10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549

FORM 10-Q

(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended   June 30, 2015

or

[   ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For 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 and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files).

[X] Yes  [   ] No

     Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer [   ]	Accelerated filer [X]
Non-accelerated filer [   ]  (Do not check if a smaller reporting company)	Smaller reporting company [   ]

     Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).     [   ] Yes  [X] No

     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 – 4,866,181 shares outstanding as of July 17, 2015

 

NVE CORPORATION
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 June 30, 2015 and 2014

          Statements of Comprehensive Income

          Statements of Cash Flows

          Notes to Financial Statements

     Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

     Item 3. Quantitative and Qualitative Disclosures About Market Risk

     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

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PART I–FINANCIAL INFORMATION

Item 1. Financial Statements.

NVE CORPORATION
BALANCE SHEETS
 

	(Unaudited) June 30, 2015		March 31, 2015*
ASSETS
Current assets
Cash and cash equivalents	$	12,290,435	$	9,437,262
Marketable securities, short-term		17,559,217		20,099,288
Accounts receivable, net of allowance for uncollectible accounts of $15,000		3,039,738		2,963,974
Inventories		3,170,601		3,742,492
Deferred tax assets	147,219		102,052
Prepaid expenses and other assets	846,546		574,913
Total current assets		37,053,756		36,919,981
Fixed assets
Machinery and equipment		8,629,333		8,604,926
Leasehold improvements	1,522,948		1,524,298
		10,152,281		10,129,224
Less accumulated depreciation	8,080,567		7,873,816
Net fixed assets		2,071,714		2,255,408
Marketable securities, long-term	70,432,372		70,913,807
Total assets	$	109,557,842	$	110,089,196
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	386,555	$	358,818
Accrued payroll and other		568,821	1,127,136
Income taxes payable	1,475,474			-
Total current liabilities		2,430,850		1,485,954
Long-term deferred tax liabilities		138,201		275,708
Shareholders’ equity
Common stock, $0.01 par value, 6,000,000 shares authorized; 4,866,181 issued and outstanding as of June 30, 2015 and 4,857,953 issued and outstanding as of March 31, 2015		48,662		48,580
Additional paid-in capital		20,875,163		20,850,762
Accumulated other comprehensive income		437,948		746,447
Retained earnings	85,627,018		86,681,745
Total shareholders’ equity	106,988,791		108,327,534
Total liabilities and shareholders’ equity	$	109,557,842	$	110,089,196

*The March 31, 2015 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, 2015.

See accompanying notes.


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NVE CORPORATION
STATEMENTS OF INCOME
(Unaudited)

	Quarter Ended June 30
	2015		2014
Revenue
Product sales	$	7,735,865	$	8,348,081
Contract research and development	585,054		104,954
Total revenue		8,320,919		8,453,035
Cost of sales	1,993,928		1,558,346
Gross profit		6,326,991		6,894,689
Expenses
Selling, general, and administrative		484,764		629,650
Research and development	681,001		803,428
Total expenses	1,165,765		1,433,078
Income from operations		5,161,226		5,461,611
Interest income	485,798		548,554
Income before taxes		5,647,024		6,010,165
Provision for income taxes	1,843,798		1,973,055
Net income	$	3,803,226	$	4,037,110
Net income per share – basic	$	0.78	$	0.83
Net income per share – diluted	$	0.78	$	0.83
Cash dividends declared per common share	$	1.00	$	-
Weighted average shares outstanding
Basic		4,854,841		4,851,043
Diluted		4,860,848		4,867,459

 
 
STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)

 

	Quarter Ended June 30
	2015			2014
Net income	$	3,803,226		$	4,037,110
Unrealized (loss) gain from marketable securities, net of tax	(308,499		)	94,848
Comprehensive income	$	3,494,727		$	4,131,958

 

See accompanying notes.

 
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NVE CORPORATION
STATEMENTS OF CASH FLOWS
(Unaudited)

	Quarter Ended June 30
	2015			2014
OPERATING ACTIVITIES
Net income	$	3,803,226		$	4,037,110
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		206,751			230,915
Excess tax benefits		(318,521	)		-
Deferred income taxes		311,876			56,573
Changes in operating assets and liabilities:
Accounts receivable		(75,764	)		(1,459,679	)
Inventories		571,891			(85,423	)
Prepaid expenses and other assets		(271,633	)		(149,273	)
Accounts payable and accrued expenses		944,896			1,853,045
Net cash provided by operating activities		5,172,722			4,483,268
INVESTING ACTIVITIES
Purchases of fixed assets		(23,057	)		(27,710	)
Purchases of marketable securities		136,978			(6,404,809	)
Proceeds from maturities and sales of marketable securities		2,400,000			4,000,000
Net cash provided by (used in) investing activities		2,513,921			(2,432,519	)
FINANCING ACTIVITIES
Proceeds from sale of common stock		262,749			-
Excess tax benefits		318,521			-
Repurchase of common stock		(556,787	)		-
Payment of dividends to shareholders		(4,857,953	)		-
Net cash used in financing activities		(4,833,470	)		-
Increase in cash and cash equivalents		2,853,173			2,050,749
Cash and cash equivalents at beginning of period	9,437,262			1,262,300
Cash and cash equivalents at end of period	$	12,290,435		$	3,313,049
Supplemental disclosures of cash flow information:
Cash paid during the quarter for income taxes	$	-		$	-

 
 
See accompanying notes.


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NVE CORPORATION
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. INTERIM FINANCIAL INFORMATION
     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, 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, 2015. The results of operations for the quarter ended June 30, 2015 are not necessarily indicative of the results that may be expected for the full fiscal year ending March 31, 2016.

NOTE 3. RECENTLY ISSUED ACCOUNTING STANDARDS
     In May 2014, the Financial Accounting Standards Board issued Accounting Standard Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606), which supersedes the revenue recognition requirements in Accounting Standards Codification 605, Revenue Recognition. ASU 2014-09 is based on the principle that revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. It also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. ASU 2014-09 is effective for fiscal years beginning after December 15, 2017, including interim periods within that reporting period, which will be our first quarter of fiscal 2019. We have not yet evaluated the impact of ASU 2014-09 on our financial statements.

     We have adopted all other applicable recently issued accounting pronouncements.
 
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 conversion, exercise or issuance of all potential common stock instruments (stock options and warrants). Stock options totaling 7,000 for the quarter ended June 30, 2014 were not included in the computation of diluted earnings per share because the exercise prices were greater than the market price of the common stock. The following table reflects the components of common shares outstanding:

	Quarter Ended June 30
	2015	2014
Weighted average common shares outstanding – basic	4,854,841	4,851,043
Effect of dilutive securities:
Stock options	6,007	15,814
Warrants	-	602
Shares used in computing net income per share – diluted	4,860,848	4,867,459

 
 

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NOTE 5. MARKETABLE SECURITIES
     Marketable securities 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. The fair value of our marketable securities as of June 30, 2015, by maturity, were as follows:

Total		<1 Year		1–3 Years		3–5 Years
$	87,991,589	$	17,559,217	$	47,260,141	$	23,172,231

 
     As of June 30 and March 31, 2015, our marketable securities were as follows:
 

	As of June 30, 2015									As of March 31, 2015
	Adjusted Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Market Value		Adjusted Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Market Value
Corporate bonds	$	85,929,786	$	724,435	$	(36,779	)	$	86,617,442	$	88,456,886	$	1,185,469	$	(16,371	)	$	89,625,984
Municipal bonds	1,373,962		185		-			1,374,147		1,383,839		3,272		-			1,387,111
Total	$	87,303,748	$	724,620	$	(36,779	)	$	87,991,589	$	89,840,725	$	1,188,741	$	(16,371	)	$	91,013,095

 
     The following table shows the gross unrealized losses and fair value of our investments with unrealized losses, aggregated by investment category and length of time that individual securities had been in a continuous unrealized loss position as of June 30 and March 31, 2015:
 

		Less Than 12 Months					12 Months or Greater					Total
		Fair Market Value		Gross Unrealized Losses			Fair Market Value		Gross Unrealized Losses			Fair Market Value		Gross Unrealized Losses
As of June 30, 2015
	Corporate bonds	$	12,352,085	$	(26,489	)	$	2,595,544	$	(10,290	)	$	14,947,629	$	(36,779	)
	Municipal bonds	-		-			-		-			-		-
	Total	$	12,352,085	$	(26,489	)	$	2,595,544	$	(10,290	)	$	14,947,629	$	(36,779	)
As of March 31, 2015
	Corporate bonds	$	3,015,900	$	(163	)	$	2,590,240	$	(16,208	)	$	5,606,140	$	(16,371	)
	Municipal bonds	-		-			-		-			-		-
	Total	$	3,015,900	$	(163	)	$	2,590,240	$	(16,208	)	$	5,606,140	$	(16,371	)

 
     Gross unrealized losses totaled $36,779 as of June 30, 2015, and were attributed to six corporate bonds out of a portfolio of 30 bonds. The gross unrealized losses were due to market-price decreases after the bonds were purchased.

     All of the bonds we held had investment-grade credit ratings by Moody’s or Standard and Poor’s. For each bond with an unrealized loss, we expect to recover the entire cost basis of each security based on our consideration of factors including their credit ratings, the underlying ratings of insured bonds, and historical default rates for securities of comparable credit rating.

     One corporate bond, with a fair market value of $2,595,544, had been in continuous unrealized loss positions for 12 months or greater. For this security, we also considered the severity of unrealized loss, which was less than 1% of adjusted cost.

     Because we expect to recover the cost basis of investments held, we do not consider any of our marketable securities to be other-than-temporarily impaired at June 30, 2015.
 

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NOTE 6. INVENTORIES
     Inventories consisted of the following:
 

	June 30, 2015		March 31, 2015
Raw materials	$	776,051	$	738,169
Work in process		1,680,708		2,302,751
Finished goods	713,842		701,572
Total inventories	$	3,170,601	$	3,742,492

NOTE 7. STOCK-BASED COMPENSATION
      There were no stock-based compensation expenses for the first quarters of fiscal 2016 or 2015.
 
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 June 30, 2015, 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, 2015 we had no accrued interest related to uncertain tax positions. The tax years 1999 through 2014 remain open to examination by the major taxing jurisdictions to which we are subject.

NOTE 9. FAIR VALUE MEASUREMENTS
     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:

     Level 1 – Financial instruments with quoted prices in active markets for identical assets or liabilities. Our Level 1 financial instruments consist of publicly-traded marketable corporate debt securities, which are classified as available-for-sale. On the balance sheets, these securities are included in “Marketable securities, short term” and “Marketable securities, long term.” The fair value of our Level 1 marketable securities was $86,617,442 at June 30, 2015 and $89,625,984 at March 31, 2015.

     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. Our Level 2 financial instruments consist of municipal debt securities, which are classified as available-for-sale. On the balance sheets, these securities are included in “Marketable securities, short term” and “Marketable securities, long term.” The fair value of our Level 2 marketable securities was $1,374,147 at June 30, 2015 and $1,387,111 at March 31, 2015.

     Level 3 – Inputs to the fair value measurement are unobservable inputs or valuation techniques. We do not have any financial assets or liabilities being measured at fair value that are classified as Level 3 financial instruments.

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NOTE 10. STOCK REPURCHASE PLAN
     On January 21, 2009 we announced that our Board of Directors authorized the repurchase of up to $2,500,000 of our Common Stock, $1,236,595 of which remained available as of June 30, 2015. The repurchase program may be modified or discontinued at any time without notice. We did not repurchase any of our Common Stock under the program during the quarter ended June 30, 2015.

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 our reliance on several large customers for a significant percentage of revenue, uncertainties related to possible renewal of agreements with large customers, uncertainties related to the economic environments in the industries we serve, uncertainties related to future contract research and development revenue, 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, 2015.

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. We have also licensed our spintronic magnetoresistive random access memory technology, commonly known as MRAM.

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, 2015. At June 30, 2015 our critical accounting policies and estimates continued to include investment valuation, inventory valuation, and deferred tax assets estimation.

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Quarter ended June 30, 2015 compared to quarter ended June 30, 2014
     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- to-Quarter Change
	2015		2014
Revenue
Product sales	93.0	%	98.8	%	(7.3	)%
Contract research and development	7.0	%	1.2	%	457.4	%
Total revenue	100.0	%	100.0	%	(1.6	)%
Cost of sales	24.0	%	18.4	%	28.0	%
Gross profit	76.0	%	81.6	%	(8.2	)%
Expenses
Selling, general, and administrative	5.8	%	7.5	%	(23.0	)%
Research and development	8.2	%	9.5	%	(15.2	)%
Total expenses	14.0	%	17.0	%	(18.7	)%
Income from operations	62.0	%	64.6	%	(5.5	)%
Interest and other income	5.9	%	6.5	%	(11.4	)%
Income before taxes	67.9	%	71.1	%	(6.0	)%
Provision for income taxes	22.2	%	23.3	%	(6.6	)%
Net income	45.7	%	47.8	%	(5.8	)%

 
     Total revenue for the quarter ended June 30, 2015 (the first quarter of fiscal 2016) decreased 2% compared to the quarter ended June 30, 2014 (the first quarter of fiscal 2015). The decrease was due to a 7% decrease in product sales, partially offset by a 457% increase in contract research and development revenue.

     The decrease in product sales from the prior-year quarter was due to decreased purchase volume by existing customers. Based on customer forecasts and a more aggressive pricing strategy in certain markets, we currently expect product sales for future quarters, including the remaining quarters in fiscal 2016, to be significantly less than product sales for the first quarter of fiscal 2016.

     The increase in contract research and development revenue for the first quarter of fiscal 2016 was due to new contracts.

     Gross profit margin decreased to 76% of revenue for the first quarter of fiscal 2016 compared to 82% for the first quarter of fiscal 2015, due primarily to a less profitable revenue mix caused by a large increase in contract research and development revenue.

     Total expenses decreased 19% for the first quarter of fiscal 2016 compared to the first quarter of fiscal 2015, due to a 23% decrease in selling, general, and administrative expense and a 15% decrease in research and development expense. The decrease in selling, general, and administrative expense was primarily due to decreased performance-based compensation. The decrease in research and development expense was due to an increase in contract research and development activities, which caused us to reallocate resources to expensed research and development activities. Research and development expense can fluctuate significantly depending on staffing, project requirements, and contract research and development activities.

     Interest income for the first quarter of fiscal 2016 decreased 11% due to a decrease in interest-bearing marketable securities. The decrease in marketable securities was because we used proceeds from maturating securities to help fund cash dividends, rather than reinvesting proceeds as we had generally done in the past.

     The provision for income taxes was $1,843,798 for the first quarter of fiscal 2016 compared to $1,973,055 for the first quarter of fiscal 2015. The effective tax rate was 33% of income before taxes for the first quarters of fiscal 2016 and 2015.

     The 6% decrease in net income in the first quarter of fiscal 2016 compared to the prior-year quarter was primarily due to decreased product sales and decreased interest income, partially offset by decreased expenses.

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Liquidity and capital resources

Overview
     Cash and cash equivalents were $12,290,435 at June 30, 2015 compared to $9,437,262 at March 31, 2015. The $2,853,173 increase in cash and cash equivalents during the quarter was due to $5,172,722 in net cash provided by operating activities and $2,513,921 net cash provided by investing activities, less $4,833,470 net 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.

Operating Activities
     Inventories decreased $571,891, primarily due to a reduction in work in process related to contract research and development revenue recognition timing.

     Income taxes payable increased $1,475,474 in the first quarter of fiscal 2016 because we had no estimated income tax payments due in the quarter.

Investing Activities
     Net cash provided by investing activities in the first quarter of fiscal 2016 was primarily due to marketable security maturities of $2,400,000.

     Purchases of fixed assets were $23,057 in the first quarter of fiscal 2016 compared to $27,710 in the first quarter of fiscal 2015. Our capital expenditures can vary significantly from from quarter to quarter depending on our needs, equipment purchasing opportunities, and production expansion activities.

     Free cash flow, which is net cash provided by operating activities less purchases of fixed assets, was $5,149,665 for the first quarter of fiscal 2016.

Financing Activities
     Net cash used in financing activities in the first quarter of fiscal 2016 was primarily a $4,857,953 cash dividend to shareholders.

     In addition to the $4,857,953 dividend paid in the first quarter of fiscal 2016, on July 22, 2015 we announced that our Board had declared a cash quarterly dividend of an additional $1.00 per share of common stock, or $4,866,181 based on shares outstanding as of July 17, 2015 to be paid August 31, 2015. We plan to fund such dividends through cash provided by operating activities and proceeds from maturities of marketable securities. All future dividends will be subject to Board approval and subject to the company’s results of operations, cash and marketable security balances, estimates of future cash requirements, and other factors the Board may deem relevant. Furthermore, dividends may be modified or discontinued at any time without notice.

     A program announced January 21, 2009 authorized the repurchase of up to $2,500,000 of our Common Stock, $1,236,595 of which remained available as of June 30, 2015. The repurchase program may be modified or discontinued at any time without notice. We did not repurchase any stock under the program in the first quarter of fiscal 2016.
 
 

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Item 3. Quantitative and Qualitative Disclosures About Market Risk.
     As discussed in our Annual Report on Form 10-K for the fiscal year ended March 31, 2015, we are exposed to financial market risks, primarily marketable securities and, to a lesser extent, changes in currency exchange rates.
 
Marketable Securities
     The primary objective of our investment activities is to preserve principal while at the same time maximizing after-tax yields without significantly increasing risk. To achieve this objective, we maintain our portfolio of cash equivalents and marketable securities in securities including municipal obligations, corporate obligations, and money market funds. Short-term and long-term marketable securities are generally classified as available-for-sale and consequently are recorded on the balance sheet at fair value with unrealized gains or losses reported as a separate component of accumulated other comprehensive income or loss, net of estimated tax. Our marketable securities as of June 30, 2015 had remaining maturities between five and 211 weeks. Marketable securities had a market value of $87,991,589 at June 30, 2015, representing approximately 80% of our total assets. We have not used derivative financial instruments in our investment portfolio.


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 of June 30, 2015, our disclosure controls and procedures were effective.

Changes in Internal Controls
     During the quarter ended June 30, 2015, 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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PART II–OTHER INFORMATION

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, 2015.


Item 4. Mine Safety Disclosures.
     Not applicable.

 

13

Table of Contents
 
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

14

Table of Contents
 

SIGNATURES

     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)
July 22, 2015	/s/ DANIEL A. BAKER
Date	Daniel A. Baker
	President and Chief Executive Officer
July 22, 2015	/s/ CURT A. REYNDERS
Date	Curt A. Reynders
	Chief Financial Officer

 
 

15

EX-31

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: July 22, 2015

 

/s/ DANIEL A. BAKER

Daniel A. Baker

President and Chief Executive Officer

EX-31

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: July 22, 2015

 

/s/ CURT A. REYNDERS

Curt A. Reynders

Chief Financial Officer

EX-32

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 June 30, 2015, 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: July 22, 2015

/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.

XML

Note 5 - Unrealized Losses and Fair Value of Investments (Details) - USD ($)	3 Months Ended	12 Months Ended
	Jun. 30, 2015	Mar. 31, 2015
Corporate Bond Securities [Member]
Corporate bonds, fair market value less than 12 months	$ 12,352,085	$ 3,015,900
Corporate bonds, gross unrealized losses less than 12 months	(26,489)	(163)
Available-for-sale Securities, Continuous Unrealized Loss Position, Twelve Months or Longer, Fair Value	2,595,544	2,590,240
Corporate bonds, gross unrealized losses greater than 12 months	(10,290)	(16,208)
Corporate bonds, total fair market value	14,947,629	5,606,140
Corporate bonds, total gross unrealized losses	(36,779)	(16,371)
Municipal bonds, gross unrealized losses less than 12 months	26,489	163
Municipal bonds, gross unrealized losses greater than 12 months	10,290	16,208
Available-for-sale Securities, Continuous Unrealized Loss Position, Aggregate Loss	$ 36,779	$ 16,371
Municipal Bonds [Member]
Corporate bonds, fair market value less than 12 months
Corporate bonds, gross unrealized losses less than 12 months
Available-for-sale Securities, Continuous Unrealized Loss Position, Twelve Months or Longer, Fair Value
Corporate bonds, gross unrealized losses greater than 12 months
Corporate bonds, total fair market value
Corporate bonds, total gross unrealized losses
Municipal bonds, gross unrealized losses less than 12 months
Municipal bonds, gross unrealized losses greater than 12 months
Available-for-sale Securities, Continuous Unrealized Loss Position, Aggregate Loss
Corporate bonds, fair market value less than 12 months	$ 12,352,085	$ 3,015,900
Corporate bonds, gross unrealized losses less than 12 months	(26,489)	(163)
Available-for-sale Securities, Continuous Unrealized Loss Position, Twelve Months or Longer, Fair Value	2,595,544	2,590,240
Corporate bonds, gross unrealized losses greater than 12 months	(10,290)	(16,208)
Corporate bonds, total fair market value	14,947,629	5,606,140
Corporate bonds, total gross unrealized losses	(36,779)	(16,371)
Municipal bonds, gross unrealized losses less than 12 months	26,489	163
Municipal bonds, gross unrealized losses greater than 12 months	10,290	16,208
Available-for-sale Securities, Continuous Unrealized Loss Position, Aggregate Loss	$ 36,779	$ 16,371

XML

Note 3 - Recent Accounting Pronouncements

3 Months Ended

Jun. 30, 2015

Notes to Financial Statements

New Accounting Pronouncements and Changes in Accounting Principles [Text Block]

NOTE 3. RECENTLY ISSUED ACCOUNTING STANDARDS

     In May 2014, the Financial Accounting Standards Board issued Accounting Standard Update (“ASU”) No. 2014-09,

Revenue from Contracts with Customers (Topic 606)

, which supersedes the revenue recognition requirements in Accounting Standards Codification 605,

Revenue Recognition

. ASU 2014-09 is based on the principle that revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. It also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. ASU 2014-09 is effective for fiscal years beginning after December 15, 2017, including interim periods within that reporting period, which will be our first quarter of fiscal 2019. We have not yet evaluated the impact of ASU 2014-09 on our financial statements.

     We have adopted all other applicable recently issued accounting pronouncements.

XML

Note 9 - Fair Value Measurements (Details Textual) - USD ($)	Jun. 30, 2015	Mar. 31, 2015
Fair Value, Inputs, Level 1 [Member]
Available-for-sale Securities	$ 86,617,442	$ 89,625,984
Fair Value, Inputs, Level 2 [Member]
Available-for-sale Securities	1,374,147	1,387,111
Available-for-sale Securities	$ 87,991,589	$ 91,013,095

XML

Note 8 - Income Taxes (Details Textual) - Jun. 30, 2015 - USD ($)	Total
Earliest Tax Year [Member]
Open Tax Year	1999
Latest Tax Year [Member]
Open Tax Year	2014
Unrecognized Tax Benefits	$ 0
Unrecognized Tax Benefits, Interest on Income Taxes Accrued	$ 0

XML

Note 10 - Stock Repurchase Plan (Details Textual) - USD ($)	3 Months Ended
	Jun. 30, 2015	Jan. 21, 2009
Treasury Stock, Shares, Acquired	0
Stock Repurchase Program, Authorized Amount		$ 2,500,000
Stock Repurchase Program, Remaining Authorized Repurchase Amount	$ 1,236,595

XML

Note 2 - Interim Financial Information

3 Months Ended

Jun. 30, 2015

Notes to Financial Statements

Quarterly Financial Information [Text Block]

NOTE 2. INTERIM FINANCIAL INFORMATION

     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, 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, 2015. The results of operations for the quarter ended June 30, 2015 are not necessarily indicative of the results that may be expected for the full fiscal year ending March 31, 2016.

XML

Balance Sheets (Current Period Unaudited) - USD ($)	Jun. 30, 2015	Mar. 31, 2015
Current assets
Cash and cash equivalents	$ 12,290,435	$ 9,437,262	[1]
Marketable securities, short-term	17,559,217	20,099,288	[1]
Accounts receivable, net of allowance for uncollectible accounts of $15,000	3,039,738	2,963,974	[1]
Inventories	3,170,601	3,742,492	[1]
Deferred tax assets	147,219	102,052	[1]
Prepaid expenses and other assets	846,546	574,913	[1]
Total current assets	37,053,756	36,919,981	[1]
Fixed assets
Machinery and equipment	8,629,333	8,604,926	[1]
Leasehold improvements	1,522,948	1,524,298	[1]
Property, Plant, and Equipment	10,152,281	10,129,224	[1]
Less accumulated depreciation	8,080,567	7,873,816	[1]
Net fixed assets	2,071,714	2,255,408	[1]
Marketable securities, long-term	70,432,372	70,913,807	[1]
Total assets	109,557,842	110,089,196	[1]
Current liabilities
Accounts payable	386,555	358,818	[1]
Accrued payroll and other	568,821	$ 1,127,136	[1]
Income taxes payable	1,475,474
Total current liabilities	2,430,850	$ 1,485,954	[1]
Long-term deferred tax liabilities	138,201	275,708	[1]
Common stock, $0.01 par value, 6,000,000 shares authorized; 4,866,181 issued and outstanding as of June 30, 2015 and 4,857,953 issued and outstanding as of March 31, 2015	48,662	48,580	[1]
Additional paid-in capital	20,875,163	20,850,762	[1]
Accumulated other comprehensive income	437,948	746,447	[1]
Retained earnings	85,627,018	86,681,745	[1]
Total shareholders’ equity	106,988,791	108,327,534	[1]
Total liabilities and shareholders’ equity	$ 109,557,842	$ 110,089,196	[1]

[1] The March 31, 2015 Balance Sheet is derived from the audited financial statements contained in our Annual Report on Form 10-K for the fiscal year ended March 31,2015.

XML

Statements of Cash Flows (Unaudited) - USD ($)	3 Months Ended
	Jun. 30, 2015		Jun. 30, 2014
OPERATING ACTIVITIES
Net income	$ 3,803,226		$ 4,037,110
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	206,751		$ 230,915
Excess tax benefits	(318,521)
Deferred income taxes	311,876		$ 56,573
Changes in operating assets and liabilities:
Accounts receivable	(75,764)		(1,459,679)
Inventories	571,891		(85,423)
Prepaid expenses and other assets	(271,633)		(149,273)
Accounts payable and accrued expenses	944,896		1,853,045
Net cash provided by operating activities	5,172,722		4,483,268
INVESTING ACTIVITIES
Purchases of fixed assets	(23,057)		(27,710)
Purchases of marketable securities	136,978		(6,404,809)
Proceeds from maturities and sales of marketable securities	2,400,000		4,000,000
Net cash provided by (used in) investing activities	2,513,921		$ (2,432,519)
Proceeds from sale of common stock	262,749
Excess tax benefits	318,521
Repurchase of common stock	(556,787)
Payment of dividends to shareholders	(4,857,953)
Net cash used in financing activities	(4,833,470)
Increase in cash and cash equivalents	2,853,173		$ 2,050,749
Cash and cash equivalents at beginning of period	9,437,262	[1]	1,262,300
Cash and cash equivalents at end of period	$ 12,290,435		$ 3,313,049
Cash paid during the quarter for income taxes

[1] The March 31, 2015 Balance Sheet is derived from the audited financial statements contained in our Annual Report on Form 10-K for the fiscal year ended March 31,2015.

XML

Note 5 - Marketable Securities (Details Textual)	3 Months Ended	12 Months Ended
	Jun. 30, 2015 USD ($)	Mar. 31, 2015 USD ($)
Corporate Bond Securities [Member]
Available-for-sale Securities, Continuous Unrealized Loss Position, Aggregate Loss	$ 36,779	$ 16,371
Available-for-sale Securities, Continuous Unrealized Loss Position, Twelve Months or Longer, Fair Value	$ 2,595,544	2,590,240
Number of Corporate Bonds Resulted in Loss	6
Number of Corporate Bonds	30
Available-for-sale Securities, Continuous Unrealized Loss Position, Aggregate Loss	$ 36,779	16,371
Available-for-sale Securities, Continuous Unrealized Loss Position, Twelve Months or Longer, Fair Value	$ 2,595,544	$ 2,590,240
Severity of Unrealized Loss, Percentage of Adjusted Cost	1.00%

XML

Note 5 - Reconciliation of Marketable Securities (Details) - USD ($)	Jun. 30, 2015	Mar. 31, 2015
Corporate Bond Securities [Member]
Adjusted Cost	$ 85,929,786	$ 88,456,886
Gross Unrealized Gains	724,435	1,185,469
Gross Unrealized Losses	(36,779)	(16,371)
Available-for-sale Securities	86,617,442	89,625,984
Municipal Bonds [Member]
Adjusted Cost	1,373,962	1,383,839
Gross Unrealized Gains	$ 185	$ 3,272
Gross Unrealized Losses
Available-for-sale Securities	$ 1,374,147	$ 1,387,111
Adjusted Cost	87,303,748	89,840,725
Gross Unrealized Gains	724,620	1,188,741
Gross Unrealized Losses	(36,779)	(16,371)
Available-for-sale Securities	$ 87,991,589	$ 91,013,095

XML

Note 1 - Description of Business

3 Months Ended

Jun. 30, 2015

Notes to Financial Statements

Business Description and Basis of Presentation [Text Block]

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.

XML

Balance Sheets (Current Period Unaudited) (Parentheticals) - USD ($)	Jun. 30, 2015	Mar. 31, 2015
Allowance for uncollectible accounts	$ 15,000	$ 15,000
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	6,000,000	6,000,000
Common stock, shares issued (in shares)	4,866,181	4,857,953
Common stock, shares outstanding (in shares)	4,866,181	4,857,953

XML

Note 4 - Net Income Per Share (Tables)

3 Months Ended

Jun. 30, 2015

Notes Tables

Schedule of Weighted Average Number of Shares [Table Text Block]

	Quarter Ended June 30
	2015		2014
Weighted average common shares outstanding – basic		4,854,841		4,851,043
Effect of dilutive securities:
Stock options		6,007		15,814
Warrants		-		602
Shares used in computing net income per share – diluted		4,860,848		4,867,459

XML

Document And Entity Information - shares	3 Months Ended
	Jun. 30, 2015	Jul. 17, 2015
Entity Registrant Name	NVE CORP /NEW/
Entity Central Index Key	0000724910
Current Fiscal Year End Date	--03-31
Entity Filer Category	Accelerated Filer
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Entity Common Stock, Shares Outstanding (in shares)		4,866,181
Document Type	10-Q
Document Period End Date	Jun. 30, 2015
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q1
Amendment Flag	false

XML

Note 5 - Marketable Securities (Tables)

3 Months Ended

Jun. 30, 2015

Notes Tables

Marketable Securities [Table Text Block]

Total		<1 Year		1–3 Years		3–5 Years
$	87,991,589	$	17,559,217	$	47,260,141	$	23,172,231

Schedule of Available-for-sale Securities Reconciliation [Table Text Block]

	As of June 30, 2015									As of March 31, 2015
	Adjusted Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Market Value		Adjusted Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Market Value
Corporate bonds	$	85,929,786	$	724,435	$	(36,779	)	$	86,617,442	$	88,456,886	$	1,185,469	$	(16,371	)	$	89,625,984
Municipal bonds		1,373,962		185		-			1,374,147		1,383,839		3,272		-			1,387,111
Total	$	87,303,748	$	724,620	$	(36,779	)	$	87,991,589	$	89,840,725	$	1,188,741	$	(16,371	)	$	91,013,095

Schedule of Unrealized Loss on Investments [Table Text Block]

		Less Than 12 Months					12 Months or Greater					Total
		Fair Market Value		Gross Unrealized Losses			Fair Market Value		Gross Unrealized Losses			Fair Market Value		Gross Unrealized Losses
As of June 30, 2015
	Corporate bonds	$	12,352,085	$	(26,489	)	$	2,595,544	$	(10,290	)	$	14,947,629	$	(36,779	)
	Municipal bonds		-		-			-		-			-		-
	Total	$	12,352,085	$	(26,489	)	$	2,595,544	$	(10,290	)	$	14,947,629	$	(36,779	)
As of March 31, 2015
	Corporate bonds	$	3,015,900	$	(163	)	$	2,590,240	$	(16,208	)	$	5,606,140	$	(16,371	)
	Municipal bonds		-		-			-		-			-		-
	Total	$	3,015,900	$	(163	)	$	2,590,240	$	(16,208	)	$	5,606,140	$	(16,371	)

XML

Statements of Income (Unaudited) - USD ($)	3 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Revenue
Product sales	$ 7,735,865	$ 8,348,081
Contract research and development	585,054	104,954
Total revenue	8,320,919	8,453,035
Cost of sales	1,993,928	1,558,346
Gross profit	6,326,991	6,894,689
Selling, general, and administrative	484,764	629,650
Research and development	681,001	803,428
Total expenses	1,165,765	1,433,078
Income from operations	5,161,226	5,461,611
Interest income	485,798	548,554
Income before taxes	5,647,024	6,010,165
Provision for income taxes	1,843,798	1,973,055
Net income	$ 3,803,226	$ 4,037,110
Net income per share – basic (in dollars per share)	$ 0.78	$ 0.83
Net income per share – diluted (in dollars per share)	0.78	$ 0.83
Cash dividends declared per common share (in dollars per share)	$ 1
Basic (in shares)	4,854,841	4,851,043
Diluted (in shares)	4,860,848	4,867,459

XML

Note 6 - Inventories

3 Months Ended

Jun. 30, 2015

Notes to Financial Statements

Inventory Disclosure [Text Block]

NOTE 6. INVENTORIES

     Inventories consisted of the following:
 

	June 30, 2015		March 31, 2015
Raw materials	$	776,051	$	738,169
Work in process		1,680,708		2,302,751
Finished goods		713,842		701,572
Total inventories	$	3,170,601	$	3,742,492

XML

Note 5 - Marketable Securities

3 Months Ended

Jun. 30, 2015

Notes to Financial Statements

Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block]

NOTE 5. MARKETABLE SECURITIES

     Marketable securities 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. The fair value of our marketable securities as of June 30, 2015, by maturity, were as follows:

Total		<1 Year		1–3 Years		3–5 Years
$	87,991,589	$	17,559,217	$	47,260,141	$	23,172,231

 
     As of June 30 and March 31, 2015, our marketable securities were as follows:
 

	As of June 30, 2015									As of March 31, 2015
	Adjusted Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Market Value		Adjusted Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Market Value
Corporate bonds	$	85,929,786	$	724,435	$	(36,779	)	$	86,617,442	$	88,456,886	$	1,185,469	$	(16,371	)	$	89,625,984
Municipal bonds		1,373,962		185		-			1,374,147		1,383,839		3,272		-			1,387,111
Total	$	87,303,748	$	724,620	$	(36,779	)	$	87,991,589	$	89,840,725	$	1,188,741	$	(16,371	)	$	91,013,095

 
     The following table shows the gross unrealized losses and fair value of our investments with unrealized losses, aggregated by investment category and length of time that individual securities had been in a continuous unrealized loss position as of June 30 and March 31, 2015:
 

		Less Than 12 Months					12 Months or Greater					Total
		Fair Market Value		Gross Unrealized Losses			Fair Market Value		Gross Unrealized Losses			Fair Market Value		Gross Unrealized Losses
As of June 30, 2015
	Corporate bonds	$	12,352,085	$	(26,489	)	$	2,595,544	$	(10,290	)	$	14,947,629	$	(36,779	)
	Municipal bonds		-		-			-		-			-		-
	Total	$	12,352,085	$	(26,489	)	$	2,595,544	$	(10,290	)	$	14,947,629	$	(36,779	)
As of March 31, 2015
	Corporate bonds	$	3,015,900	$	(163	)	$	2,590,240	$	(16,208	)	$	5,606,140	$	(16,371	)
	Municipal bonds		-		-			-		-			-		-
	Total	$	3,015,900	$	(163	)	$	2,590,240	$	(16,208	)	$	5,606,140	$	(16,371	)

 
     Gross unrealized losses totaled $36,779 as of June 30, 2015, and were attributed to six corporate bonds out of a portfolio of 30 bonds. The gross unrealized losses were due to market-price decreases after the bonds were purchased.

     All of the bonds we held had investment-grade credit ratings by Moody’s or Standard and Poor’s. For each bond with an unrealized loss, we expect to recover the entire cost basis of each security based on our consideration of factors including their credit ratings, the underlying ratings of insured bonds, and historical default rates for securities of comparable credit rating.

     One corporate bond, with a fair market value of $2,595,544, had been in continuous unrealized loss positions for 12 months or greater. For this security, we also considered the severity of unrealized loss, which was less than 1% of adjusted cost.

     Because we expect to recover the cost basis of investments held, we do not consider any of our marketable securities to be other-than-temporarily impaired at June 30, 2015.
 

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Note 5 - Fair Value of Marketable Securities (Details) - USD ($)	Jun. 30, 2015
Fair Market Value	$ 87,991,589
Marketable securities, debt maturities due within one year, fair value	17,559,217
Marketable securities, debt maturities due after one year through three years, fair value	47,260,141
Marketable securities, debt maturities due after three years through five years, fair value	$ 23,172,231

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Note 6 - Inventories (Tables)

3 Months Ended

Jun. 30, 2015

Notes Tables

Schedule of Inventory, Current [Table Text Block]

	June 30, 2015		March 31, 2015
Raw materials	$	776,051	$	738,169
Work in process		1,680,708		2,302,751
Finished goods		713,842		701,572
Total inventories	$	3,170,601	$	3,742,492

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Note 9 - Fair Value Measurements

3 Months Ended

Jun. 30, 2015

Notes to Financial Statements

Fair Value Disclosures [Text Block]

NOTE 9. FAIR VALUE MEASUREMENTS

     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:

     Level 1 – Financial instruments with quoted prices in active markets for identical assets or liabilities. Our Level 1 financial instruments consist of publicly-traded marketable corporate debt securities, which are classified as available-for-sale. On the balance sheets, these securities are included in “Marketable securities, short term” and “Marketable securities, long term.” The fair value of our Level 1 marketable securities was $86,617,442 at June 30, 2015 and $89,625,984 at March 31, 2015.

     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. Our Level 2 financial instruments consist of municipal debt securities, which are classified as available-for-sale. On the balance sheets, these securities are included in “Marketable securities, short term” and “Marketable securities, long term.” The fair value of our Level 2 marketable securities was $1,374,147 at June 30, 2015 and $1,387,111 at March 31, 2015.

     Level 3 – Inputs to the fair value measurement are unobservable inputs or valuation techniques. We do not have any financial assets or liabilities being measured at fair value that are classified as Level 3 financial instruments.

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Note 7 - Stock-based Compensation

3 Months Ended

Jun. 30, 2015

Notes to Financial Statements

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

NOTE 7. STOCK-BASED COMPENSATION

      There were no stock-based compensation expenses for the first quarters of fiscal 2016 or 2015.

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Note 8 - Income Taxes

3 Months Ended

Jun. 30, 2015

Notes to Financial Statements

Income Tax Disclosure [Text Block]

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 June 30, 2015, 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, 2015 we had no accrued interest related to uncertain tax positions. The tax years 1999 through 2014 remain open to examination by the major taxing jurisdictions to which we are subject.

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Note 10 - Stock Repurchase Plan

3 Months Ended

Jun. 30, 2015

Notes to Financial Statements

Stock Repurchase Plan Disclosure [Text Block]

NOTE 10. STOCK REPURCHASE PLAN

     On January 21, 2009 we announced that our Board of Directors authorized the repurchase of up to $2,500,000 of our Common Stock, $1,236,595 of which remained available as of June 30, 2015. The repurchase program may be modified or discontinued at any time without notice. We did not repurchase any of our Common Stock under the program during the quarter ended June 30, 2015.

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Note 4 - Components of Common Shares Outstanding (Details) - shares	3 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Basic (in shares)	4,854,841	4,851,043
Stock options (in shares)	6,007	15,814
Warrants (in shares)		602
Shares used in computing net income per share – diluted (in shares)	4,860,848	4,867,459

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Note 6 - Inventory (Details) - USD ($)	Jun. 30, 2015	Mar. 31, 2015
Raw materials	$ 776,051	$ 738,169
Work in process	1,680,708	2,302,751
Finished goods	713,842	701,572
Total inventories	$ 3,170,601	$ 3,742,492	[1]

[1] The March 31, 2015 Balance Sheet is derived from the audited financial statements contained in our Annual Report on Form 10-K for the fiscal year ended March 31,2015.

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Statements of Comprehensive Income (Unaudited) - USD ($)	3 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Net income	$ 3,803,226	$ 4,037,110
Unrealized (loss) gain from marketable securities, net of tax	(308,499)	94,848
Comprehensive income	$ 3,494,727	$ 4,131,958

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Note 4 - Net Income Per Share

3 Months Ended

Jun. 30, 2015

Notes to Financial Statements

Earnings Per Share [Text Block]

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 conversion, exercise or issuance of all potential common stock instruments (stock options and warrants). Stock options totaling 7,000 for the quarter ended June 30, 2014 were not included in the computation of diluted earnings per share because the exercise prices were greater than the market price of the common stock. The following table reflects the components of common shares outstanding:

	Quarter Ended June 30
	2015		2014
Weighted average common shares outstanding – basic		4,854,841		4,851,043
Effect of dilutive securities:
Stock options		6,007		15,814
Warrants		-		602
Shares used in computing net income per share – diluted		4,860,848		4,867,459

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Note 7 - Stock-based Compensation (Details Textual) - USD ($)	3 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Adjustments to Additional Paid in Capital, Share-based Compensation, Requisite Service Period Recognition	$ 0	$ 0

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Note 4 - Net Income Per Share (Details Textual)	3 Months Ended
	Jun. 30, 2014 shares
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	7,000