HEI, Inc. Announces First Quarter 2013 Results

HEI, Inc. Announces First Quarter 2013 Results

MINNEAPOLIS--(BUSINESS WIRE)-- HEI, Inc. (Pink Sheets: HEII) (http://www.heii.com) today announced its financial results for the first quarter 2013, which ended March 30, 2013.

Sales for the first quarter of 2013 were $12,516,000, compared to $9,065,000 for the first quarter of 2012. The Company generated a net income of $636,000 for the first quarter of 2013, compared to a net loss of ($157,000) for the first quarter of 2012.


Sales were up 38% in the first quarter 2013, compared to the first quarter 2012, as a result of increased sales in the Company's Victoria and Boulder divisions which were partially offset by decreased sales in the Company's Tempe division. Gross margins increased to 16% on a consolidated basis compared to 13% in the same prior year period as a result of the increased sales volumes. Additionally, even with the increased sales volumes, the Company reduced operating expenses in the first quarter, compared to the first quarter 2012.

"Our contracts relating to the military radio systems along with demand from our long-term customers provided for the sales growth that we saw in the first quarter. Returning to profitability was also an important step for HEI and our customers. We have strong backlogs and have expanded our engineering staff along with our sales teams to continue to support and build the momentum moving forward. We will continue to focus on new customers and new programs while satisfying and strengthening our relationships with our existing customers. As with all companies we have uncertainties, including continued government funding for some of our customers' programs, but we continue to be committed to building HEI into a strong and sustainable company," commented HEI CEO, Mark B. Thomas.

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, 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

March 30, 2013

December 29, 2012

(In thousands, except share and per share data)

ASSETS

Current assets:

Cash and cash equivalents

$

-

$

-

Accounts receivable, net

5,547

4,538

Inventories, net

5,722

5,454

Deferred income taxes

804

804

Other current assets

347

712

Total current assets

12,420

11,508

Property and equipment:

Land

216

216

Building and improvements

4,337

4,337

Fixtures and equipment

28,784

28,554

Accumulated depreciation and amortization

(27,429

)

(27,005

)

Property and equipment, net

5,908

6,102

Security deposit

230

230

Other long-term assets

191

205

Total assets

$

18,749

$

18,045

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:

Accounts payable

$

3,387

$

3,129

Accrued liabilities

1,383

1,019

Customer deposit liabilities

119

712

Current maturities of long-term liabilities

1,124

1,120

Total current liabilities

6,013

5,980

Long-term liabilities:

Deferred income taxes

804

804

Other long-term liabilities, less current maturities

2,383

2,465

Long-term debt, less current maturities

5,644

5,583

Total long-term liabilities, less current maturities

8,831

8,852

Total liabilities

14,844

14,832

Commitments and contingencies

Shareholders' equity:

Undesignated stock

-

-

Convertible preferred stock, $.05 par

2

2

Common stock, $.05 par

513

513

Additional paid-in capital

28,696

28,641

Accumulated deficit

(25,306

)

(25,943

)

Total shareholders' equity

3,905

3,213

Total liabilities and shareholders' equity

$

18,749

$

18,045

HEI, INC.

STATEMENTS OF OPERATIONS

Three Months Ended

March 30, 2013

March 31, 2012

(In thousands, except share and per share data)

Net sales

$

12,516

$

9,065

Cost of sales

10,491

7,872

Gross profit

2,025

1,193

Operating expenses:

Selling, general and administrative

1,135

1,273

Operating income (loss)

890

(80

)

Interest expense, net

(90

)

(91

)

Other income (expense), net

(150

)

14

Income (loss) before income taxes

650

(157

)

Income tax expense

14

-

Net income (loss)

$

636

$

(157

)

Income (loss) per common share:

Basic

$

0.06

$

(0.02

)

Diluted

$

0.06

$

(0.02

)

Weighted average common shares outstanding:

Basic

10,180,352

10,120,023

Diluted

10,180,352

10,120,023

Certain minor reclassifications have been made to our prior period financial information in order to conform to the current year presentation.



HEI, Inc.
Mark B. Thomas, CEO, 952-443-2500

KEYWORDS: United States North America Minnesota

INDUSTRY KEYWORDS:

The article HEI, Inc. Announces First Quarter 2013 Results originally appeared on Fool.com.

Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.