HEI, Inc. (Pink Sheets: HEII) (http://www.heii.com) today announced its financial results for the third quarter of fiscal year 2012, which ended September 29, 2012.
Sales for the third quarter were $9,882,000, compared to $9,221,000 for the third quarter of 2011. The Company generated a net loss of ($503,000) for the third quarter of 2012 compared to net income of $162,000 for the same period in 2011. Sales for the first nine months of 2012 were $28,595,000, compared to $28,215,000 for the first nine months of 2011. The Company generated a year-to-date net loss of ($1,012,000) for 2012 compared to a net income of $686,000 for the first nine months of 2011.
Sales were up 7.2% year-over-year in the third quarter as a result of increases in our Victoria operation which was partially offset by decreased sales in our other two operating divisions. Gross margins were down on a consolidated basis with Victoria gross margins improving as a result of improved efficiencies associated with the increased sales volumes while the other two operating divisions’ gross margins declined as a result of product mix changes and the lower sales levels as compared to the prior year. The net loss for the third quarter of fiscal 2012 included an increase to our reserve for inventory obsolescence of $380,000, which had no cash impact during the quarter.
“Increasing sales continues to be our focus and product demand and customer backlogs are strong in our Victoria plant, and our Tempe and Boulder divisions are working to increase sales penetration,” commented HEI CEO, Mark B. Thomas.
Also during the third quarter, Thomas Leahy resigned from the board of directors for personal reasons, and Timothy Floeder was elected to the board of directors. Mr. Leahy continues to be a significant shareholder of HEI.
| HEI, Inc. designs, develops and manufactures ultra-miniature microelectronics, substrates, systems, connectivity and software solutions for customers engaged in the medical, hearing, telecommunications, military, aerospace, and industrial markets. HEI provides its customers with a single point of contact that can take an idea from inception to a fully functional and cost effective product utilizing innovative design solutions and by the application of state-of-the-art materials, processes and manufacturing capabilities. | |
| Corporate & HEI –Victoria (Microelectronics Contract Manufacturing and ATE) | 1495 Steiger Lake Lane, Victoria, MN 55386 |
| HEI – Boulder (Design and Development, Box Build and ATE) | 4801 North 63rd Street, Boulder, CO 80301 |
| HEI – Tempe (Quick Turn and Production High Density Interconnect Flex and Rigid-Flex) | 610 South Rockford Drive, Tempe, AZ 85281 |
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 that involve substantial risks and
uncertainties. You can identify these statements by forward-looking
words such as “may,” “will,” “expect,” “anticipate,” “believe,”
“intend,” “estimate,” “continue,” and similar words. Statements
contained in this press release, including the implementation of
business strategies, growth of specific markets, improved results and
estimated HEI revenue, cash flow and profits, are forward looking
statements. All such forward-looking statements involve risks and
uncertainties including, without limitation, 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
financing agreements, adverse competitive developments, change in or
cancellation of customer requirements, collection of receivables and
outstanding debt, HEI’s ability to control fixed and variable operating
expenses, and other risks detailed in previous HEI SEC filings. Since
HEI is no longer reporting to the SEC, readers are cautioned to weigh
the potential for additional risk factors based on ongoing business
activities and the current economic conditions. The information set
forth herein should be read in light of such risks. We undertake no
obligation to update these statements to reflect ensuing events or
circumstances, or subsequent actual results.
| HEI, INC. | ||||||||
| BALANCE SHEETS | ||||||||
September 29, 2012 | December 31, 2011 | |||||||
(In thousands, except share and per share data) | ||||||||
ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | - | $ | - | ||||
| Accounts receivable, net | 5,459 | 5,489 | ||||||
| Inventories, net | 6,081 | 4,680 | ||||||
| Deferred income taxes | 447 | 447 | ||||||
| Other current assets | 814 | 253 | ||||||
| Total current assets | 12,801 | 10,869 | ||||||
| Property and equipment: | ||||||||
| Land | 216 | 216 | ||||||
| Building and improvements | 4,337 | 4,337 | ||||||
| Fixtures and equipment | 28,329 | 26,676 | ||||||
| Accumulated depreciation and amortization | (26,568 | ) | (25,788 | ) | ||||
| Property and equipment, net | 6,314 | 5,441 | ||||||
| Security deposit | 230 | 230 | ||||||
| Other long-term assets | 221 | 328 | ||||||
| Total assets | $ | 19,566 | $ | 16,868 | ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 4,177 | $ | 2,151 | ||||
| Accrued liabilities | 1,290 | 701 | ||||||
| Customer deposit liabilities | 172 | 11 | ||||||
| Current maturities of long-term liabilities | 1,116 | 927 | ||||||
| Total current liabilities | 6,755 | 3,790 | ||||||
| Long-term liabilities: | ||||||||
| Deferred income taxes | 447 | 447 | ||||||
| Other long-term liabilities, less current maturities | 2,547 | 2,443 | ||||||
| Long-term debt, less current maturities | 6,428 | 5,933 | ||||||
| Total long-term liabilities, less current maturities | 9,422 | 8,823 | ||||||
| Total liabilities | 16,177 | 12,613 | ||||||
| Commitments and contingencies | ||||||||
| Shareholders’ equity: | ||||||||
| Undesignated stock | - | - | ||||||
| Convertible preferred stock, $.05 par | 2 | 2 | ||||||
| Common stock, $.05 par | 506 | 506 | ||||||
| Additional paid-in capital | 28,579 | 28,433 | ||||||
| Accumulated deficit | (25,698 | ) | (24,686 | ) | ||||
| Total shareholders’ equity | 3,389 | 4,255 | ||||||
| Total liabilities and shareholders’ equity | $ | 19,566 | $ | 16,868 | ||||
Certain minor reclassifications have been made to our prior period financial information in order to conform to the current year presentation.
| HEI, INC. | ||||||||||||||||||||
| STATEMENTS OF OPERATIONS | ||||||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||||
September 29, 2012 | October 1, 2011 | September 29, 2012 | October 1, 2011 | |||||||||||||||||
(In thousands, except share and per share data) | ||||||||||||||||||||
| Net sales | $ | 9,882 | $ | 9,221 | $ | 28,595 | $ | 28,215 | ||||||||||||
| Cost of sales | 8,846 | 7,712 | 25,008 | 23,596 | ||||||||||||||||
| Gross profit | 1,037 | 1,509 | 3,587 | 4,619 | ||||||||||||||||
| Operating expenses: | ||||||||||||||||||||
| Selling, general and administrative | 1,337 | 1,100 | 3,876 | 3,285 | ||||||||||||||||
| Research, development and engineering | 92 | 174 | 448 | 423 | ||||||||||||||||
| Operating income (loss) | (392 | ) | 235 | (737 | ) | 910 | ||||||||||||||
| Interest expense, net | (113 | ) | (90 | ) | (289 | ) | (245 | ) | ||||||||||||
| Other income (expense), net | 3 | 17 | 17 | 20 | ||||||||||||||||
| Income (loss) before income taxes | (501 | ) | 162 | (1,009 | ) | 686 | ||||||||||||||
| Income tax expense | 2 | - | 3 | - | ||||||||||||||||
| Net income (loss) | $ | (503 | ) | $ | 162 | $ | (1,012 | ) | $ | 686 | ||||||||||
Income (loss) per common share: | ||||||||||||||||||||
| Basic | $ | (0.05 | ) | $ | 0.02 | $ | (0.10 | ) | $ | 0.07 | ||||||||||
| Diluted | $ | (0.05 | ) | $ | 0.02 | $ | (0.10 | ) | $ | 0.07 | ||||||||||
Weighted average common shares outstanding: | ||||||||||||||||||||
| Basic | 10,120,000 | 10,045,000 | 10,120,000 | 9,933,000 | ||||||||||||||||
| Diluted | 10,120,000 | 10,045,000 | 10,120,000 | 9,933,000 | ||||||||||||||||
Certain minor reclassifications have been made to our prior period financial information in order to conform to the current year presentation.
Contacts:
Mark B. Thomas, CEO, 952-443-2500
