HEI, Inc. (Pink Sheets:HEII) (http://www.heii.com) today announced its financial results for the third quarter of fiscal year 2013, which ended September 28, 2013.
Sales for the third quarter were $10,659,000, compared to $9,882,000 for the third quarter of 2012. The Company generated net income of $70,000 for the third quarter of 2013 compared to net loss of ($503,000) for the same period in 2012. Sales for the first nine months of 2013 were $36,193,000, compared to $28,595,000 for the first nine months of 2012. The Company generated net income of $1,385,000 for the first nine months ended September 28, 2013 compared to net loss of ($1,012,000) for the first nine months of 2012.
Sales were up 7.9% year-over-year in the third quarter as a result of increases in our Victoria and Tempe operations, partially offset by a slight decrease in our Boulder operation. Gross margins improved to 13% of sales on a consolidated basis in the third quarter 2013 compared to 10% in the third quarter 2012 as a result of Victoria and Tempe gross margins improving due to cost reductions and improved efficiencies associated with the increased sales volumes, partially offset by a decrease in the Boulder operation due to product mix changes and the lower sales levels as compared to the prior year.
"The volume increases, along with our inventory management improvements, have significantly improved HEI's cash flow. Our primary focus will continue to be increasing our sales pipelines and improving our operations and systems throughout the company. Our current contracts with government contractors are nearing completion in our Victoria operation. As noted previously, we continue to be guardedly optimistic that our participation in the programs with government contractors will continue with limited interruption and will be part of our continued growth," 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 (Contract Design, Development, and Medical Box Build) | 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 | ||||||||||
(In thousands, except share and per share data) | ||||||||||
September 28, 2013 | December 29, 2012 | |||||||||
(Unaudited) | (Audited) | |||||||||
ASSETS | ||||||||||
Current assets: | ||||||||||
Cash and cash equivalents | $ | - | $ | - | ||||||
Accounts receivable, net | 5,864 | 4,538 | ||||||||
Inventories, net | 3,632 | 5,454 | ||||||||
Deferred income taxes | 804 | 804 | ||||||||
Other current assets | 294 | 712 | ||||||||
Total current assets | 10,594 | 11,508 | ||||||||
Property and equipment: | ||||||||||
Land | 216 | 216 | ||||||||
Building and improvements | 4,336 | 4,337 | ||||||||
Fixtures and equipment | 29,651 | 28,554 | ||||||||
Accumulated depreciation and amortization | (28,287 | ) | (27,005 | ) | ||||||
Property and equipment, net | 5,916 | 6,102 | ||||||||
Security deposit | 230 | 230 | ||||||||
Other long-term assets | 189 | 205 | ||||||||
Total assets | $ | 16,929 | $ | 18,045 | ||||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||||
Current liabilities: | ||||||||||
Accounts payable | $ | 2,018 | $ | 3,129 | ||||||
Accrued liabilities | 1,581 | 1,019 | ||||||||
Customer deposit liabilities | 11 | 712 | ||||||||
Current maturities of long-term liabilities | 1,132 | 1,120 | ||||||||
Total current liabilities | 4,742 | 5,980 | ||||||||
Long-term liabilities: | ||||||||||
Deferred income taxes | 804 | 804 | ||||||||
Other long-term liabilities, less current maturities | 2,215 | 2,465 | ||||||||
Long-term debt, less current maturities | 4,406 | 5,583 | ||||||||
Total long-term liabilities, less current maturities | 7,425 | 8,852 | ||||||||
Total liabilities | 12,167 | 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 | 28,805 | 28,641 | ||||||||
Accumulated deficit | (24,558 | ) | (25,943 | ) | ||||||
Total shareholders' equity | 4,762 | 3,213 | ||||||||
Total liabilities and shareholders' equity | $ | 16,929 | $ | 18,045 | ||||||
HEI, INC. | ||||||||||||||||||||
STATEMENTS OF OPERATIONS | ||||||||||||||||||||
(In thousands, except share and per share data) | ||||||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||||
September 28, 2013 | September 29, 2012 | September 28, 2013 | September 29, 2012 | |||||||||||||||||
(Unaudited) | (Audited) | (Unaudited) | (Audited) | |||||||||||||||||
Net sales | $ | 10,659 | $ | 9,882 | $ | 36,193 | $ | 28,595 | ||||||||||||
Cost of sales | 9,291 | 8,938 | 30,629 | 25,404 | ||||||||||||||||
Gross profit | 1,368 | 944 | 5,564 | 3,191 | ||||||||||||||||
13 | % | 10 | % | 15 | % | 11 | % | |||||||||||||
Operating expenses: | ||||||||||||||||||||
Selling, general and administrative | 1,060 | 1,336 | 3,357 | 3,928 | ||||||||||||||||
Operating income (loss) | 308 | (392 | ) | 2,207 | (737 | ) | ||||||||||||||
Interest expense, net | (81 | ) | (113 | ) | (259 | ) | (289 | ) | ||||||||||||
Other income (expense), net | (132 | ) | 3 | (504 | ) | 17 | ||||||||||||||
Income (loss) before income taxes | 96 | (501 | ) | 1,444 | (1,009 | ) | ||||||||||||||
Income tax expense | 26 | 1 | 59 | 3 | ||||||||||||||||
Net income (loss) | $ | 70 | $ | (503 | ) | $ | 1,385 | $ | (1,012 | ) | ||||||||||
Income (loss) per common share: | ||||||||||||||||||||
Basic | $ | 0.01 | $ | (0.05 | ) | $ | 0.13 | $ | (0.10 | ) | ||||||||||
Diluted | $ | 0.01 | $ | (0.05 | ) | $ | 0.13 | $ | (0.10 | ) | ||||||||||
Weighted average common shares outstanding: | ||||||||||||||||||||
Basic | 10,478,886 | 10,120,000 | 10,341,316 | 10,120,000 | ||||||||||||||||
Diluted | 11,035,147 | 10,120,000 | 10,897,578 | 10,120,000 | ||||||||||||||||
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