EX-99.1 2 hi5220ex991.txt EXHIBIT 99.1 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 /