Exhibit 99.1
HEI ANNOUNCES SECOND QUARTER FISCAL 2005 RESULTS
PR Newswire -- April 11, 2005
-- Revenues grow 37% over second quarter of fiscal 2004
-- Year-to-date revenues increase 33% over fiscal 2004
-- Quarterly operating results improve by $2.5 million from 2004
MINNEAPOLIS, April 11 /PRNewswire-FirstCall/ -- HEI, Inc. (Nasdaq: HEII) (
http://www.heii.com ) today announced results for its second quarter of fiscal
2005, which ended February 26, 2005.
Net sales for the second quarter of fiscal 2005 were $13.7 million, a 37%
improvement over sales of $10.0 million reported in the second quarter of fiscal
2004. The Company reported a net loss of $537,000 or ($0.06) per share in the
second quarter this year as compared to a loss of $2,969,000 or ($0.41) per
share last year.
For the six-month period ended February 26, 2005, net sales were $27.8 million,
an increase of 33% over the first six months of fiscal 2004. The Company's net
loss for the first six months of fiscal 2005 shrank to $122,000 or ($0.01) per
share from a loss of $4.2 million or ($0.59) per share for the first six months
of fiscal 2004.
"I am pleased to report that our initiatives over the past year are continuing
to pay dividends by way of significantly improved operating metrics, said Mack
Traynor, Chief Executive Officer and President. "Increased sales levels are
obviously the driver of our improved results and we are very pleased with the
37% increase in quarterly sales over last year. We could not deliver the
products without the improvements in our manufacturing capabilities which have
also resulted in an improvement in our gross margins from 5% last year to 21%
this year. As a result, our operating results improved substantially, cutting
our operating loss for the quarter by $2.5 million."
Traynor added, "While we are not satisfied with reporting even a small operating
loss for the quarter, the results are as we expected given the unusual matters
that we had to address over the past three or four months. These issues included
the completion of our fiscal 2004 audit and filing of the Form 10-K, meetings
with NASDAQ about our listing status, several system integration activities and
other internal control improvements. All told, we incurred approximately
$500,000 of costs that were over and above the norm in the second quarter. I am
very pleased that these issues have been satisfactorily resolved and we can now
focus all of our energies on the continued growth of the Company."
"Over the past few months I have met with a number of customers who are very
pleased with the high standards of quality and service provided by HEI. This
level of commitment to our customers has provided us with additional
opportunities to increase our business with these customers and to obtain
business with new customers. We will continue to pursue these opportunities
aggressively. As evidenced by our strong increases in sales, these efforts have
proven successful over the past six months. However, this growth has also
required a significant increase in our working capital requirements and has
precipitated the need for additional manufacturing equipment in order to meet
this demand. In order to continue to execute on our strategic plan, we believe
that additional capital will be necessary and we are currently evaluating the
best means by which to satisfy these growth oriented capital requirements. We
look forward to actively pursuing the new opportunities that lie ahead,"
concluded Mr. Traynor.
The Company will hold a conference call to discuss the Company's operating
results and business strategies on Monday, April 11, 2005 at 4:00 p.m. Eastern
Time (3:00 p.m. Central Time). This call is being web cast and is also
accessible via telephone. To access the listen-only web cast, visit
http://www.actioncast.acttel.com and enter Event ID 28309. The conference call
can be accessed via telephone by dialing 1-800-218-0713 (outside the US, dial
303-262-2131). Specify conference reservation number 11027978.
HEI, Inc.
Consolidated Statements of Operations (Unaudited)
(In thousands, except per share data)
Three Months Ended Six Months Ended
---------------------------- ----------------------------
February 26, February 28, February 26, February 28,
2005 2004 2005 2004
------------ ------------ ------------ ------------
Net sales $ 13,736 $ 9,995 $ 27,808 $ 20,911
Cost of sales 10,869 9,544 21,984 19,396
Gross profit 2,867 451 5,824 1,515
Operating expenses:
Selling, general and
administrative 2,344 2,061 4,387 3,818
Research, development
and engineering 934 857 1,771 1,579
Costs related to
investigation - 504 - 757
Operating loss (411) (2,971) (334) (4,639)
Other income (expenses): (126) 2 212 417
Loss before income taxes (537) (2,969) (122) (4,222)
Income tax benefit - - - -
Net loss $ (537) $ (2,969) $ (122) $ (4,222)
Net loss per common
share(basic and
diluted): $ (0.06) $ (0.41) $ (0.01) $ (0.59)
Weighted average common
shares outstanding
(basic and diluted): 8,357 7,232 8,357 7,140
HEI, Inc.
Consolidated Balance Sheets
(In thousands)
February 26, August 31,
2005 2004
------------ ------------
(unaudited) (audited)
Cash and cash equivalents $ 69 $ 200
Restricted cash - 481
Accounts receivable, net 8,816 6,770
Inventories 7,932 6,787
Other current assets 1,298 1,221
Total current assets 18,115 15,459
Net property and equipment 6,933 7,391
Other assets 2,237 2,262
Total assets $ 27,285 $ 25,112
Line of credit $ 3,539 $ 1,310
Current maturities of long-term debt 368 403
Accounts payable and accruals 10,173 10,332
Total current liabilities 14,080 12,045
Long-term debt, less current maturities 1,672 1,833
Other long-term liabilities 1,470 1,277
Total shareholders' equity 10,063 9,957
Total liabilities and shareholders' equity $ 27,285 $ 25,112
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 1546 Lake Drive West,
Card Division 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- 04/11/2005
/CONTACT: Mack V. Traynor, CEO, or Timothy Clayton, CFO, +1-952-443-2500,
both of HEI/
/Web site: http://www.heii.com