HEI, Inc. (Pink Sheets: HEII; http://www.heii.com) today announced unaudited financial results for the second quarter of 2014, which ended June 28, 2014.
Sales in the second quarter of 2014 were $7,940,000, compared to $13,018,000 in the second quarter of 2013. The Company generated a net loss of ($429,000) in the second quarter of 2014, compared to a net income of $678,000 in the second quarter of 2013.
Sales declined 39% in the second quarter 2014, compared to the second quarter 2013, as a result of decreased sales in all three of the Company’s operating divisions.
“We are working simultaneously on two primary areas to put HEI back into profitable growth – sales expansion and operating efficiency. We are taking a targeted sales approach with both new and existing customers, and we are making operational improvements, primarily in Tempe. The governmental programs that contributed to the Victoria results throughout the past year continue to be below previous levels, and additional orders for these programs remain uncertain at this time. We continue to focus our sales efforts in our areas of expertise including medical, defense, aerospace, and radio frequency applications to grow HEI,” commented Mark Thomas, CEO.
HEI, Inc. designs, develops and manufactures ultra-miniature microelectronics, high density interconnect flexible and rigid-flex substrates, electromechanical hardware, and embedded software with complex user interface 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) | 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, results and estimated HEI revenue, orders, shipments, 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 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 Sheet (Unaudited) | |||||||||||
| (In thousands, except share and per share data) | |||||||||||
June 28, 2014 | June 29, 2013 | ||||||||||
| ASSETS | |||||||||||
| Current assets: | |||||||||||
| Accounts receivable, net | $ | 4,055 | $ | 5,621 | |||||||
| Inventories, net | 3,914 | 4,638 | |||||||||
| Other current assets | 683 | 277 | |||||||||
| Total current assets | 8,652 | 10,536 | |||||||||
| Property and equipment: | |||||||||||
| Land | 216 | 216 | |||||||||
| Building and improvements | 4,342 | 4,337 | |||||||||
| Fixtures and equipment | 31,350 | 29,447 | |||||||||
| Accumulated depreciation and amortization | (29,404 | ) | (27,863 | ) | |||||||
| Property and equipment, net | 6,504 | 6,137 | |||||||||
| Security deposit | 194 | 230 | |||||||||
| Other long-term assets | 174 | 203 | |||||||||
| Total assets | $ | 15,524 | $ | 17,106 | |||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||||||
| Current liabilities: | |||||||||||
| Revolving line of credit | $ | 2,972 | $ | 3,321 | |||||||
| Accounts payable | 3,323 | 3,267 | |||||||||
| Accrued liabilities | 783 | 1,282 | |||||||||
| Customer deposit liabilities | 28 | 9 | |||||||||
| Current maturities of long-term liabilities | 846 | 1,128 | |||||||||
| Total current liabilities | 7,952 | 9,007 | |||||||||
| Long-term liabilities: | |||||||||||
| Long-term lease obligation, less current maturities | 1,632 | 1,787 | |||||||||
| Long-term capital lease obligations, less current maturities | 997 | 512 | |||||||||
| Long-term debt, less current maturities | 825 | 1,162 | |||||||||
| Total long-term liabilities, less current maturities | 3,454 | 3,461 | |||||||||
| Total liabilities | 11,406 | 12,468 | |||||||||
| Shareholders’ equity: | |||||||||||
| Convertible preferred stock, $.05 par | 2 | 2 | |||||||||
| Common stock, $.05 par | 529 | 513 | |||||||||
| Additional paid-in capital | 28,861 | 28,751 | |||||||||
| Accumulated deficit | (25,274 | ) | (24,628 | ) | |||||||
| Total shareholders’ equity | 4,118 | 4,638 | |||||||||
| Total liabilities and shareholders’ equity | $ | 15,524 | $ | 17,106 | |||||||
Certain minor reclassifications have been made to our prior period financial information in order to conform to the current year presentation.
| HEI, INC. | ||||||||||||||||||||||
| STATEMENT OF OPERATIONS (Unaudited) | ||||||||||||||||||||||
| (In thousands, except share and per share data) | ||||||||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||||||||
| June 28, 2014 | June 29, 2013 | June 28, 2014 | June 29, 2013 | |||||||||||||||||||
| Net sales | $ | 7,940 | $ | 13,018 | $ | 13,883 | $ | 25,534 | ||||||||||||||
| Cost of sales | 7,393 | 10,847 | 13,346 | 21,338 | ||||||||||||||||||
| Gross profit | 547 | 2,171 | 537 | 4,196 | ||||||||||||||||||
| Operating expenses: | ||||||||||||||||||||||
| Selling, general and administrative | 892 | 1,163 | 1,706 | 2,298 | ||||||||||||||||||
| Operating income (loss) | (345 | ) | 1,008 | (1,169 | ) | 1,898 | ||||||||||||||||
| Interest expense, net | (75 | ) | (89 | ) | (143 | ) | (178 | ) | ||||||||||||||
| Other income (expense), net | (9 | ) | (222 | ) | (14 | ) | (372 | ) | ||||||||||||||
| Income (loss) before income taxes | (429 | ) | 697 | (1,326 | ) | 1,348 | ||||||||||||||||
| Income tax expense | - | 19 | - | 33 | ||||||||||||||||||
| Net income (loss) | $ | (429 | ) | $ | 678 | $ | (1,326 | ) | $ | 1,315 | ||||||||||||
Income (loss) per common share: | ||||||||||||||||||||||
| Basic | $ | (0.04 | ) | $ | 0.07 | $ | (0.13 | ) | $ | 0.13 | ||||||||||||
| Diluted | $ | (0.04 | ) | $ | 0.06 | $ | (0.13 | ) | $ | 0.12 | ||||||||||||
Weighted average common shares outstanding: | ||||||||||||||||||||||
| Basic | 10,522,689 | 10,276,995 | 10,479,172 | 10,272,532 | ||||||||||||||||||
| Diluted | 10,522,689 | 10,847,798 | 10,479,172 | 10,843,335 | ||||||||||||||||||
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
