NVE Corporation has developed a nanotechnology called spintronics. Based on the spin of electrons, the technology is used in sensors and couplers used in data transmission equipment, such as medical sensors, factory automation or power conversion among other applications. Based in Minnesota, the Company sells its products through a network of distributors.
In the twelve months ending March 2024, the Company recorded $29.8 million in total sales, providing $17.1 million in net income or $3.54 earnings per share. Operations generated $18.2 million in cash flow, representing a sales-to-cash conversion rate of 61.2%. Impressive cash generation is largely the result of a strong operating margin near 62.0%.
Awash with internally generated cash, it is no surprise that NVE relies very little on leverage. The Company’s debt-to-equity ratio was 0.03 at the end of March 2024. Free cash flow during the year ending March 2024, was $18.2 million, leaving adequate capital for growth investment. The Company did return $19.3 million to shareholders in the form of dividends in the year.
In the coming weeks, we expect the Company to report financial performance in the quarter ending June 2024. We believe earnings will be sequentially higher given the continued strong demand conditions that have been supporting sales and earnings growth.
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