Net sales for the year were
"We continue to make progress in each of our three operating divisions.
We are proud of the hard work and dedication of our employees and we are
excited about the strong relationships that we are forging with our existing
and new customers. Our turnaround efforts are far from complete, but we
believe that the past year will become the foundation from which we will build
a stronger and growing HEI. We continue to invest in operational improvements
and we are very focused on our sales process and activities as we work to
expand our customer base and revenues. Our focus on speed, responsiveness and
uncompromising quality are the keys to our business philosophy," commented
HEI also announced that it will change its fiscal year end to the Saturday
closest to
HEI, Inc. designs, develops and manufactures ultra-miniature microelectronics, substrates, integrated systems and software solutions for customers engaged in the medical, hearing, telecommunications, 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.
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
Our website is: http://www.heii.com. The information on our website is not incorporated by reference into this press release.
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 the estimated HEI revenue, cash flow
and profits, are forward looking statements. All of 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, our ability to satisfy financial or other obligations or covenants
set forth in our 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. We undertake no obligation to update these
statements to reflect ensuing events or circumstances, or subsequent actual
results. See the risk factor section in our annual report on Form 10K for year
ended
HEI, INC. CONSOLIDATED BALANCE SHEETS (UNAUDITED) August 30, September 1, 2008 2007 (In thousands, except share and per share data) ASSETS Current assets: Cash and cash equivalents $7 $177 Accounts receivable, net of allowance for doubtful accounts of $106 and $106, respectively 6,173 4,449 Inventories, net 4,099 3,260 Deferred income taxes 528 528 Other current assets 524 321 Total current assets 11,331 8,735 Property and equipment: Land 216 216 Building and improvements 4,327 4,302 Fixtures and equipment 22,765 21,829 Accumulated depreciation (21,828) (20,456) Net property and equipment 5,480 5,891 Security deposit 527 526 Other long-term assets 455 550 Total assets $17,793 $15,702 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Checks issued in excess of cash in bank $553 $191 Current maturities of long-term debt 668 848 Accounts payable 2,379 3,215 Customer deposit liabilities 892 31 Accrued liabilities 1,945 1,462 Total current liabilities 6,437 5,747 Deferred income taxes 528 528 Other long-term liabilities, less current maturities 1,841 1,717 Long-term debt, less current maturities 4,622 4,350 Total other long-term liabilities, less current maturities 6,991 6,595 Total liabilities 13,428 12,342 Shareholders' equity: Undesignated stock; 5,000,000 shares authorized; none issued - - Convertible preferred stock, $.05 par; 167,000 shares authorized; 32,000 shares issued and outstanding; liquidation preference at $26 per share (total liquidation preference $832,000) 2 2 Common stock, $.05 par; 20,000,000 and 20,000,000 shares authorized; 10,289,000 and 9,570,000 shares issued and 9,630,000 and 9,543,000 outstanding 482 478 Paid-in capital 27,903 27,763 Accumulated deficit (24,022) (24,883) Total shareholders' equity 4,365 3,360 Total liabilities and shareholders' equity $17,793 $15,702 HEI, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) Fiscal Year Ended August 30, September 1, September 2, 2008 2007 2006 (In thousands, except share and per share data) Net sales $41,963 $38,384 $49,061 Cost of sales 33,697 36,817 41,223 Gross profit 8,266 1,567 7,838 Operating expenses: Selling, general and administrative 5,613 5,653 8,429 Research, development and engineering 1,290 2,330 4,001 Operating loss 1,363 (6,416) (4,592) Interest expense (656) (1,312) (776) Other income (expense), net 154 540 (34) Loss from continuing operations before income taxes 861 (7,188) (5,402) Income tax provision (benefit) - - - Loss from continuing operations 861 (7,188) (5,402) Income (loss) from discontinued operations - (217) (655) Gain on sale of discontinued operations - 1,748 - Net income (loss) $861 $(5,657) $(6,057) Income (loss) per common share - basic and diluted: Continuing operations $0.09 $(0.75) $(0.57) Discontinued operations - 0.16 (0.07) Net income (loss) $0.09 $(0.59) $(0.64) Weighted average common shares outstanding: Basic and Diluted 9,556,000 9,522,000 9,469,000 HEI, INC. CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (UNAUDITED) Convertible Common Preferred Stock Stock Convertible Shares Common Shares Preferred Outstanding Stock Outstanding Stock (In thousands, except share data) Balance August 31, 2005 9,379,000 $469 32,000 $2 Net loss - - - - Payments on officers loans - - - - Stock based compensation expense - - - - Issuance of common stock to landlord recognized as long-term asset 100,000 5 - - Issuance of common shares under stock benefit plans and option plans 25,000 1 - - Balance September 2, 2006 9,504,000 475 32,000 2 Net loss - - - - Payments on former director loan - - - - Write-off of former director loan - - - - Stock based compensation expense - - - - Issuance of common shares under stock benefit plans and option plans 39,000 3 - - Balance September 1, 2007 9,543,000 478 32,000 2 Net income - - - - Stock based compensation expense - - - - Issuance of common shares under stock benefit plans and option plans 87,000 4 - - Balance August 30, 2008 9,630,000 $482 32,000 $2 Related Total Additional Party- Share- Paid-In Accumulated Notes Holders' Capital Deficit Receivable Equity (In thousands, except share data) Balance August 31, 2005 $26,701 $(13,169) $(207) $13,796 Net loss - (6,057) - (6,057) Payments on officers loans - - 139 139 Stock based compensation expense 503 - - 503 Issuance of common stock to landlord recognized as long-term asset 331 - - 336 Issuance of common shares under stock benefit plans and option plans 46 - - 47 Balance September 2, 2006 27,581 (19,226) (68) 8,764 Net loss - (5,657) - (5,657) Payments on former director loan - - 51 51 Write-off of former director loan - - 17 17 Stock based compensation expense 185 - - 185 Issuance of common shares under stock benefit plans and option plans (3) - - - Balance September 1, 2007 27,763 (24,883) - 3,360 Net income - 861 - 861 Stock based compensation expense 144 - - 144 Issuance of common shares under stock benefit plans and option plans (4) - - - Balance August 30, 2008 $27,903 $(24,022) $- $4,365 HEI, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) Fiscal Year Ended August 30, September 1, September 2, 2008 2007 2006 (In thousands, except share and per share data) Cash flow from operating activities: Net income (loss) $861 $(5,657) $(6,057) Depreciation and amortization 1,555 1,989 2,473 Adjustments to reconcile net income (loss) to cash flow from operating activities: Accounts receivable allowance (recovery) - (18) (33) (Gain) loss on disposal of property and equipment and other - 4 49 Gain on sale of discontinued operations - (1,748) - Write off of former director loan - 17 - Stock based compensation expense 144 185 503 Changes in operating assets and liabilities: Accounts receivable (1,724) 4,211 106 Inventories (839) 3,108 1,044 Other current assets (197) (25) 820 Accounts payable (836) (199) (284) Customer Deposit Liability 861 - - Accrued liabilities 607 (569) (1,269) Net cash flow provided by (used in) operating activities 432 1,298 (2,648) Cash flow from investing activities: Additions to property and equipment (1,056) (451) (955) Proceeds from the sale of assets - 177 96 Additions to patents - (10) (22) Security deposit - 24 1,030 Proceeds from sale of discontinued operations - 2,953 - Net cash flow provided by (used in) investing activities (1,056) 2,693 149 Cash flow from financing activities: Checks written in excess of cash in bank 362 191 - Issuance of common stock under stock plans - - 47 Officer/former director note repayment - 51 139 Payment of debt issuance costs - (118) - Repayment of long-term debt (445) (1,121) (749) Proceeds from long-term debt 537 2,457 - Net borrowings (repayments) on line of credit - (5,948) 3,385 Net cash flow provided by (used in) financing activities 454 (4,488) 2,822 Net increase (decrease) in cash and cash equivalents (170) (497) 323 Cash and cash equivalents, beginning of year 177 674 351 Cash and cash equivalents, end of year $7 $177 $674 Supplemental disclosures of cash flow information: Interest paid $615 $1,269 $799
SOURCE HEI, Inc.