Exhibit 99.1
HEI ANNOUNCES FOURTH QUARTER AND FULL FISCAL 2005 RESULTS
-- Record revenues of $15.1 million in fourth quarter of fiscal 2005
-- Fiscal 2005 revenues increase 31% over fiscal 2004
-- Net income of $204,000 in fourth quarter
MINNEAPOLIS, Oct. 25 /PRNewswire-FirstCall/ -- HEI, Inc. (Nasdaq: HEII)
( http://www.heii.com ) today announced results for its fourth quarter and full
fiscal year, which ended August 31, 2005.
HEI achieved record revenues of $15.1 million in the fourth quarter of
fiscal 2005. This represents a 34% improvement over sales of $11.3 million
reported in the fourth quarter of fiscal 2004. The Company reported net income
of $204,000 or $0.02 per diluted share in the fourth quarter this year as
compared to a loss of $1.8 million or ($0.21) per share last year. Operating
income for the fourth quarter of fiscal 2005 was $386,000 as compared with an
operating loss of $2.2 million in the fourth quarter of fiscal 2004.
For the fiscal year ended August 31, 2005, net sales were $56.6 million, an
increase of 31% over sales of $43.3 million in fiscal 2004. The Company reported
net income for the year of $355,000 or $0.04 per diluted share as compared with
a loss of $7.0 million or ($0.90) per share for fiscal 2004.
"We are pleased to end the year on a positive note," stated Mr. Traynor,
President and CEO. "This has been an important year for HEI as we have worked
hard to grow our revenue base and improve many of our internal processes. Our
revenue growth has continued into the fourth quarter resulting in record
revenues of $15.1 million for the quarter and $56.6 million for the year.
Importantly, HEI posted positive operating income and net income for the second
consecutive quarter. We will continue to build on this positive momentum as we
head into fiscal 2006 as we work to deliver improved results for our
shareholders. I wish to thank all of our employees who have worked so hard to
return the Company to profitability," concluded Mr. Traynor.
The Company will hold a conference call to discuss the Company's operating
results and business strategies on Wednesday October 26, 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 1-800-257-7087 (outside the US, dial
303-262-2125). Specify conference reservation number 11043114.
HEI, Inc.
Consolidated Statements of Operations (Unaudited)
(In thousands, except per share data)
Three Months Ended Year Ended
----------------------- -----------------------
August 31, August 31, August 31, August 31,
2005 2004 2005 2004
---------- ---------- ---------- ----------
Net sales $ 15,068 $ 11,278 $ 56,631 $ 43,320
Cost of sales 11,877 9,821 45,047 39,197
Gross profit 3,191 1,457 11,584 4,123
Operating expenses:
Selling, general
and administrative 2,002 2,296 8,383 8,113
Research, development
and engineering 803 849 3,264 3,165
Gain on claim settlement - (300)
Investigation and
impairment costs - 508 - 1,359
Operating income (loss) 386 (2,196) 237 (8,514)
Other income (expenses) (182) 438 118 1,505
Income (loss) before income taxes 204 (1,029) 355 (7,009)
Income taxes - - - -
Net income (loss) $ 204 $ (1,758) $ 355 $ (7,009)
Deemed dividend on
Preferred Stock $ - $ - $ 1,072 $ -
Net income (loss) attributable
to common stock $ 204 $ (1,758) $ (717) $ (7,009)
Earnings (loss) Per
Common Share:
Basic and Diluted:
Net income (loss) $ 0.02 $ (0.21) $ 0.04 $ (0.90)
Deemed dividend on
Preferred Stock - (0.13) -
Net income (loss) attributable
to common stock $ 0.02 $ (0.21) $ (0.09) $ (0.90)
Weighted Average
Shares Used in
EPS Calculation
Basic: 8,432 8,310 8,382 7,745
Diluted: 9,962 8,310 8,958 7,745
HEI, Inc.
Consolidated Balance Sheets
(In thousands)
August 31, August 31,
2005 2004
(unaudited) (audited)
------------ ------------
Cash and cash equivalents $ 351 $ 200
Restricted cash - 481
Accounts receivable, net 9,278 6,770
Inventories 8,044 6,787
Other current assets 1,136 1,221
Total current assets 18,808 15,459
Net property and equipment 6,889 7,391
Other assets 1,979 2,262
Total assets $ 27,677 $ 25,112
Line of credit $ 2,563 $ 1,310
Current maturities of long-term debt 484 403
Accounts payable and accruals 8,148 10,332
Total current liabilities 11,195 12,045
Long-term debt, less current maturities 1,813 1,833
Other long-term liabilities 873 1,277
Total shareholders' equity 13,796 9,957
Total liabilities and shareholder's equity $ 27,677 $ 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 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- 10/25/2005
/CONTACT: Mack V. Traynor, CEO, or Timothy Clayton, CFO, both of HEI,
Inc., +1-952-443-2500/
/Web site: http://www.heii.com /
(HEII)