Exhibit 99.1
HEI ANNOUNCES THIRD QUARTER FISCAL 2006 RESULTS
MINNEAPOLIS, June 22 /PRNewswire-FirstCall/ -- HEI, Inc. (Nasdaq: HEII -
http://www.heii.com) today announced results for its third quarter of fiscal
2006, which ended May 27, 2006.
Net sales for the third quarter of fiscal 2006 were $13.2 million, a 4%
decrease from sales of $13.7 million reported in the third quarter of fiscal
2005. The Company reported a net loss of $1,111,000 or ($0.11) per share in the
third quarter this year as compared to net income of $273,000 or $0.03 per share
last year. Fiscal 2005 results included a claim settlement gain of $300,000.
For the nine-month period ended May 27, 2006, net sales were $38.7 million,
a decrease of 7% from the first nine months of fiscal 2005. The Company's net
loss for the first nine months of fiscal 2006 was $3.4 million or ($0.36) per
share versus a net income of $151,000 or $0.02 per share for the first nine
months of fiscal 2005.
"Revenues increased 12% from the second quarter of fiscal 2006 as our
capacity expansion actions in our Tempe flex operation began to flow through to
production. In the quarter, we saw nearly a 50% increase in the output of this
unit," stated Mack Traynor, President and CEO. "We sustained a revenue shortfall
in our AMO business due to a drop in design and development services in the
quarter, primarily attributable to one customer. This not only impacted our
revenue for the quarter but also adversely affected our gross profit margins. We
are working actively to replace this revenue and we expect to have customer
commitments for approximately $2.3 million of new business in place shortly. We
believe that approximately $1.0 million of this business will fall into our
fourth quarter. However, given our year to date revenues, we expect that
revenues for the full year will be approximately $53.0 to $54.0 million,"
concluded Mr. Traynor.
The Company will hold a conference call to discuss the Company's operating
results and business strategies on Thursday June 22 at 10:00 a.m. Eastern Time
(9:00 a.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 34390. The conference call
can be accessed via telephone by dialing 1-800-240-5318 (outside the US, dial
303-262-2131). Specify conference reservation number 11064346.
HEI, Inc.
Consolidated Statements of Operations (Unaudited)
(In thousands, except per share data)
Three Months Ended Nine Months Ended
------------------------ ------------------------
May 27, May 28, May 27, May 28,
2006 2005 2006 2005
---------- ---------- ---------- ----------
Net sales $ 13,219 $ 13,755 $ 38,724 $ 41,563
Cost of sales 10,781 11,185 31,816 33,170
Gross profit 2,439 2,570 6,908 8,393
Operating expenses:
Selling, general and
administrative 2,147 1,995 6,761 6,381
Research, development
and engineering 1,063 690 3,140 2,462
Gain on claim settlement - (300) - (300)
Operating income (loss) (872) 185 (2,991) (150)
Interest expense and other (239) 88 (442) 301
Income (loss) before
income taxes (1,111) 273 (3,433) 151
Income taxes - - - -
Net income (loss) $ (1,111) $ 273 $ (3,433) $ 151
Deemed dividend on
Preferred Stock - $ 1,072 - $ 1,072
Net loss attributable
to common stock $ (1,111) $ (799) $ (3,433) $ (921)
Earnings (loss) Per
Common Share:
Basic and Diluted:
Net Income (loss) $ (0.12) $ 0.03 $ (0.36) $ 0.02
Deemed dividend on
Preferred Stock (0.13) (0.13)
Net loss attributable
to common stock $ (0.12) $ (0.10) $ (0.36) $ (0.11)
Weighted Average Shares
Used in EPS Calculation
Basic: 9,491 8,381 9,457 8,365
Diluted: 9,491 8,381 9,457 8,365
HEI, Inc.
Consolidated Balance Sheets
(In thousands)
May 27, August 31,
2006 2005
------------ ------------
(unaudited) (audited)
Cash and cash equivalents $ 174 $ 351
Accounts receivable, net 8,047 9,278
Inventories 7,822 8,044
Other current assets 811 2,486
Total current assets 16,854 20,159
Net property and equipment 8,087 6,889
Other assets 1,061 629
Total assets $ 26,001 $ 27,677
Line of credit $ 2,420 $ 2,563
Current maturities of long-term debt 1,052 484
Accounts payable and accruals 7,276 8,148
Total current liabilities 10,748 11,195
Long-term debt, less current maturities 3,003 1,813
Other long-term liabilities 972 873
Total shareholders' equity 11,278 13,796
Total liabilities and
shareholders' equity $ 26,001 $ 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- 06/22/2006
/CONTACT: Mack V. Traynor, CEO, or Timothy Clayton, CFO, both of HEI,
Inc., +1-952-443-2500/
/Web site: http://www.heii.com
http://www.actioncast.acttel.com /
(HEII)