8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of report (Date of earliest event reported): January 19, 2005

HEI, Inc.

(Exact Name of Registrant as Specified in Charter)

Minnesota	0-10078	41-0944876
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

PO Box 5000, 1495 Steiger Lake Lane, Victoria, Minnesota 55386

(Address of Principal Executive Offices, Including Zip Code)

Registrant’s telephone number, including area code: (952) 443-2500

N/A

(Former Name or Former Address, if Changed Since Last Report)

     Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligations of the registrant under any of the following provisions (see General Instruction A.2.):

     ¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

     ¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

     ¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

     ¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS

	Item 3.01 Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing.
	Item 4.01 Changes in Registrant’s Certifying Accountant.
	Item 9.01 Financial Statements and Exhibits.
SIGNATURES
Exhibit Index
Press Release

Item 3.01 Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing.

     On January 19, 2005, HEI, Inc. (the “Company”) received a letter from the NASDAQ Stock Market indicating that although the Company evidenced compliance with the filing requirement set forth in NASDAQ Marketplace Rule 4310(c)(14) relating to the filing of its Annual Report on Form 10-K for the fiscal year ended August 31, 2004 (“2004 Form 10-K”), it had come to the attention of the NASDAQ Stock Market that the Company is not in compliance with the NASDAQ requirements for continued listing set forth in NASDAQ Marketplace Rule 4450(a)(3) due to the fact that the Company reported stockholders’ equity of $9,957,000 in the 2004 Form 10-K, which is less than the minimum $10,000,000 stockholders’ equity requirement. As a result, the NASDAQ Stock Market formally notified the Company that such additional issue would be considered at the Company’s oral hearing before the NASDAQ Listing Qualifications Panel (the “Panel”) scheduled for Thursday, January 20, 2005. The Company had previously requested such oral hearing in connection with the receipt of the delisting notification relating to the late filing of its 2004 Form 10-K.

     On January 20, 2005, the Company received a second letter from the NASDAQ Stock Market indicating that it had come to the attention of the NASDAQ Stock Market that the Company is not in compliance with the NASDAQ requirements for continued listing set forth in NASDAQ Marketplace Rule 4310(c)(14) due to the Company’s failure to timely file its Quarterly Report on Form 10-Q for the first quarter ended November 27, 2004 (“2005 First Quarter Form 10-Q”), with the Securities and Exchange Commission by the January 18, 2005, deadline. The NASDAQ Stock Market formally notified the Company that such additional issue would be considered at the Company’s oral hearing before the Panel scheduled for Thursday, January 20, 2005.

     As a result of the Company’s noncompliance with these NASDAQ requirements for continued listing, the Company’s common stock is subject to delisting from the NASDAQ National Market. On January 20, 2005, the Company participated in an oral hearing before the Panel to appeal the delisting of its common stock. The Company’s common stock will remain listed on the NASDAQ National Market pending the outcome of the appeal under the symbol HEIIE. While the Company (i) is working diligently to complete the preparation of, and to file its 2005 First Quarter Form 10-Q as promptly as possible; and (ii) believes that it has regained compliance with the stockholders’ equity requirement based on its operating results from its first quarter ended November 27, 2004, and expects to demonstrate such compliance when it files the 2005 First Quarter Form 10-Q; the Company cannot provide assurances that the Panel will grant the Company’s request for continued listing.

     On January 25, 2005, the Company issued a press release regarding the receipt of the letters from the NASDAQ Stock Market described in this Item 3.01. The full text of the press release is attached as Exhibit 99 to this Current Report on Form 8-K.

Item 4.01 Changes in Registrant’s Certifying Accountant.

     On January 25, 2005, the Audit Committee of the Board of Directors of the Company engaged Virchow, Krause & Company, LLP (“Virchow Krause”), to audit its consolidated financial statements for the fiscal year ending August 31, 2005. During the Company’s two most recent fiscal years, the Company (i) did not engage Virchow Krause to act as either the principal accountant to audit the Company’s financial statements or as an independent accountant to audit a significant subsidiary of the Company, (ii) did not consult with Virchow Krause on the application of accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion that might be rendered on the Company’s financial statements within the meaning of Item 304(a)(2)(i) of Regulation S-K; and (iii) did not consult with Virchow Krause on any matter that was either the subject of a disagreement, as that term is defined in Item 304(a)(1)(iv) of Regulation S-K and the related instruction to Item 304 of Regulation S-K, or a reportable event, as that term is defined in Item 304(a)(1)(v) of Regulation S-K.

     On January 25, 2005, the Company issued a press release regarding the engagement of Virchow Krause described in this Item 4.01. The full text of the press release is attached as Exhibit 99 to this Current Report on Form 8-K.

Item 9.01 Financial Statements and Exhibits.

(c)   Exhibits.

The following exhibit relating to Items 3.01 and 4.01 is filed as a part of this Current Report on Form 8-K.

Item No.	Description
99	Press Release dated January 25, 2005.

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	HEI, INC.
Date: January 25, 2005	By /s/ Mack V. Traynor, III
	Mack V. Traynor, III
	Chief Executive Officer and President (Duly Authorized Officer)

Exhibit Index

Item No.	Description
99	Press Release dated January 25, 2005.

EX-99

Exhibit 99

NEWS RELEASE

1495 Steiger Lake Lane
Victoria, Minnesota 55386 USA
952-443-2500

CONTACTS: For Immediate Release

Mack V. Traynor III, CEO
Timothy Clayton, CFO

HEI APPOINTS NEW AUDITOR AND REPORTS ON NASDAQ LISTING STATUS

MINNEAPOLIS, Jan. 25, 2005 /PRNewswire-FirstCall/ — HEI, Inc. (Nasdaq: HEIIE — News), (http://www.heii.com ) announced today that its Audit Committee has formally engaged Virchow, Krause & Company, LLP, as the Company’s independent registered accounting firm for its fiscal year ending August 31, 2005. Virchow Krause is the 13^th largest public accounting firm in the United States, specializing in manufacturing clients based in the Midwest. The Company also announced that on January 20, 2005, it attended its hearing before a NASDAQ Listing Qualifications Panel (the “Panel”).

As previously announced, on December 16, 2004, the Company received a notice from the NASDAQ Stock Market indicating that the Company’s common stock was subject to delisting from the NASDAQ National Market because of the Company’s failure to timely file its Annual Report on Form 10-K for the fiscal year ended August 31, 2004 (its “2004 Form 10-K”), with the United States Securities and Exchange Commission (“SEC”). The Company appealed such delisting to the Panel, thus staying the delisting action pending the issuance of the Panel’s decision.

The Company filed its 2004 Form 10-K with the SEC on January 13, 2005. However, as also previously announced, the Company was unable to file its Quarterly Report on Form 10-Q for the quarterly period ended November 27, 2004 (its “2005 First Quarter Form 10-Q”), with the SEC by the extension deadline of January 18, 2005, as was required by NASDAQ Marketplace Rule 4310(c)(14). In addition, the 2004 Form 10-K evidenced stockholders’ equity of $9,957,000, which is below the stockholders’ equity requirement of $10,000,000 for continued listing on the NASDAQ National Market, as set forth in NASDAQ Marketplace Rule 4450(a)(3). As a result, by letters dated January 19 and 20, 2005, the NASDAQ Stock Market formally notified the Company that these additional issues would be considered by the Panel at the Company’s hearing on January 20, 2005.

The Company believes that it has regained compliance with the stockholders’ equity requirement based on its operating results from its first quarter ended November 27, 2004, and expects to demonstrate such compliance when it files the 2005 First Quarter Form 10-Q. Such operating results are, however, subject to review by the Company’s new independent registered accounting firm, Virchow Krause.

As previously announced, the Company’s relationship with its former independent registered accounting firm, KPMG, LLP, ceased upon the completion of the audit of the Company’s consolidated

financial statements for the fiscal year ended August 31, 2004, and the filing of the 2004 Form 10-K. Accordingly, the Company requested that the Panel grant it an extension of time to engage its new auditor, to afford the new auditor the time necessary time to review the 2005 First Quarter Form 10-Q and to allow the Company to make the filing. On January 24, 2005, Virchow Krause began its necessary auditor transition activities and commenced review procedures relating to the 2005 First Quarter Form 10-Q. The Company will announce in a subsequent press release its expected timing for the filing of the 2005 First Quarter Form 10-Q and the scheduling of a conference call to discuss those results.

The Company’s common stock will remain listed on the NASDAQ National Market pending the Panel’s decision. There can be no assurance, however, that the Panel will grant the Company’s request. In the event that the Panel determines not to grant the Company’s request for continued listing, the Company may be delisted from the NASDAQ National Market.

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 RFID industries. 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.

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 RFID industries. 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 HEI’s expectations regarding compliance with the NASDAQ stockholders’ equity requirements, continued listing of HEI’s common stock on the NASDAQ National Market, the content of HEI’s Quarterly Report on Form 10-Q and the timing of the filing of HEI’s Quarterly Report on Form 10-Q, 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, HEI’s ability to satisfy financial or other obligations or covenants set forth in its banking agreements, adverse competitive developments, change in or cancellation of customer requirements, the integration of the Advanced Medical Division, collection of outstanding debt, the ability of HEI to convince the NASDAQ Listing Qualifications Panel to grant its requests, and other risks detailed from time to time in HEI’s SEC filings, including, but not limited to, those risks set forth in HEI’s Annual Report on Form 10-K for the fiscal year ended August 31, 2004. HEI undertakes no obligation to update these statements to reflect ensuing events or circumstances, or subsequent actual results.