Exhibit 99.1
HEI ANNOUNCES FIRST QUARTER FISCAL 2006 RESULTS
MINNEAPOLIS, Jan. 5 /PRNewswire-FirstCall/ -- HEI, Inc. (Nasdaq: HEII)
( http://www.heii.com ) today announced results for its first quarter of
fiscal 2006, which ended November 26, 2005.
Net sales for the first quarter of fiscal 2006 were $13.8 million, a 2%
decrease from sales of $14.1 million reported in the first quarter of fiscal
2005. The Company reported net loss of $630,000 or $0.07 per share in the first
quarter this year as compared to net income of $415,000 or $0.05 per share last
year. The first quarter of fiscal 2005 included $481,000 of litigation
recoveries.
"Our revenue for the first quarter of Fiscal 2006 was $1.0 million below our
expectations due primarily to a temporary parts shortage for one RFID product
and production capacity issues at our Tempe facility," said Mack Traynor, Chief
Executive Officer and President. "We have seen a significant increase in the
demand for our flex based products over the past year and we believe that the
addition of new equipment, which we expect to be on-line in February, will
substantially increase our production capabilities in this area," continued Mr.
Traynor.
"We previously indicated that we would spend additional amounts in Fiscal
2006 to improve our manufacturing processes and to enhance our marketing
capabilities. This is an important investment for the long term growth of the
Company," Traynor added. "It should be noted however that while our operating
expenses increased approximately $370,000 over the first quarter of fiscal 2005,
approximately $115,000 of this increase relates to the new requirement to record
an expense related to the value of stock options," Traynor continued.
"Overall, while we are disappointed in the top line results for the quarter,
we were pleased that we were able to sustain our profit margins and that our net
income for the quarter was only slightly below our internal expectations,"
concluded Mr. Traynor.
The Company will hold a conference call to discuss the Company's operating
results and business strategies on Thursday January 5, 2006 at 4:00 p.m. Eastern
Time (3:00 p.m. Central Time). The conference call can be accessed via telephone
by dialing 1-800-240-7305 (outside the US, dial 303-262-2130). Specify
conference reservation number 11050158. 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 26, November 27,
2005 2004
------------- -------------
Net sales $ 13,787 $ 14,071
Cost of sales 11,063 11,115
Gross profit 2,724 2,956
Operating expenses 3,256 2,879
Operating income (loss) (532) 77
Other income (expenses) (98) 338
Income (loss) before income taxes (630) 415
Income taxes - -
Net income (loss) $ (630) $ 415
Net income (loss) per common share
Basic $ (0.07) $ 0.05
Diluted $ (0.07) $ 0.05
Weighted average common shares outstanding
Basic 9,400 8,357
Diluted 9,400 8,425
HEI, Inc.
Consolidated Balance Sheets
(In thousands)
November 26, August 31,
2005 2005
------------- -------------
(unaudited) (audited)
Cash and cash equivalents $ 826 $ 351
Accounts receivable, net 8,228 9,278
Inventories 7,797 8,044
Net property and equipment 6,538 6,889
Total assets 25,029 27,677
Line of credit 1,143 2,563
Current maturities of long-term debt 500 484
Accounts payable 3,354 4,019
Long-term debt, less current maturities 1,771 1,813
Total shareholders' equity 13,617 13,796
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, and operational expectations. 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, collection of outstanding debt, 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- 01/05/2006
/CONTACT: Mack V. Traynor, CEO, or Timothy Clayton, CFO, both of HEI,
Inc., +1-952-443-2500/
/Web site: http://www.heii.com /