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What changed in NVE CORP /NEW/'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of NVE CORP /NEW/'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+92 added−94 removedSource: 10-K (2023-05-03) vs 10-K (2022-05-04)

Top changes in NVE CORP /NEW/'s 2023 10-K

92 paragraphs added · 94 removed · 73 edited across 5 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeFoundry wafers contain conventional electronics that perform housekeeping functions such as voltage regulation and signal conditioning in our products. 4 Table of Contents Each wafer may include thousands of devices. We build spintronics structures on wafers in our fabrication facility. We either saw wafers to be sold in die form, or send wafers to Asia for dicing and packaging.
Biggest changeMost of our products are fabricated in our facility using either raw silicon wafers or foundry wafers. Foundry wafers contain conventional electronics that perform housekeeping functions such as voltage regulation and signal conditioning in our products. Each wafer may include thousands of devices. We build spintronics structures on wafers in our fabrication facility.
Such clearances are subject Government audits and investigations, and any deficiencies or illegal activities identified during the audits or investigations could result in the forfeiture or suspension of payments and civil or criminal penalties. Environmental Matters We are subject to environmental laws and regulations particularly state and local laws and regulations relating to industrial waste and emissions.
Such clearances are subject to Government audits and investigations, and any deficiencies or illegal activities identified during the audits or investigations could result in the forfeiture or suspension of payments and civil or criminal penalties. Environmental Matters We are subject to environmental laws and regulations particularly state and local laws and regulations relating to industrial waste and emissions.
Standard sensors Our standard, or catalog, sensors are generally used to detect the presence of a magnetic or metallic material to determine position or speed. We believe our spintronic sensors are smaller, more precise, more reliable, and lower power than competing devices. Our major market for standard sensors is the Industrial Internet of Things (IIoT) for factory automation.
Standard sensors Our standard, or catalog sensors are generally used to detect the presence of a magnetic or metallic material to determine position, rotation, or speed. We believe our spintronic sensors are smaller, more precise, more reliable, and lower power than competing devices. Our major market for standard sensors is the Industrial Internet of Things (IIoT) for factory automation.
Our distributor agreements generally renew annually. In addition, we distribute versions of some of our products under private-brand partnerships with large integrated device manufacturers. These private-brand partnerships broaden our distribution and enhance our sales support, technical support, and brand awareness.
Our distributor agreements generally renew annually. In addition, we distribute versions of some of our products under private-brand partnerships with large integrated device manufacturers. These private-brand partnerships broaden our distribution and enhance our sales support, technical support, and product awareness.
Our wafers sources are based around the world; most of our packaging services take place in Asia. 5 Table of Contents Intellectual Property Patents As of March 31, 2022 we had more than 50 issued U.S. patents assigned to us.
Our wafers sources are based around the world; most of our packaging services take place in Asia. 5 Table of Contents Intellectual Property Patents As of March 31, 2023, we had more than 50 issued U.S. patents assigned to us.
Government Regulations We are subject to government regulations including, but not limited to, regulations related to environment, tax matters, securities, conflict minerals, ethics and foreign corrupt practices, import and export controls, product safety and liability, workplace health and safety, labor and employment, and data privacy.
Government Regulations We are subject to government regulations including, but not limited to, regulations related to environmental matters, tax matters, securities, conflict minerals, ethics and foreign corrupt practices, import and export controls, product safety and liability, workplace health and safety, labor and employment, and data privacy.
We incur and expect to continue to incur costs and expenses to comply with these regulations and may incur penalties for any failure to do so. Additionally, certain contracts required us maintain facilities and personnel security clearances to protect classified information.
We incur and expect to continue to incur costs and expenses to comply with these regulations and may incur penalties for any failure to do so. Additionally, certain contracts require us to maintain facilities and personnel security clearances to protect classified information.
Custom and medical sensors Our primary custom products are sensors for medical devices, which are customized to our customers’ requirements and manufactured under stringent medical device quality standards. Most are used to replace electromechanical magnetic switches.
Custom and medical sensors Our primary custom products are sensors for medical devices, which are customized to our customers’ requirements and manufactured under stringent medical device quality standards. Many are used to replace electromechanical magnetic switches.
Human Capital Resources We had 49 employees as of March 31, 2022, 47 of whom were full-time. We have policies to prevent discrimination based on gender, race, disability, ethnicity, nationality, religion, sexual orientation, gender identity, or gender expression.
Human Capital Resources We had 56 employees as of March 31, 2023, 51 of whom were full-time. We have policies to prevent discrimination based on gender, race, disability, ethnicity, nationality, religion, sexual orientation, gender identity, or gender expression.
Our Products and Markets Sensor Products and Markets Our sensor products detect the strength or gradient of magnetic fields and are often used to determine position or speed. The GMR changes its electrical resistance depending on the magnetic field.
Our Products and Markets Sensor Products and Markets Our sensor products detect the strength or gradient of magnetic fields and are often used to determine position or speed. GMR or TMR elements change electrical resistance depending on the magnetic field.
In our devices, GMR is combined with conventional foundry integrated circuitry and packaged in much the same way as conventional integrated circuits. We sell standard or catalog sensors, and custom sensors designed to meet customers’ exact requirements. Our sensors are quite small, very sensitive to magnetic fields, precise, and reliable.
In many of our devices, sensor elements are combined with foundry integrated circuitry or digital cores, and packaged in much the same way as conventional integrated circuits. Our sensors are small, highly sensitive to magnetic fields, precise, and reliable. We sell standard (“catalog”) sensors, and custom sensors designed to meet customers’ exact requirements.
Because our sensors have no moving parts, we believe they are inherently more reliable than electromechanical magnetic sensors. We also believe our sensors are smaller than the smallest electromechanical magnetic sensors, more precise in their magnetic switch points, and more sensitive.
Electromechanical magnetic sensors such as reed and micro-electromechanical system (MEMS) switches have been in use for several decades. Because our sensors have no moving parts, we believe they are inherently more reliable than electromechanical magnetic sensors. We also believe our sensors are smaller than the smallest electromechanical magnetic sensors, more precise in their magnetic switch points, and more sensitive.
Other trademarks we claim include “GMR Switch” and “GT Sensor.” Dependence on Major Customers We rely on several large customers for a significant percentage of our revenue, including Abbott Laboratories, Sonova AG, certain other medical device manufacturers, and certain distributors. The loss of one or more of these customers could have a material adverse effect on us.
Trademarks “NVE” and “IsoLoop” are our registered trademarks. Other trademarks we claim include “GMR Switch” and “GT Sensor.” Dependence on Major Customers We rely on several large customers for a significant percentage of our revenue, including Abbott Laboratories, Sonova AG, certain other medical device manufacturers, and certain distributors.
We believe our sensors have important advantages in medical devices compared to electromechanical switches, including no moving parts for inherent reliability, and being smaller, more sensitive, and more precise. Our sensors can be customized using customer-specific integrated signal processing and design variations that can include the range and sensitivity to magnetic fields, electrical resistance, and multisensor elements configuration.
We believe our sensors have important advantages in medical devices compared to electromechanical switches, including no moving parts for inherent reliability, and being smaller, more sensitive, and more precise. Our sensors can be customized for size, range and sensitivity to magnetic fields, electrical resistance, and embedded software.
We take affirmative action to ensure that applicants are employed, and that employees are treated during employment, without regard to their race, color, religion, sex, or national origin. We also take affirmative action to employ and advance veterans in employment. We offer employees free wellness programs.
We take affirmative action to ensure that applicants are employed, and that employees are treated during employment, without regard to their gender, race, disability, ethnicity, nationality, religion, sexual orientation, gender identity, or gender expression. We also take affirmative action to employ and advance veterans in employment.
Long-term product development programs in fiscal 2022 focussed on even more accurate TMR sensors and Magnetoresistive Random Access Memory (MRAM). Our Competition Industrial Sensor Competition Several other companies either make or may have the capability to make GMR or TMR sensors. Also, several competitors make solid-state industrial magnetic sensors including silicon Hall-effect sensors and anisotropic magnetoresistive (AMR) sensors.
Long-term product development programs in fiscal 2023 focused on even higher sensitivity TMR sensors and Magnetoresistive Random Access Memory (MRAM) for antitamper applications. Our Competition Industrial Sensor Competition Several other companies either make or may have the capability to make GMR or TMR sensors.
Compared to other solid-state sensors, our medical sensors may have advantages in size, sensitivity to small magnetic fields, or electrical interface simplicity. Coupler Competition Competing coupler technologies include optical couplers, inductive couplers (transformers), capacitive couplers, and radio-frequency modulation couplers. Prominent optical coupler suppliers include Broadcom Limited, Fairchild Semiconductor International, Lite-On Technology Corporation, Renesas Electronics Corporation, Toshiba Corporation, and Vishay Intertechnology.
Compared to other solid-state sensors, our medical sensors may have advantages in size, sensitivity to small magnetic fields, or electrical interface simplicity. Coupler Competition Competing coupler technologies include optical couplers, inductive couplers (transformers), capacitive couplers, and radio-frequency modulation couplers. Our strategy is to compete based on product features rather than to compete solely on price.
Our unique products support global trends of smart, low-power end nodes for the “Internet of Things.” We plan to monetize our technology by selling the products described below and licensing our MRAM technology. To grow product sales, we plan to broaden our sensor and coupler product lines, and longer term to target larger markets such as automotive electronics.
Our unique products support global trends of efficient energy conversion and smart, low-power end nodes for the “Internet of Things.” To grow product sales, we plan to broaden our sensor and coupler product lines and enhance our product benefits in target markets.
We believe those types of sensors are not as sensitive or power-efficient as our GMR or TMR sensors. Medical Sensor Competition Our sensors for medical devices face competition from electromechanical magnetic sensors and from other solid-state magnetic sensors. Electromechanical magnetic sensors such as reed and micro-electromechanical system (MEMS) switches have been in use for several decades.
Also, several competitors make solid-state industrial magnetic sensors including silicon Hall-effect sensors and anisotropic magnetoresistive (AMR) sensors. We believe those types of sensors are not as sensitive or power-efficient as our GMR or TMR sensors. Medical Sensor Competition Our sensors for medical devices face competition from electromechanical magnetic sensors and other solid-state magnetic sensors.
None of our employees are represented by a labor union or are subject to a collective bargaining agreement, and we believe we maintain good relations with our employees.
In the past fiscal year, we significantly increased average pay and fringe benefit expenditures to attract, retain, and motivate top-performing employees. None of our employees are represented by a labor union or are subject to a collective bargaining agreement, and we believe we maintain good relations with our employees.
New Product Status In the past year we began marketing a number of new and improved products, including: • a new type of current sensor; • new smart sensors for the Internet of Things; • ulraprecise rotational sensors for fine motion control and robotics; • data couplers with isolated power convertors to transmit power as well as data; and • high-sensitivity TMR magnetic sensors.
New Product Status In the past year, we began marketing a number of new and improved products, including: • additional ultraminiature isolated DC-to-DC convertor models; • an ultraminiature TMR magnetic sensor; • an ultrahigh-sensitivity TMR magnetic sensor; and • more products combining data couplers with isolated DC-to-DC convertors to transmit power as well as data.
Other production operations include wafer-level inspection and testing. Packaged parts are returned to us to be tested, inventoried, and shipped. Sales and Product Distribution We rely on distributors who stock our products and sell them in more than 75 countries. Distributors of our products include America II Electronics, Inc., Angst+Pfister Sensors and Power, Avnet companies, and Digi-Key Corporation.
We significantly increased our product testing capacity in the two most recent fiscal years in response to increased demand for our products. Sales and Product Distribution We rely on distributors who stock and resell our products in more than 75 countries. Distributors of our products include America II Electronics, Inc., Angst+Pfister Sensors and Power, Avnet companies, and Digi-Key Corporation.
Our strategy is to compete based on product features rather than to compete solely on price. IsoLoop couplers are smaller and therefore require less circuit board space per channel than most competing couplers. Our other advantages over competing technologies may include less signal distortion, longer product life, and lower power consumption.
Our couplers are smaller and therefore require less circuit board space per channel than most competing couplers. Our other advantages over competing technologies may include smaller size, higher immunity to transients, and longer product life. MRAM Competition Several emerging technologies could compete with MRAM.
Future custom sensor target markets include consumer electronics, automotive electronics, and biosensors. Coupler Products and Markets Our spintronic couplers combine a GMR sensor element and an integrated microscopic coil. The coil creates a small magnetic field that is picked up by the spintronic sensor, transmitting data almost instantly.
Coupler Products and Markets Our spintronic couplers combine a GMR sensor element and an integrated microscopic coil. The coil creates a small magnetic field that is detected by the spintronic sensor, transmitting data almost instantly. Couplers are also known as “isolators” because they electrically isolate the coupled systems. Our major coupler markets are power conversion and the IIoT.
The patent has been reissued as RE 44,878 and expires May 15, 2022. Much of our intellectual property has been developed with U.S. Government support. Under federal legislation, companies normally may retain the principal worldwide patent rights to any invention developed with U.S. Government support. Trademarks “NVE” and “IsoLoop” are our registered trademarks.
We have patents on advanced MRAM designs that we believe are important, including patents that relate to magnetothermal MRAM, spin-momentum MRAM, and synthetic antiferromagnetic storage. Some of our intellectual property has been developed with U.S. Government support. Under federal legislation, companies normally may retain the principal worldwide patent rights to any invention developed with U.S. Government support.
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Couplers are also known as “isolators” because they electrically isolate the coupled systems. Our IsoLoop couplers are faster than the fastest optical couplers. Our major coupler market is currently the Industrial Internet of Things (IIoT) for factory automation. We are targeting the automotive market longer term. MRAM Products and Markets MRAM uses spintronics to store data.
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Our couplers enable more efficient power conversion and interconnections to implement the IIoT for advanced factory automation. DC-to-DC Convertor Products and Markets Our isolated DC-to-DC convertors transfer energy between systems without direct electrical connections. These components are used in power conversion systems and industrial networks for the IIoT.
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It has been called the ideal or universal memory because of its potential to combine the speed of SRAM, the density of DRAM, and the nonvolatility of flash memory. Data is stored in the spin of the electrons in thin metal alloy films, and read with spin-dependent tunnel junctions. Unlike electrical charge, the spin of an electron is inherently permanent.
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We also make products that combine couplers and DC-to-DC convertors to transmit power as well as data. MRAM Products and Markets MRAM uses spintronics to store data. Unlike electrical charge, the spin of an electron is inherently permanent. We have invented several types of memory cells including inventions related to advanced MRAM designs and MRAM for tamper prevention or detection.
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We have invented several types of MRAM memory cells including inventions related to advanced MRAM designs and MRAM for tamper prevention or detection. Our strategy is to develop, manufacture, and sell low bit-density MRAM for applications such as tamper prevention and detection. For high bit-density MRAM, our strategy is to license our technology to companies with large-scale memory manufacturing capabilities.
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Our MRAM strategy has been focused on low bit density for applications such as tamper prevention and detection. Product Manufacturing Our product manufacturing includes “front-end” wafer production and “back-end” product testing. Wafer production is a cleanroom area with specialized equipment to deposit, pattern, etch, and process spintronic materials.
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Product Manufacturing The heart of our fabrication facility is a cleanroom area with specialized equipment to deposit, pattern, etch, and process spintronic materials. Most of our products are fabricated in our facility using either raw silicon wafers or foundry wafers.
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We either saw wafers to be sold in die form, or send wafers to Asia for dicing and packaging. Other production operations include wafer-level inspection and testing.
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MRAM Competition A number of companies compete or may compete with us for MRAM research and development or service business, or may be attempting to develop MRAM intellectual property for licensing to others.
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Packaged parts are returned to us to be tested, inventoried, and shipped. 4 Table of Contents Our facility has been certified under the ISO 9001:2015 quality management standard and is an Approved Place of Manufacture under ECS/CIG 021-024: 2014. We believe having our own U.S. wafer production and test capabilities are an advantage over competitors that outsource such operations.
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Emerging technologies that could compete with MRAM include graphene and carbon nanotubes, phase-change memory (PCM; also known as chalcogenide, 3D XPoint, or Ovonic memory), resistive RAM (ReRAM or RRAM), conductive bridge RAM (CBRAM), memory resistors (“memristors”), and conductive metal oxide (CMOx) memory. MRAM may have advantages over these technologies in either manufacturability, speed, bit density, data retention, or endurance.
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The loss of one or more of these customers could have a material adverse effect on us.
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We have patents on advanced MRAM designs that we believe are important, including patents that relate to magnetothermal MRAM, spin-momentum MRAM, and synthetic antiferromagnetic storage. Although it is not critical to our current business, we have identified U.S. patent 6,744,086 titled “Current switched magnetoresistive memory cell” as particularly important for successful high-density, high-performance MRAMs.
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We offer employees excellent fringe benefits, including medical insurance coverage paid for mostly by the Company, dental insurance, Company-paid life and accidental death and dismemberment insurance, Company-paid long-term disability insurance, free wellness programs, Company-funded Health Savings Accounts, generous 401(k) matches, ample holidays and Paid Time Off, tuition reimbursement, and free coffee.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

31 edited+7 added−5 removed26 unchanged
Biggest changeRisks Related to our Industry We face an uncertain economic environment in the industries we serve, which could adversely affect our business. We sell our products into the semiconductor market, which is highly cyclical. We cannot predict the timing, strength, or duration of any economic slowdown or subsequent recovery, worldwide or in the industries we serve.
Biggest changeWe sell our products into the semiconductor market, which has been highly cyclical. We cannot predict the timing, strength, or duration of any economic slowdown, recession, semiconductor-industry slowdown or subsequent recovery. The economic environment could have a material adverse impact on our business and revenue. Our business and our reliance on intellectual property exposes us to litigation risks.
Failure to meet technical or quality requirements or a negative customer audit could result in the loss of current sales revenue, customers, and future sales. We may lose revenue if we are unable to renew customer agreements. We have agreements with certain customers, including a Supplier Partnering Agreement, as amended, with Abbott Laboratories, which expires December 31, 2022.
Failure to meet technical or quality requirements or a negative customer audit could result in the loss of current sales revenue, customers, and future sales. We may lose revenue if we are unable to renew customer agreements. We have agreements with certain customers, including a Supplier Partnering Agreement, as amended, with Abbott Laboratories, which expires December 31, 2023.
Sanctions against Russia could affect supplies or prices of materials supplied by Russia, including materials we use such as aluminum, copper, helium, magnesium, manganese, nickel, palladium, platinum, and titanium. Materials supplied by Ukraine include neon, which may be used to produce some of our foundry warfers.
Sanctions against Russia could affect supplies or prices of materials supplied by Russia, including materials we use such as aluminum, copper, helium, magnesium, manganese, nickel, palladium, platinum, and titanium. Materials supplied by Ukraine include neon, which may be used to produce some of our foundry wafers.
We expect these trends to continue, and we may lose business to competitors or it may be necessary to significantly reduce our prices in order to acquire or retain business. These factors could cause a material adverse impact on our financial condition, revenue, gross profit margins, or income.
We expect these trends to continue, and we may lose business to competitors or it may be necessary to significantly reduce our prices to acquire or retain business. These factors could cause a material adverse impact on our financial condition, revenue, gross profit margins, or income.
Any damage to our reputation and/or the reputation of our products, or the reputation of our customers or their products could limit the market for our and our customers’ products and harm our results of operations. We may lose business and revenue if our critical production equipment fails.
Any damage to our reputation and/or the reputation of our products, or the reputation of our customers or their products could limit the market for our and our customers’ products and harm our results of operations. 8 Table of Contents We may lose business and revenue if our critical production equipment fails.
We cannot predict if these agreements will be renewed, or if renewed, under what terms. Although it is possible we could continue to sell products to these customers without formal agreements, an inability to agree on mutually acceptable terms or the loss of these customers could have a significant adverse impact on our revenue and our profitability.
We cannot predict if these agreements will be renewed, or if renewed, under what terms. Although it is possible we could continue to sell products to these customers without formal agreements, an inability to agree on mutually acceptable terms could have a significant adverse impact on our revenue or profitability.
Any of these results would increase our costs or harm our operating results. 9 Table of Contents Risks Related to our Stock Any decisions to reduce or discontinue paying cash dividends to our shareholders could cause the market price of our common stock to decline.
Any of these results would increase our costs or harm our operating results. Risks Related to Our Stock Any decisions to reduce or discontinue paying cash dividends to our shareholders could cause the market price of our common stock to decline.
Future dividends will be subject to Board approval and will take into account factors including our results of operations, cash and marketable security balances, the timing of securities maturations, estimates of future cash requirements, fixed asset requirements, the impacts of the COVID-19 pandemic, and other factors our Board may deem relevant.
Future dividends will be subject to Board approval and will take into account factors including our results of operations, cash and marketable security balances, the timing of securities maturations, estimates of future cash requirements, fixed asset requirements, and other factors our Board may deem relevant.
Changes in tax law, in our tax rates or in exposure to additional income tax liabilities may materially and adversely affect our financial condition, results of operations, and cash flows. Changes in law and policy relating to taxes or changes in tax rates may materially and adversely affect our financial condition, results of operations and cash flows.
Changes in tax law, in our tax rates or in exposure to additional income tax liabilities may materially and adversely affect our financial condition, results of operations, and cash flows.
Risks relating to operating in foreign markets that could impair our results of operations include economic and political instability; acts of God, including floods, typhoons, cyclones and earthquakes; public health crises including, but not limited to, the COVID-19 pandemic; difficulties in enforcement of contractual obligations and intellectual property rights; changes in regulatory requirements, tariffs, customs, duties, and other trade barriers; transportation delays; and other uncertainties relating to the administration of, or changes in, or new interpretation of, the laws, regulations, and policies of jurisdictions where we do business.
Risks relating to operating in foreign markets that could impair our results of operations include economic and political instability; acts of God, including floods, typhoons, cyclones, and earthquakes; public health crises including, but not limited to, difficulties in enforcement of contractual obligations and intellectual property rights; changes in regulatory requirements; changes in import/export regulations and tariffs; transportation delays; and other uncertainties relating to the administration of, or changes in, or new interpretation of, the laws, regulations, and policies of jurisdictions where we do business.
The market price of our common stock may be significantly affected by many factors, some of which are beyond our control, including: • the announcement of new products, product enhancements, or contracts by us or our competitors; • delays in our introduction of new products or technologies or market acceptance of these products or technologies; • loss of customers, decreases in customers’ purchases, or decreases in customers’ purchase prices; • changes in demand for our customers’ products; • quarterly variations in our financial results, revenue, or revenue growth rates; • speculation in the press or analyst community about our business, potential revenue, or potential earnings; • general economic conditions or market conditions specific to industries we or our customers serve or may serve; • legal proceedings involving us, including intellectual property litigation or class action litigation; • changes in Federal corporate income tax rates or changes in other tax provisions; • changes in tariffs, customs, duties, or other trade barriers in foreign jurisdictions where we purchase raw materials or sell our products; • the impact or perceived impact of the COVID-19 pandemic on general economic conditions, our industry, or our supply chain; and • our stock repurchase and dividend policies and decisions. 10 Table of Contents
The market price of our common stock may be significantly affected by many factors, some of which are beyond our control, including: • the announcement of new products or product enhancements by us or our competitors; • delays in our introduction of new products or technologies or market acceptance of these products or technologies; • loss of customers, decreases in customers’ purchases, or decreases in customers’ purchase prices; • changes in demand for our customers’ products; • quarterly variations in our financial results, revenue, or revenue growth rates; • speculation in the press or elsewhere about our business, potential revenue, or potential earnings; • general economic conditions or market conditions specific to industries we or our customers serve or may serve; • legal proceedings involving us, including intellectual property litigation or class action litigation; • changes in Federal or state corporate income tax rates, tax credits, or other changes in tax policies; • changes in tariffs, customs, duties, or other trade barriers in foreign jurisdictions where we purchase raw materials or sell our products; and • our stock repurchase and dividend policies and decisions. 10 Table of Contents
Leadtimes for packaging services have increased during the COVID-19 pandemic and there have been shortages of raw materials and equipment our packaging vendors need for their process. Government lockdown restrictions, labor shortages, and raw-material shortages have reduced our vendors' capacity and increased their lead-times. These conditions could continue, worsen, or recur.
Lead times for packaging services increased during the COVID-19 pandemic and there have been shortages of raw materials our packaging vendors need for their processes. Government lockdown restrictions, labor shortages, raw-material shortages, and supply-chain disruptions have reduced our vendors’ capacity and increased their lead times. These conditions could continue, worsen, or recur.
We face various cyber security threats, including threats to our information technology infrastructure and attempts to gain access to our proprietary or classified information, and denial-of-service attacks. Additionally, there is a risk of disruptions due to failures of our information technology infrastructure or service provider outages.
Our business could be negatively impacted by cybersecurity events or information technology disruptions. We face various cyber security threats, including threats to our information technology infrastructure and attempts to gain access to our proprietary or classified information, and denial-of-service attacks. Additionally, there is a risk of disruptions due to failures of our information technology infrastructure or service provider outages.
Such a recall could be harmful to our reputation for product safety and efficacy. Even if assertions that our products caused or contributed to device failure do not lead to product liability or contract claims, such assertions could harm our reputation and customer relationships.
Even if assertions that our products caused or contributed to device failure do not lead to product liability or contract claims, such assertions could harm our reputation and customer relationships.
We maintain inventory of some critical wafers, but we have not identified or qualified alternate suppliers for many of the wafers now being obtained from single sources. In the past fiscal year there have been industry-wide semiconductor wafer shortages and leadtimes have increased for certain of our foundry wafers.
Our critical suppliers include suppliers of certain raw silicon and semiconductor foundry wafers that are incorporated in our products. We maintain inventory of some critical wafers, but we have not identified or qualified alternate suppliers for many of the wafers now being obtained from single sources. In the past fiscal year, there were industry-wide semiconductor wafer shortages.
Such licenses or design modifications can be costly or could increase the cost of our products. In addition, we may decide to settle a claim or action against us, which settlement could be costly. We may also be liable for any past infringement, and we may be required to indemnify our customers against expenses relating to possible infringement.
In addition, we may decide to settle a claim or action against us, which settlement could be costly. We may also be liable for any past infringement, and we may be required to indemnify our customers against expenses relating to possible infringement.
While we have an in-house maintenance staff, maintenance agreements for certain equipment, some critical spare parts, and back-ups for some of the equipment, we cannot be sure we could repair or replace critical manufacturing equipment were it to fail.
While we have an in-house maintenance staff, maintenance agreements for certain equipment, some critical spare parts, and back-ups for some of the equipment, we cannot be sure we could repair or replace critical manufacturing equipment were it to fail. We are subject to risks inherent in doing business in foreign countries that could impair our results of operations.
Similarly, we cannot necessarily assess or quantify the impact of each such factor on the business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in forward-looking statements.
Similarly, we cannot necessarily assess or quantify the impact of each such factor on the business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in forward-looking statements. Risks Related to Our Business We face a tight labor market, competition for employees, and wage inflation.
Supply delays, interruptions, or loss of inventory could seriously jeopardize our ability to provide products that are critical to our business and operations and may cause us to lose revenue. 8 Table of Contents We are subject to risks inherent in doing business in foreign countries that could impair our results of operations.
Supply delays, interruptions, or loss of inventory could seriously jeopardize our ability to provide products that are critical to our business and operations and may cause us to lose revenue. 7 Table of Contents We risk losing business to our competitors.
The loss of supply of any critical chemicals or supplies could impact our ability to produce and deliver products and cause loss of revenue. There are a number of critical chemicals and supplies that we require to make products. These include certain gases, photoresists, polymers, metals, and specialized alloys.
There are a number of critical chemicals and supplies that we require to make products. These include certain gases, photoresists, polymers, metals, and specialized alloys.
We believe that our competition is increasing as the technology and markets mature. This has meant more competitors and more severe pricing pressure. In addition, our competitors may be narrowing or eliminating our performance advantages.
We have a number of competitors and potential competitors, many of whom have significantly greater financial, technical, and marketing resources than us. We believe that our competition is increasing as technology and markets mature. This has meant more competitors and more severe pricing pressure. In addition, our competitors may be narrowing or eliminating our performance advantages.
Public health crises could have an adverse effect on our operations and financial results. Public health crises could adversely affect our ongoing business operations. In particular, the COVID-19 pandemic has disrupted our supply chains and caused employee absences.
Public health crises could have an adverse effect on our operations and financial results. The COVID-19 pandemic disrupted our supply chains and caused employee absences. Impacts of the COVID-19 pandemic or other public health crises could have a material adverse effect on our results of operations or our financial condition.
Additionally, the assignment of a high credit rating does not preclude the risk of default on any marketable security. Defaults, default risks, or changes in market conditions could cause us to incur losses on our marketable securities, which could have a material adverse impact on our financial condition, income, or cash flows, and our ability to pay dividends.
Additionally, the assignment of a high credit rating does not preclude the risk of default on any marketable security. Any losses on our marketable securities could impact our financial condition, income, or cash flows, or our ability to pay dividends. We may not be able to enforce our intellectual property rights.
We may not be able to enforce our intellectual property rights. We protect our proprietary technology and intellectual property by seeking patents, trademarks, and copyrights, and by maintaining trade secrets through entering into confidentiality agreements with employees, suppliers, customers, and prospective customers depending on the circumstances.
We protect our proprietary technology and intellectual property by seeking patents, trademarks, and copyrights, and by maintaining trade secrets by entering into confidentiality agreements with employees, suppliers, customers, and prospective customers depending on the circumstances. We hold patents or are the licensee of others owning patented technology covering certain aspects of our products and technology.
We hold patents or are the licensee of others owning patented technology covering certain aspects of our products and technology. These patent rights may be challenged, rendered unenforceable, invalidated, or circumvented. Additionally, rights granted under the patents or under licensing agreements may not provide a competitive advantage to us.
These patent rights may be challenged, rendered unenforceable, invalidated, or circumvented. Additionally, rights granted under the patents or under licensing agreements may not provide a competitive advantage to us. Efforts to enforce patent rights can involve substantial expense and may not be successful.
As of March 31, 2022, we held $45,153,894 in short-term and long-term marketable securities, representing approximately 67% of our total assets. Conditions and circumstances beyond our control or ability to anticipate can cause downgrades and increased default risk, and such downgrades or increases in default risk are possible at any time.
As of March 31, 2023, we held $52,544,283 in short-term and long-term marketable securities, representing approximately 76% of our total assets. Business conditions, bond-market conditions, and interest rates increases beyond our control or ability to anticipate can cause credit-rating downgrades, increased default risk, or unrealized losses.
The loss of supply from any of our key single-source wafer suppliers could substantially impact our ability to produce and deliver products and seriously harm our business and financial condition. Our critical suppliers include suppliers of certain raw silicon and semiconductor foundry wafers that are incorporated in our products.
Labor shortages could impact our revenue and profitability, and increases in labor cost could adversely affect our profit margins and results of operations. The loss of supply from any of our key single-source wafer suppliers could substantially impact our ability to produce and deliver products and seriously harm our business and financial condition.
Failure to achieve or maintain any of these certifications or listings could cause us to be disqualified by one or more of our customers, and could have a material adverse impact on our business and revenue. 7 Table of Contents Federal legislation may not protect us against liability for the use of our products in medical devices and a successful liability claim could seriously harm our business and financial condition.
Failure to achieve or maintain any of our certifications or listings could cause us to be disqualified by one or more of our customers and could have a material adverse impact on our business and revenue.
The economic environment could have a material adverse impact on our business and revenue. Our business and our reliance on intellectual property exposes us to litigation risks. If patent infringement claims or actions are asserted against us, we may be required to obtain a license or cross-license, modify our existing technology or design a new noninfringing technology.
If patent infringement claims or actions are asserted against us, we may be required to obtain a license or cross-license, modify our existing technology or design a new noninfringing technology. Such licenses or design modifications can be costly or could increase the cost of our products.
Wafer supply interruptions for any reason, including acts of God such as floods, typhoons, cyclones, earthquakes, or pandemics could seriously jeopardize our ability to provide products that are critical to our business and operations, and may cause us to lose revenue. Risks related to extreme weather may be exacerbated by the effects of climate change.
Wafer supply interruptions for any reason could seriously jeopardize our ability to provide products that are critical to our business and operations, and may cause us to lose revenue. The loss of supply of any critical chemicals or supplies could impact our ability to produce and deliver products and cause loss of revenue.
Thus the patents held by or licensed to us may not afford us any meaningful competitive advantage. Also, our confidentiality agreements may not provide meaningful protection of our proprietary information. Our inability to maintain our proprietary rights could have a material adverse effect on our business, financial condition, and results of operations.
Furthermore, others may independently develop similar, superior, or parallel technologies to any technology developed by us, or our technology may prove to infringe on patents or rights owned by others. Thus the patents held by or licensed to us may not afford us any meaningful competitive advantage. Also, our confidentiality agreements may not provide meaningful protection of our proprietary information.
Removed
Risks Related to our Business We may lose revenue if any of our large customers cancel, postpone, or reduce their purchases. We rely on several large customers for a significant percentage of our revenue. These large customers include Abbott Laboratories, Sonova AG, certain other medical device manufacturers, and certain distributors.
Added
In the past two fiscal years, we have experienced increased competition for employees, increased employee turnover, and increased wage inflation. The labor market has been especially tight in Minnesota. We have significantly increased the wages we pay to remain competitive and attract new workers, especially production workers.
Removed
Although we have agreements with certain large customers, these agreements do not obligate customers to purchase from us and may not prevent price reductions. Furthermore, orders from our large customers can generally be reduced, postponed, or canceled.
Added
We purchase some wafers from manufacturers in China, which have been subject to tariffs and could be subject to further tariffs or restrictions in the future. Wafer supply could be affected by acts of God such as floods, typhoons, cyclones, earthquakes, or pandemics, and risks related to extreme weather may be exacerbated by the effects of climate change.
Removed
Any decreases in purchases, or the loss of any of our large customers, could have a significant impact on our revenue and our profitability. We risk losing business to our competitors. We have a number of competitors and potential competitors, many of whom have significantly greater financial, technical, and marketing resources than us.
Added
Changes in law and policy relating to Federal or state corporate taxes, changes in tax rates, or changes in our eligibility for tax credits could materially and adversely affect our financial condition, results of operations, and cash flows.
Removed
These and other impacts of COVID-19 pandemic or other public health crises could have a material adverse effect on our results of operations or our financial condition. Our business could be negatively impacted by cyber security events or information technology disruptions.
Added
Federal legislation may not protect us against liability for the use of our products in medical devices and a successful liability claim could seriously harm our business and financial condition.
Removed
Efforts to enforce patent rights can involve substantial expense and may not be successful. Furthermore, others may independently develop similar, superior, or parallel technologies to any technology developed by us, or our technology may prove to infringe on patents or rights owned by others.
Added
We are subject to risks associated with the availability of natural resources and energy. We use significant resources such as electricity, natural gas, and water in our production processes. New or increased climate change regulation could increase our energy costs, for example as a result of carbon pricing impacts on natural gas or electrical utilities.
Added
Furthermore, environmental regulations or the impacts of climate change could curtail the availability of electricity we need for production or increase the number of incidents of power outages. Increased natural resource or energy costs, or decreased availability, could have adverse effects on our results of operations by increasing our costs and expenses or requiring us to change our production processes.
Added
Our inability to maintain our proprietary rights could have a material adverse effect on our business, financial condition, and results of operations. 9 Table of Contents Risks Related to Our Industry We face an uncertain economic environment in the industries we serve, which could adversely affect our business.

Item 2. Properties

Properties — owned and leased real estate

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Removed
The facility is currently being utilized at less than maximum capacity to allow for growth, and we believe the facility is adequate to meet our current requirements. We hold no investments in real estate.
Added
We have expanded the facility’s production space in recent years are have limited options to further expand production in the current facility. We are exploring options for future expansion if necessary. We hold no investments in real estate.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeStock Repurchase Program We repurchased 2,888 shares of our Common Stock in fiscal 2022 and 1,806 shares in fiscal 2021.
Biggest changeStock Repurchase Program We repurchased 1,000 shares in fiscal 2023 and 2,888 shares in fiscal 2022.
Securities Authorized for Issuance Under Equity Compensation Plans Information regarding our securities authorized for issuance under equity compensation plans will be included in the section “Equity Compensation Plan Information” of our Proxy Statement for our 2022 Annual Meeting of Shareholders, and is incorporated by reference into Item 12 of this Report.
Securities Authorized for Issuance Under Equity Compensation Plans Information regarding our securities authorized for issuance under equity compensation plans will be included in the section “Equity Compensation Plan Information” of our Proxy Statement for our 2023 Annual Meeting of Shareholders and is incorporated by reference into Item 12 of this Report.
Our dividend policy is subject to change at any time, and future dividends will be subject to Board approval and subject to the company’s results of operations, cash and marketable security balances, our forecasts of future cash requirements, and other factors our Board may deem relevant. Shareholders We have approximately 57 shareholders of record as of April 13, 2022.
Our dividend policy is subject to change at any time, and future dividends will be subject to Board approval and subject to the company’s results of operations, cash and marketable security balances, our forecasts of future cash requirements, and other factors our Board may deem relevant. Shareholders We had approximately 54 shareholders of record as of April 12, 2023.
Removed
All purchases in fiscal 2022 were made in the quarter ended March 31, 2022 as detailed below: Month Total number of shares purchased(1) Average price paid per share Total number of shares purchased as part of publicly announced program(2) Max. approximate dollar value of shares that may yet be purchased under the program January 1, 2022 – January 31, 2022 - $ - - $ 3,762,040 February 1, 2022 – February 28, 2022 2,000 $ 57.16 2,000 $ 3,647,729 March 1, 2022 – March 31, 2022 888 $ 55.42 888 $ 3,598,519 Total 2,888 2,888 (1) All shares were purchased under the plan described in note (2) below.
Added
The Stock Repurchase Program may be modified or discontinued at any time without notice, and our Board of Directors has resolved to forgo stock buybacks for five years if, under Government policies, such a voluntary agreement would result in preferential treatment for grants under the CHIPS and Science Act of 2022. 11 Table of Contents
Removed
(2) On January 21, 2009 we announced that our Board of Directors authorized the repurchase of up to $2,500,000 of our Common Stock from time to time in open market, block, or privately negotiated transactions.
Removed
The timing and extent of any repurchases depends on market conditions, the trading price of the company’s stock, and other factors, and subject to the restrictions relating to volume, price, and timing under applicable law. On August 27, 2015, we announced that our Board of Directors authorized up to $5,000,000 of additional repurchases.
Removed
Our repurchase program does not have an expiration date and does not obligate us to purchase any shares. The Program may be modified or discontinued at any time without notice. 11 Table of Contents

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeNet deferred tax assets included $88,710 in deferred tax assets for stock-based compensation deductions as of March 31, 2022 and $75,189 as of March 31, 2021. 12 Table of Contents Results of Operations The following table summarizes the percentage of revenue and year-to-year changes for various items for the last two fiscal years: Percentage of Revenue Year Ended March 31 Year- to-Year 2022 2021 Change Revenue Product sales 95.9 % 96.1 % 25.9 % Contract research and development 4.1 % 3.9 % 35.6 % Total revenue 100.0 % 100.0 % 26.3 % Cost of sales 23.2 % 19.3 % 52.0 % Gross profit 76.8 % 80.7 % 20.2 % Expenses Research and development 10.8 % 14.9 % (8.1 )% Selling, general, and administrative 5.5 % 6.2 % 11.6 % Total expenses 16.3 % 21.1 % (2.4 )% Income from operations 60.5 % 59.6 % 28.1 % Interest income 4.3 % 7.1 % (21.8 )% Income before taxes 64.8 % 66.7 % 22.9 % Income tax provision 11.0 % 12.0 % 17.5 % Net income 53.8 % 54.7 % 24.1 % Total revenue for fiscal 2022 increased 26% compared to fiscal 2021 due to a 26% increase in product sales and a 36% increase in contract research and development revenue.
Biggest changeNet deferred tax assets included $71,734 in deferred tax assets for stock-based compensation deductions as of March 31, 2023 and $88,710 as of March 31, 2022. 12 Table of Contents Results of Operations The following table summarizes the percentage of revenue and year-to-year changes for various items for the last two fiscal years: Percentage of Revenue Year- Year Ended March 31, to-Year 2023 2022 Change Revenue Product sales 97.2 % 95.9 % 43.8 % Contract research and development 2.8 % 4.1 % (5.6 ) % Total revenue 100.0 % 100.0 % 41.7 % Cost of sales 21.1 % 23.2 % 28.7 % Gross profit 78.9 % 76.8 % 45.7 % Expenses Research and development 6.8 % 10.8 % (11.7 ) % Selling, general, and administrative 5.1 % 5.5 % 33.6 % Total expenses 11.9 % 16.3 % 3.5 % Income from operations 67.0 % 60.5 % 57.0 % Interest income 3.8 % 4.3 % 23.7 % Income before taxes 70.8 % 64.8 % 54.8 % Provision for income taxes 11.5 % 11.0 % 47.0 % Net income 59.3 % 53.8 % 56.4 % Total revenue for fiscal 2023 increased 42% compared to fiscal 2022 due to a 44% increase in product sales, partially offset by a 6% decrease in contract research and development revenue.
Liquidity and Capital Resources Overview Our liquidity and operating capital requirements are primarily for purchases of raw materials such as foundry wafers, purchases of packaging services, and for the maintenance of work-in-process inventories. We maintain most of our marketable securities as long-term to maximize yield and fund future dividends.
Liquidity and Capital Resources Overview Our liquidity and operating capital requirements are primarily for purchases of raw materials such as foundry wafers, purchases of packaging services, and the maintenance of work-in-process inventories. We maintain most of our marketable securities as long-term to maximize yield and fund future dividends.
Purchases in fiscal 2022 were primarily for capital equipment to increase our production throughput and capacity and were financed with cash provided by operating activities. Our capital expenditures can vary significantly from year to year depending on our needs and equipment purchasing opportunities.
Purchases in fiscal 2023 and 2022 were primarily for capital equipment to increase our production throughput and capacity and were financed with cash provided by operating activities. Our capital expenditures can vary significantly from year to year depending on our needs and equipment purchasing opportunities.
Our inventory reserve was $215,000 as of March 31, 2022 and $230,000 as of March 31, 2021. 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.
Our inventory reserve was $215,000 as of March 31, 2023 and March 31, 2022. 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.
In addition to cash dividends to shareholders paid in fiscal 2022, on May 4, 2022 we announced that our Board had declared a cash dividend of $1.00 per share of Common Stock, or $4,830,826 based on shares outstanding as of April 29, 2022, to be paid May 31, 2022.
In addition to cash dividends to shareholders paid in fiscal 2023, on May 3, 2023, we announced that our Board had declared a cash dividend of $1.00 per share of Common Stock, or $4,830,826 based on shares outstanding as of April 28, 2023, to be paid May 31, 2023.
We had $483,469 of net deferred tax assets as of March 31, 2022 and $73,538 as of March 31, 2021.
We had $572,038 of net deferred tax assets as of March 31, 2023, and $483,469 as of March 31, 2022.
Cash and cash equivalents were $10,449,510 as of March 31, 2022 compared to $10,427,340 as of March 31, 2021.
Cash and cash equivalents were $1,669,896 as of March 31, 2023, compared to $10,449,510 as of March 31, 2022.
The $22,170 increase in cash and cash equivalents was due to $12,503,679 in net cash provided by operating activities and $7,015,421 net cash provided by investing activities, partially offset by $19,496,930 net cash used in financing activities. 13 Table of Contents Operating Activities Net cash provided by operating activities related to product sales and research and development contract revenue as our primary source of working capital for fiscal 2022 and 2021.
The $8,779,614 decrease in cash and cash equivalents was due to $19,344,004 net cash used in financing activities and $8,527,108 net cash used by investing activities, partially offset by $19,091,498 in net cash provided by operating activities. 13 Table of Contents Operating Activities Net cash provided by operating activities related to product sales and research and development contract revenue as our primary source of working capital for fiscal 2023 and 2022.
Financing Activities Net cash used in financing activities in fiscal 2022 was due to $19,333,409 in cash dividends to shareholders and $163,521 in repurchases of our common stock.
Financing Activities Net cash used in financing activities in fiscal 2023 was due to $19,323,304 in cash dividends to shareholders and $20,700 of common stock repurchases.
The increase in product sales was primarily due to increased purchases by existing customers, and sales increased in most of our markets and product lines. The increase in contract research and development revenue was due to new contracts..
The increase in product sales was primarily due to increased purchases by existing customers, and sales increased in most of our markets and product lines. The decrease in contract research and development revenue was due to the completion of certain contracts. Gross profit as a percentage of revenue increased to 79% for fiscal 2023 from 77% for fiscal 2022.
Total expenses decreased 2% for fiscal 2022 compared to fiscal 2021 due primarily to a 8% decrease in research and development expense, partially offset by a 12% increase in selling, general, and administrative expense. The decrease in research and development expense was primarily due to staffing changes and the completion of certain product development activities.
The increase was primarily due to economies of scale from increased production and increased prices, partially offset by increased material and labor costs. Total expenses increased 4% for fiscal 2023 compared to fiscal 2022 due primarily to a 34% increase in selling, general, and administrative expense, partially offset by a 12% decrease in research and development expense.
Investing Activities Net cash provided by investing activities in fiscal 2022 was due to marketable security maturities of $7,500,000 and fixed assets purchases of $484,579. The $484,579 of fixed asset purchases in fiscal 2022 were a significant increase from $62,727 in fiscal 2021.
Investing Activities Net cash used in investing activities in fiscal 2023 was due to marketable securities purchases of $28,441,317 and fixed assets purchases of $935,791, partially offset by marketable securities maturations of $20,750,000 and the receipt of a $100,000 tenant-improvement allowance. The $935,791 of fixed asset purchases in fiscal 2023 was a significant increase from $484,579 in fiscal 2022.
Net cash provided by operating activities was $12,503,679 for fiscal 2022 and $13,364,832 for fiscal 2021. Accounts receivable increased $2,740,548 primarily due to the timing of sales to and payments from customers. Inventory increased $1,187,858 primarily due to our decisions to increase work in process in order to mitigate longer vendor lead-times.
Net cash provided by operating activities was $19,091,498 for fiscal 2023 and $12,503,679 for fiscal 2022. Accounts receivable increased $1,818,515 primarily due to increased product sales and the timing of sales to customers. Inventory increased $1,328,375 primarily due to our decisions to increase inventories to support increased product sales and to mitigate supply-chain risks.
The increase in selling, general, and administrative expense was primarily due to staffing changes and increased employee compensation. Interest income for fiscal 2022 decreased 22% due to a decrease in our available-for-sale securities and a decrease in the average interest rates on those securities.
Interest income for fiscal 2023 increased 24% due to an increase in our available-for-sale securities and an increase in the average interest rates on those securities. Our effective tax rate for fiscal 2023 decreased to 16% of income before taxes from 17% for fiscal 2022.
Removed
Gross profit as a percentage of revenue decreased to 77% for fiscal 2022 from 81% for fiscal 2021 primarily due to increased costs, partially offset by increased prices. Material, labor, and services costs increased significantly in the most recent fiscal year.
Added
The decrease in research and development expense was primarily due to the reallocation of resources to revenue-generating activities. The increase in selling, general, and administrative expense was primarily due to staffing changes and increased employee compensation.
Removed
The 24% increase in net income in fiscal 2022 compared to the prior year was primarily due to an increase in total revenue. The Impact of the COVID-19 Pandemic We believe the impact of the COVID-19 pandemic on customer demand was less in the year ended March 31, 2022 compared to the prior year.
Added
The decrease was due to $197,008 in investment tax credits under the CHIPS and Science Act of 2022. Such credits require qualifying investments, and eligibility criteria are subject to changes in Federal tax policies. Therefore, our effective tax rate in fiscal 2023 may not be indicative of the rate for future periods.
Removed
We believe the impact of the pandemic on our supply chain, however, was significantly more in the year ended March 31, 2022 than in the prior year. Supply-chain shortages may have been exacerbated by COVID-19 lockdowns in China in late fiscal 2022. We expect supply-chain shortages to continue in fiscal 2023.
Added
The 56% increase in net income in fiscal 2023 compared to the prior year was primarily due to increased product sales, increased gross profit margin, and increased interest income.
Removed
Accounts payable and accrued expenses increased $1,422,677 due to an $815,783 increase in accrued expenses and a $606,944 increase in accounts payable. The increase in accounts payable was due to the timing of vendor payments. The increase in accrued expenses was due to increases in accrued payroll and income taxes payable.

Other NVEC 10-K year-over-year comparisons