NEWS RELEASE
HEI INC
P. O. Box 5000
Victoria, Minnesota 55386 USA
952-443-2500
CONTACTS: FOR IMMEDIATE RELEASE
Anthony J. Fant, CEO
Donald R. Reynolds, President/COO
Steve E. Tondera, CFO
HEI PROVIDES BUSINESS AND FINANCIAL UPDATE
MINNEAPOLIS, April 19, 2001 -- HEI, Inc. (Nasdaq: HEII, www.heii.com) a leader
in the design and manufacture of microelectronics for the hearing, medical and
communications markets, today provided a financial update and status of actions
taken to address current business and economic issues.
Due to the continued general economic downturn, and specifically a slowdown in
the hearing, RFID/Access, and electronic contract manufacturing markets, HEI
expects revenue for its fiscal third quarter to be down 5% to 10% sequentially
from fiscal second quarter, but 5% above third quarter a year ago. The Company
expects a third quarter net loss of approximately 11 cents per share, including
expenses associated with the phase out of the Mexico manufacturing facility.
This facility will be completely phased out in the third quarter with profitable
programs in strategic markets being transferred to other HEI locations. The
Company is taking this action to focus its resources as it expands its broadband
and hearing businesses. For the four quarters ended March 3, 2001, HEI would
have earned 45 cents per share if the losses associated with the Mexico facility
were excluded, compared to a reported net income of 3 cents per share including
the losses associated with the Mexico facility.
The Company believes that the hearing and medical markets will improve in the
fourth quarter of 2001. This combined with HEI's expansion into the broadband
market will result in fourth quarter revenue growth compared to the third
quarter of this fiscal year and the fourth quarter of last fiscal year. HEI
expects fourth quarter net income in the single digit earnings per share range,
as well as significant revenue growth and improved earnings in FY2002.
- --------------------------------------------------------------------------------
HEI, Inc., and Cross Technology, Inc., a wholly owned subsidiary of HEI, Inc.,
specialize in the custom design and manufacture of high performance,
ultraminiature microelectronic devices and high-technology products
incorporating those devices. HEI and Cross contribute to their customers'
competitiveness in the hearing, medical, communications, wireless 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.
Headquarters and Microelectronics Division PO Box 5000, 1495
Steiger Lake Lane, Victoria, MN 55386
High Density Interconnect Division 610 South Rockford Drive,
Tempe, AZ 85281
Cross Technology, Inc. 1546 Lake Drive West, Chanhassen, MN
55317
- --------------------------------------------------------------------------------
FORWARD LOOKING INFORMATION
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 estimated HEI revenue and profit growth 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.