Exhibit 99.1
HEI ANNOUNCES FIRST QUARTER FISCAL 2005 RESULTS
-- Revenues grow 29% over first quarter of fiscal 2004
-- Operations return to profitability
-- Nasdaq continued listing requirements satisfied
MINNEAPOLIS, Feb. 3 /PRNewswire-FirstCall/ -- HEI, Inc. (Nasdaq: HEIIE)
( http://www.heii.com ) today announced results for its first quarter of
fiscal 2005, which ended November 27, 2004.
Net sales for the first quarter of fiscal 2005 were $14.1 million, a 29%
improvement over sales of $10.9 million reported in the first quarter of
fiscal 2004. The Company reported net income of $415,000 or $0.05 per share
in the first quarter this year as compared to a loss of $1,253,000 or ($0.18)
per share last year.
"We are extremely pleased to be able to report to our shareholders that
our efforts over the past two years are beginning to show positive results,"
said Mack Traynor, Chief Executive Officer and President. "While I am very
happy with the growth in our sales levels, I am particularly pleased that the
changes in our manufacturing processes and procedures have enabled us to more
efficiently manufacture and ship more products in the quarter. This has
resulted in a substantial improvement in our gross profit margins from 10% in
the first quarter last year to 21% in the first quarter this year. As a
result, we are able to report an operating profit for the quarter."
Traynor added, "We continue to work diligently to build on these positive
developments. In addition to the operational improvements, we have taken a
number of actions over the past several months to strengthen our balance sheet
and financial position. We ended the quarter with $300,000 of cash and
$2.7 million outstanding on our expanded credit facility. As we previously
disclosed, in January our credit agreement was amended to increase our
borrowing capacity from $4.0 million to $5.0 million, subject to availability
based on accounts receivable."
Traynor continued, "The Company will be filing its Form 10-Q for the
quarter ended November 27, 2004 later today. We are currently awaiting the
decision from our January 20, 2005 hearing before a Nasdaq Listing
Qualifications Panel, and we believe that the filing of the Form 10-Q will
demonstrate our compliance with all requirements for continued listing on The
Nasdaq National Market." The Company plans to make a further announcement
upon receipt of the Panel's decision, which will include the expected date for
removal of the "E" from the Company's trading symbol.
"The results we achieved in the first quarter represent only one step in
our long-term plan for the continued growth and profitability of HEI. I want
to thank all of our employees for all their hard work over the past two years
to get us to this point. I also want to thank our customers, vendors and
shareholders for their continued support," concluded Mr. Traynor.
The Company will hold a conference call to discuss the Company's operating
results and business strategies on Thursday, February 3, 2005 at 4:00 p.m.
Eastern Time (3:00 p.m. Central Time). This call is being web-cast and can be
accessed via the HEI web site at http://www.heii.com . The call will be
recorded and be available after the call at this same location on the web
page.
HEI, Inc.
Consolidated Statements of Operations (Unaudited)
(In thousands, except per share amounts)
Three Months Ended
-----------------------------
November 27, November 29,
2004 2003
------------- -------------
Net sales $ 14,071 $ 10,894
Cost of sales 11,115 9,821
Gross profit 2,956 1,073
Operating expenses 2,879 2,732
Operating income (loss) 77 (1,659)
Other income (expenses) 338 406
Income (loss) before income taxes 415 (1,253)
Income taxes - -
Net income (loss) $ 415 $ (1,253)
Net income (loss) per common share
Basic $ 0.05 $ (0.18)
Diluted $ 0.05 $ (0.18)
Weighted average common shares outstanding
Basic 8,357 7,046
Diluted 8,425 7,046
HEI, Inc.
Consolidated Balance Sheets
(In thousands)
November 27, August 31,
2004 2004
------------- -------------
(unaudited) (audited)
Cash and cash equivalents $ 304 $ 200
Restricted cash - 481
Accounts receivable, net 8,246 6,770
Inventories 7,595 6,787
Net property and equipment 7,125 7,391
Total assets 26,307 25,112
Line of credit 2,687 1,310
Current maturities of long-term debt 356 403
Accounts payable 5,944 5,663
Long-term debt, less current maturities 1,777 1,833
Total shareholders' equity 10,392 9,957
HEI, Inc. designs, develops and manufactures microelectronics, subsystems,
systems, connectivity and software solutions for OEMs engaged in the medical
equipment and medical device, hearing, communications, and industrial markets.
HEI provides its customers with a single point of contact that can take an
idea from inception to a fully functional, cost effective and
manufacturability product utilizing innovative design solutions and by the
application of state-of-the-art materials, processes and manufacturing
capabilities.
Headquarters & Microelectronics Division PO Box 5000, 1495 Steiger Lake
Lane, Victoria, MN 55386
-Advanced Medical Division 4801 North 63rd Street, Boulder
CO 80301
-High Density Interconnect Division 610 South Rockford Drive,
Tempe, AZ 85281
RF Identification and Smart Card Division 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 implementation of business strategies,
growth of specific markets, improved results and the estimated HEI revenue,
cash flow and profits, HEI's expectations regarding continued listing of HEI's
common stock on Nasdaq, are forward looking statements. All of such forward-
looking statements involve risks and uncertainties including, without
limitation, continuing adverse business and market conditions, the ability of
HEI to secure and satisfy customers, the availability and cost of materials
from HEI's suppliers, our ability to satisfy financial or other obligations or
covenants set forth in our banking agreements, adverse competitive
developments, change in or cancellation of customer requirements, the
integration of the Advanced Medical Division, collection of outstanding debt,
HEI's ability to succeed on the merits and defend against litigation, and
other risks detailed from time to time in HEI's SEC filings. We undertake no
obligation to update these statements to reflect ensuing events or
circumstances, or subsequent actual results.
SOURCE HEI, Inc.
-0- 02/03/2005
/CONTACT: Mack V. Traynor, CEO, or Timothy Clayton, CFO, both of HEI,
Inc., +1-952-443-2500/
/Web site: http://www.heii.com /
_