EXHIBIT 99.1

                                                                    NEWS RELEASE
[LOGO] HEI INC
6385 Old Shady Oak Road
Eden Prairie, Minnesota 55344 USA
952-443-2500

CONTACTS:                                                  FOR IMMEDIATE RELEASE
         Anthony J. Fant, CEO
         Steve E. Tondera, CFO


                HEI, INC. ACQUIRES MEDICAL DEVICE DEVELOPMENT AND
               MANUFACTURING BUSINESS FROM COLORADO MEDTECH, INC.


Minneapolis, MN. and Boulder, CO.- January 24, 2003 -- HEI, Inc. (Nasdaq: HEII)
and Colorado MEDtech, Inc. (Nasdaq: CMED) today jointly announced that HEI has
acquired the Colorado Operations of Colorado MEDtech in a transaction creating a
global medical component design and manufacturing outsource business.

HEI noted that integrating Colorado MEDtech's Colorado operations with HEI will
result in a business that will be a strong contributor to HEI's overall results.
HEI said the agreement is expected to enhance HEI's long-term earnings and
financial position.

In consideration for HEI stock and subordinated debt, HEI has acquired the
products, technology and facilities related to Colorado MEDtech's advanced
medical technology development and manufacturing business. The transaction does
not include Colorado MEDtech's Kalona, Iowa based CIVCO Medical Instrument
business unit, which provides medical imaging products and accessories to the
ultrasound market.

HEI estimates that the acquired business will have revenue somewhere between
$20-$25 million for calendar year 2003 and is projecting that it will be
accretive to earnings per share - impacting HEI's earnings per share in the
second quarter of its fiscal year 2003.

 "I am very pleased that an agreement has been reached with Colorado MEDtech,"
said Anthony Fant, CEO of HEI. "HEI and Colorado MEDtech's Boulder division
present an extraordinarily good fit from the standpoint of customer and
technology synergies. By combining these businesses we can achieve a strong
competitive status worldwide without overlaps. The company that will emerge will
be uniquely equipped to meet out customers needs in the 21st Century. HEI has
been involved in the design and production of microlectronics circuits and
products for the medical and hearing business for over 35 years. This
acquisition makes us one of world's leading medical component design and
manufacturing outsource businesses. This market remains stable and we believe
that this acquisition will position us for substantial revenue growth and
profits as the trend to outsourcing continues to gain momentum in the medical
technology market. The consolidation of the operations and the restructured
workforce will greatly reduce costs and will prove to be a springboard for
exciting new business opportunities. This






transaction provides a truly progressive move for both our businesses. We are
extremely excited by what we view as a tremendous opportunity for growth."


"This transaction is important because it should provide a smooth transition for
clients, who will be able to continue their important work with their project
teams," said Stephen K. Onody, President and CEO of Colorado MEDtech. "The
conclusion of this transaction is a part of Colorado MEDtech's continuing plan
to maximize shareholder value."

ThinkEquity Partners, LLC acted as financial advisor to HEI, Inc. Colorado
MEDtech was advised by Tri-Artisan, LLC.

ABOUT HEI, INC
HEI, Inc. specializes in the design and manufacture of high performance, ultra
miniature microelectronic devices and high-technology products incorporating
those devices. HEI contributes to its customers' competitiveness in the hearing,
medical, communications, wireless and contact smart cards, other RF
applications, and industrial markets through innovative design solutions and by
the application of state-of-the art materials, processes and manufacturing
capabilities.

ABOUT COLORADO MEDTECH, INC
Colorado MEDtech, Inc., through its CIVCO Medical Instruments Co., Inc.
subsidiary, is a full service developer and manufacturer of medical devices and
equipment for the ultrasound and minimally invasive OEM and end-user markets.

HEI'S FORWARD-LOOKING STATEMENTS:
Information in this news release, which is not historical, includes
forward-looking statements made pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. Statements contained in this
press release, including the growth of specific markets, improved
competitiveness or results and the estimated HEI revenue, cash flow and profits,
are forward looking statements. All of such forward-looking statements involve
risks and uncertainties including, without limitation, adverse business or
market conditions, the ability of HEI to secure and satisfy customers, the
availability and cost of materials from HEI's suppliers, adverse competitive
developments, change in or cancellation of customer requirements, and other
risks detailed from time to time in HEI's SEC filings.

COLORADO MEDTECH'S FORWARD-LOOKING STATEMENTS
The statements in this news release are not historical facts, including those
regarding strategic alternatives, are forward-looking statements that represent
management's beliefs and assumptions based on currently available information.
Forward-looking statements can be identified by the use of words such as
"believes," "intends," "estimates," "may," "will," "should," "anticipated,"
"expected" or comparable terminology or by discussions of strategy. Although the
Company believes that the expectations reflected in such forward-looking
statements are reasonable, it cannot assure that these expectations will prove
to be correct. Such statements involve risks and uncertainties including, but
not limited to, the risk that the Company may not be able to successfully
complete one or more transactions identified in its exploration of strategic
alternatives, the risk that the Company's existing level of orders may not be
indicative of the level or trend of future orders, the risk that the Company may
not successfully complete the work encompassed by current or future orders, the
risk that unforeseen technical or production difficulties may adversely impact
project timing and financial performance, the risk of an adverse result in
pending or potential litigation, the risks associated with regulation by the
Federal Food and Drug Administration including compliance with the Quality
System Regulation, the risk that acquired companies cannot be successfully
integrated with the Company's existing operations and the risk that a downturn
in general economic conditions or customer budgets may adversely affect research
and development and capital expenditure budgets of potential customers upon
which the Company is dependent. Should one or more of these risks materialize
(or the consequences of such a development worsen), or should the underlying
assumptions prove incorrect, actual results could differ materially from those
forecasted or expected. These factors are more fully described in the Company's
documents filed from time to time with the Securities and Exchange Commission.
The Company disclaims any intention or obligation to update publicly or revise
such statements whether as a result of new information, future events or
otherwise.