %       48.9 %      39.6  %       79.3   %                 29.3  %
Total expenses                   25.1 %       28.6 %      28.1  %       18.6   %                  6.7  %
Income from operations           39.8 %       20.3 %      11.5  %      164.9   %                 83.9  %
Net interest and other
income                            3.9 %        3.0 %       2.4  %       74.8   %                 33.9  %
Income before taxes              43.7 %       23.3 %      13.9  %      153.2   %                 75.4  %
Income tax provision
(benefit)                        14.7 %        8.5 %      (1.2 )%
Net income                       29.0 %       14.8 %      15.1  %      165.9   %                  2.2  %


Total revenue for fiscal 2007 increased 35% to $16,460,830 compared to $12,170,526 in fiscal 2006, and increased 5% for fiscal 2006 compared to $11,615,570 in fiscal 2005. The increases in both fiscal years were due to increases in product sales partially offset by decreases in research and development revenue.

Product sales increased 73% to $14,425,632 in fiscal 2007 from $8,345,967 in fiscal 2006. Fiscal 2006 product sales increased 51% from $5,522,250 in fiscal 2005. The increases in both years were due to increased sales of both spintronic sensors and spintronic couplers.

Contract research and development revenue decreased 47% for fiscal 2007 compared to fiscal 2006, and decreased 37% for fiscal 2006 compared to fiscal 2005. Both decreases were due to shifts to company-funded research from contract-funded research and decreases in U.S. Government contract awards to us.

Gross profit margin increased to 65% of revenue for fiscal 2007 compared to 49% for fiscal 2006 and 40% for fiscal 2005. The increase in gross profit margin in fiscal 2007 from fiscal 2006 was due to a more profitable revenue mix consisting of a higher percentage of product sales, and increased product margins. The increased product margins in fiscal 2007 were due to price increases and deployment of lower-cost coupler designs. Increased gross profit margin in fiscal 2006 from fiscal 2005 was due to a more profitable revenue mix consisting of a higher percentage of product sales and higher product margins due primarily to lower-cost coupler designs.

Research and development expense increased 26% for fiscal 2007 compared to fiscal 2006 and 24% for fiscal 2006 compared to fiscal 2005. The increases in both years were due to efforts to develop new and improved products and a shift to company-funded research from contract-funded research. Company-funded research and development programs included new spintronic sensor and spintronic coupler products.

Selling, general, and administrative expense for fiscal 2007 increased 11% to $1,950,999 compared to $1,756,142 for fiscal 2006. The increase was primarily due to $136,370 in non-cash effects of stock-based compensation under SFAS No. 123(R), expenses related to preparation for a Sarbanes-Oxley Act Section 404 controls-based audit, and increased legal expenses. Increased legal expenses were primarily related to class-action lawsuits. Of the $136,370 effect of SFAS No. 123(R) in fiscal 2007, $126,094 was attributable to the automatic award of options to our directors on their initial election or reelection at our Annual Meeting of Shareholders in August 2006. Selling, general, and administrative expense for fiscal 2006 decreased 6% from fiscal 2005 due to a strategic shift to distributors selling our products rather than manufacturers' representatives. This shift reduced commissions we paid and expenses associated with supporting manufacturers' representatives.

Interest income net of interest expense plus other income increased 75% to $646,234 for fiscal 2007 compared to $369,753 for fiscal 2006 and 34% for fiscal 2006 compared to $276,073 for fiscal 2005. Both yearly increases were due to increases in interest-bearing marketable securities, increases in interest rates, and decreases in interest expense due to the reduction and then elimination of our debt.

Income before taxes increased 153% for fiscal 2007 compared to fiscal 2006 and 75% for fiscal 2006 compared to fiscal 2005. Both increases were primarily due to increases in product revenue and gross profit margin.

The effective income tax rate in fiscal 2007 declined to 34% of income before taxes from 37% in fiscal 2006 due to our assessment that it was more likely than not that we would realize certain tax credits. Provisions for income tax for fiscal 2007 and 2006 were due to the exhaustion of our net operating losses during fiscal 2005, although we did not pay significant cash taxes for fiscal 2007 and 2006 because of stock-based compensation deductions. The income tax benefit for fiscal 2005 was from the reduction of our valuation allowances relating to deferred tax assets for tax return purposes.

The 156% increase in net income in fiscal 2007 compared to fiscal 2006 was due to an increase in income before taxes. The 2% increase in fiscal 2006 compared to fiscal 2005 was due to an increase in income before taxes, partially offset by a provision for income tax in fiscal 2006 rather than an income tax benefit in fiscal 2005.

The increase in weighted-average diluted shares for fiscal 2007 compared to fiscal 2006 was primarily due to a higher share price at March 31, 2007 compared to March 31, 2006, which increased the dilutive effect of options. The decrease in weighted-average diluted shares for fiscal 2006 compared to fiscal 2005 was due to the expiration of a warrant issued to Cypress Semiconductor Corporation for the purchase of up to 400,000 shares of our Common Stock, partially offset by an increase in shares from stock options issued and exercised.

[kslifka]

Nice earnings reported after hours.  NVEC has been beaten up along with all the other semi-conducters over the past several months.  NVEC has margins over 43% and just reported record revenues this quarter.  NO DEBT and increasing cash position. 

If your looking for a longer term hold say 3-6 months I think NVEC is compelling.  I don't own...but I've been watching this unique company.

[kslifka]

Nice earnings reported after hours.  NVEC has been beaten up along with all the other semi-conducters over the past several months.  NVEC has margins over 43% and just reported record revenues this quarter.  Only $93 million market cap....NO DEBT and increasing cash position. 

If your looking for a longer term hold say 3-6 months I think NVEC is compelling.  I don't own...but I've been watching this unique company.  As you can see from the charts...NVEC can turn on a dime.  Up 16% after hours.

NVE Corporation Reports Third Quarter Results
Wednesday January 23, 4:05 pm ET

EDEN PRAIRIE, Minn., Jan. 23, 2008 (PRIME NEWSWIRE) -- NVE Corporation (NasdaqCM:NVEC - News) announced today financial results for the quarter and nine months ended December 31, 2007.

ADVERTISEMENT
Product sales for the quarter increased 25% over the prior-year quarter to $4.25 million from $3.40 million. Total revenue, consisting of product sales and contract research and development revenue, increased 23% to $4.77 million for the third quarter of fiscal 2008 from $3.86 million in the prior-year quarter. Net income for the third quarter of fiscal 2008 increased 62% to $1.70 million, or $0.36 per diluted share, compared to $1.05 million, or $0.22 per share, for the prior-year quarter.

For the first nine months of fiscal 2008, product sales increased 25% to $12.83 million from $10.23 million for the first nine months of fiscal 2007. Total revenue increased 22% to $14.48 million for the first nine months of fiscal 2008 from $11.90 million for the prior-year period. Net income for the nine months of fiscal 2008 was $4.93 million, or $1.04 per diluted share compared to $3.23 million, or $0.67 per diluted share, for the first nine months of fiscal 2007.

``We are pleased to report our best third quarter ever,'' said NVE President and Chief Executive Officer Daniel A. Baker, Ph.D. ``Increases in product sales and operating margins drove record earnings.''

NVE is a leader in the practical commercialization of spintronics, a nanotechnology that relies on electron spin rather than electron charge to acquire, store and transmit information. The company manufactures high-performance spintronic products including sensors and couplers that are used to acquire and transmit data. NVE has also licensed its spintronic magnetoresistive random access memory technology, commonly known as MRAM.

Statements used in this press release that relate to future plans, events, financial results or performance are forward-looking statements that are subject to certain risks and uncertainties including, among others, such factors as risks in continued growth in revenue and profitability, risks associated with our reliance on several large customers, as well as the risk factors listed from time to time in our filings with the SEC, including our Annual Report on Form 10-K and other reports filed with the SEC.


                           NVE CORPORATION
                         STATEMENTS OF INCOME
QUARTERS AND NINE MONTHS ENDED DECEMBER 31, 2007 AND 2006 (Unaudited)

                                            Quarter Ended December 31
                                              2007             2006
                                           -----------     -----------
Revenue
  Product sales                            $ 4,249,809     $ 3,402,937
  Contract research and
   development                                 515,716         459,112
                                           -----------     -----------
Total revenue                               4,765,525       3,862,049
Cost of sales                               1,663,045       1,385,163
                                           -----------     -----------
Gross profit                                3,102,480       2,476,886
Expenses
  Selling, general, and
   administrative                              492,771         479,387
  Research and development                     347,344         544,779
                                           -----------     -----------
Total expenses                                840,115       1,024,166
                                           -----------     -----------
Income from operations                      2,262,365       1,452,720
Interest income                               259,865         157,337
Other income                                   62,930             --
                                           -----------     -----------
Income before taxes                         2,585,160       1,610,057
Provision for income taxes                    882,867         558,504
                                           -----------     -----------
Net income                                $ 1,702,293     $ 1,051,553
                                           ===========     ===========
Net income per share - basic              $      0.37     $      0.23
                                           ===========     ===========
Net income per share - diluted            $      0.36     $      0.22
                                           ===========     ===========
Weighted average shares outstanding
  Basic                                      4,637,275       4,620,835
  Diluted                                    4,764,430       4,786,868
Supplemental financial data
  Stock-based compensation                 $     5,598     $     8,167
  Cash paid for income taxes               $   725,000     $      --

                                            Nine Months Ended Dec. 31
                                               2007            2006
                                           -----------     -----------
Revenue
  Product sales                            $12,830,771     $10,233,325
  Contract research and
   development                               1,648,657       1,662,287
                                           -----------     -----------
Total revenue                              14,479,428      11,895,612
Cost of sales                               4,956,973       4,224,165
                                           -----------     -----------
Gross profit                                9,522,455       7,671,447
Expenses
  Selling, general,
   and administrative                        1,631,936       1,421,332
  Research and development                   1,169,018       1,641,637
                                           -----------     -----------
Total expenses                              2,800,954       3,062,969
                                           -----------     -----------
Income from operations                      6,721,501       4,608,478
Interest income                               731,243         418,683
Interest expense                                   --            (589)
Other income                                   62,930          25,246
                                           -----------     -----------
Income before taxes                         7,515,674       5,051,818
Provision for income taxes                  2,581,272       1,824,988
                                           -----------     -----------
Net income                                $ 4,934,402     $ 3,226,830
                                           ===========     ===========
Net income per share - basic              $      1.06     $      0.70
                                           ===========     ===========
Net income per share - diluted            $      1.04     $      0.67
                                           ===========     ===========
Weighted average shares
  outstanding
  Basic                                      4,634,102       4,618,086
  Diluted                                    4,761,112       4,784,118
Supplemental financial data
  Stock-based compensation                 $   164,008     $   128,203
  Cash paid for income taxes               $ 2,209,313     $    44,300


                           NVE CORPORATION
                            BALANCE SHEETS
                    DECEMBER 31 AND MARCH 31, 2007

                                          (Unaudited)
                                            Dec. 31,       March 31,
                                              2007            2007
                                         -------------   -------------
ASSETS
Current assets
   Cash and cash
    equivalents                            $ 1,251,701       $ 397,423
   Marketable securities,
    short term                               1,693,149         982,415
   Accounts receivable,
     net of allowance for
     uncollectible accounts
     of $15,000                              2,182,762       2,005,005
   Inventories                               2,493,812       2,016,858
   Deferred tax assets                         473,289       1,328,106
   Prepaid expenses and
    other assets                               839,037         333,587
                                         -------------   -------------
Total current assets                        8,933,750       7,063,394
Fixed assets
   Machinery and equipment                   5,061,407       4,458,948
   Leasehold improvements                      436,794         413,482
                                         -------------   -------------
                                             5,498,201       4,872,430
   Less accumulated
    depreciation                             4,173,394       3,834,683
                                         -------------   -------------
Net fixed assets                            1,324,807       1,037,747
Marketable securities,
  long term                                 20,109,098      16,909,353
                                         -------------   -------------
Total assets                             $ 30,367,655    $ 25,010,494
                                         =============   =============

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
   Accounts payable                       $    435,175    $    502,595
   Accrued payroll and other                   550,276         590,287
   Deferred revenue                            237,101          29,357
                                         -------------   -------------
Total current liabilities                   1,222,552       1,122,239

Shareholders' equity
   Common stock                                 46,387          46,274
   Additional paid-in capital               18,533,940      18,289,248
   Accumulated other
    comprehensive loss                          (6,641)        (84,282)
   Retained earnings                        10,571,417       5,637,015
                                         -------------   -------------
Total shareholders' equity                 29,145,103      23,888,255
                                         -------------   -------------
Total liabilities and
  shareholders' equity                    $ 30,367,655    $ 25,010,494
                                         =============   =============