Exhibit 99.1
HEI ANNOUNCES SECOND QUARTER FISCAL 2006 RESULTS
MINNEAPOLIS, March 23 /PRNewswire-FirstCall/ -- HEI, Inc. (Nasdaq: HEII)
( http://www.heii.com ) today announced results for its second quarter of fiscal
2006, which ended February 25, 2006.
Net sales for the second quarter of fiscal 2006 were $11.7 million, a
15% decrease from sales of $13.7 million reported in the second quarter of
fiscal 2005. The Company reported a net loss of $1,688,000 or ($0.18) per share
in the second quarter this year as compared to a loss of $537,000 or ($0.06) per
share last year.
For the six-month period ended February 25, 2006, net sales were $25.5
million, a decrease of 9% over the first six months of fiscal 2005. The
Company's net loss for the first six months of fiscal 2006 was $2.3 million or
($0.25) per share versus a net loss of $122,000 or ($0.01) per share for the
first six months of fiscal 2005.
"The decrease in revenues in the second quarter is primarily
attributable to a decrease in end user demand from certain customers, capacity
limitations at our flex facility in Tempe and delays in the FDA approval process
for certain customers and other program delays that affected our Advanced
Medical Operations," stated Mr. Mack Traynor, President and Chief Executive
Officer. "We have been working diligently to reverse this downturn through
expanded sales efforts and by increasing the capacity at our Tempe facility.
Looking forward, we see the potential for a substantial amount of business for
flexible substrate products including flex based microelectronics assembly
business. We continue to believe that we can achieve the lower end of our
revised revenue target for Fiscal 2006 of $58-60 million," continued Mr.
Traynor.
The Company will hold a conference call to discuss the Company's
operating results and business strategies on Friday March 24, 2006 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 32938. The conference call
can be accessed via telephone by dialing 1-800-240-4186 (outside the US, dial
303-275-2170). Specify conference reservation number 11056916.
HEI, Inc.
Consolidated Statements of Operations (Unaudited)
(In thousands, except per share data)
Three Months Ended Six Months Ended
----------------------------- -----------------------------
February 25, February 26, February 25, February 26,
2006 2005 2006 2005
------------- ------------- ------------- -------------
Net sales $ 11,718 $ 13,736 $ 25,505 $ 27,808
Cost of sales 9,972 10,869 21,035 21,984
Gross profit 1,746 2,867 4,470 5,824
Operating expenses:
Selling, general and administrative 2,350 2,344 4,513 4,387
Research, development and engineering 984 934 2,077 1,771
Operating loss (1,588) (411) (2,120) (334)
Other income (expenses): (100) (126) (198) 212
Loss before income taxes (1,688) (537) (2,318) (122)
Income tax benefit -- -- -- --
Net loss $ (1,688) $ (537) $ (2,318) $ (122)
Net loss per common share(basic and diluted): $ (0.18) $ (0.06) $ (0.25) $ (0.01)
Weighted average common shares outstanding
(basic and diluted): 9,480 8,357 9,440 8,357
HEI, Inc.
Consolidated Balance Sheets
(In thousands)
February 25, August 31,
2006 2005
------------ ------------
(unaudited) (audited)
Cash and cash equivalents $ 160 $ 351
Accounts receivable, net 7,379 9,278
Inventories 8,142 8,044
Other current assets 662 2,486
Total current assets 16,343 20,159
Net property and equipment 6,499 6,889
Other assets 987 629
Total assets $ 23,829 $ 27,677
Line of credit $ 1,400 $ 2,563
Current maturities of long-term debt 545 484
Accounts payable and accruals 7,172 8,148
Total current liabilities 9,117 11,195
Long-term debt, less current maturities 1,706 1,813
Other long-term liabilities 919 873
Total shareholders' equity 12,087 13,796
Total liabilities and shareholders' equity $ 23,829 $ 27,677
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. Such statements in this press
release include statements regarding the implementation of business strategies,
growth of specific markets, potential sales and revenue figures 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 receivables, 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- 03/23/2006
/CONTACT: Mack V. Traynor, CEO, or Timothy Clayton, CFO, both of
HEI, Inc., +1-952-443-2500/
/Web site: http://www.heii.com /