Heartland Technology, Inc. Report Results for 2000

Apr 03, 2001, 01:00 ET from Heartland Technology, Inc.

    CHICAGO, April 3 /PRNewswire/ -- Edwin Jacobson, President and CEO of
 Heartland Technology, Inc. (Amex:   HTI), reported today a loss of ($4,335,000)
 or ($2.60) per share of common stock, for the year ended December 31, 2000
 compared to a loss of ($10,113,000) or ($6.05) for the year ended December 31,
 1999.  Revenues were $22,619,000 for the year.
     "Our 2000 loss is primarily attributable to the following factors:
 1) continued losses at Zecal; and 2) decline in orders from PG Design's two
 largest customers," stated Jacobson.  "We are taking a number of steps to
 respond to these developments.  The Company brought in an equity investor to
 support the development of Zecal during 2000.  We are taking aggressive
 actions at PG Design to deal with the loss of business from NEC, PG Design
 Electronics' largest customer.  At the same time, Solder Station-One performed
 well in 2000, achieving record results, and is introducing new products which
 have promise for 2001."
 
     Zecal
     During 2000, the Company determined that it could not continue to support
 Zecal's continuing operating losses and need for investment.  Therefore, we
 formed a 50/50 joint venture with LZ Partners.  LZ contributed $4 million in
 cash and HTI contributed the assets of Zecal.  This relieved us of the need to
 provide additional cash to Zecal, while allowing us to maintain an interest in
 the future of the technology.  As a result of subsequent cash calls, the
 Company's percentage ownership has been reduced.  At the end of 2000 it was
 42%.  At the end of March, LZ funded a $1.45 million cash call to pay off an
 equipment loan.  This reduced our percentage ownership to 38%.
     Trends in electronics design continue to indicate a positive future for
 Zecal's technology.  Increasing miniaturization of electronic components will,
 we believe, drive increasing numbers of manufacturers to Z-strate(R) because
 of its thermal management and fine pitch capabilities.  In addition, as parts
 become smaller, Z-strate(R) becomes increasingly cost competitive.
     Zecal has targeted Power Amplifier, Optical Components, RF Modules and
 Chip Scale Packages as the optimal target markets for its products.  To
 realize the potential in these markets, Zecal has developed a direct sales
 force consisting of a vice president, four domestic regional sales persons,
 and a European sales representative.
 
     PG Design
     PG Design suffered the loss of its largest customer, NEC Electronics, in
 2000.  NEC's memory products division was merged into a new company called
 Elphida, which has not used PG as a vendor.  PG has further reduced its
 overhead by $5.5 million on an annualized basis.  PG continues to have
 opportunities in its memory, printer demonstration "POD" devices and contract
 manufacturing businesses.  However, the company faces significant challenges
 in the near term.  We are working on alternative strategies to try and solve
 the problems at PG Design.
 
     Solder Station-One
     Solder Station-One experienced strong growth in its revenues from 1999 to
 2000.  While we expect that Solder Station's 2001 results will be impacted
 from the current slowdown in the electronics manufacturing industry, Solder is
 introducing three new processes which should generate additional revenues.
 Solder Station is introducing an epoxy via plug process.  It will be the only
 company in North America offering this process, which is a solution to via
 hole contamination.  Solder Station will add immersion silver plating
 capability, a coating approved by major companies including Intel, Lucent and
 Hewlett Packard.  Solder Station will also provide automated conformal
 coating, which is becoming more important as printed circuit boards are
 miniaturized.
     Management's discussion and analysis of financial condition and results of
 operations in this press release contain certain statements which may
 constitute "forward-looking statements" within the meaning of the Private
 Securities Litigation Reform Act of 1995.  Such forward-looking statements
 involve known and unknown risks, uncertainties and other important factors
 that could cause the actual results, performance or achievement of results to
 differ materially from any future results, performance, or achievements
 expressed or implied by such forward-looking statements.
     Heartland Technology, Inc., primarily through its subsidiaries PG Design
 Electronics, Inc. and Solder Station-One, Inc. and its ownership interest in
 Zecal Technology, LLC, designs and manufactures electronics assemblies
 primarily for computer and computer printer manufacturers; manufactures
 circuit boards using patented Z-strate(R) technology primarily for
 telecommunications, industrial and automotive manufacturers; and provides
 services to printed circuit board manufacturers.
     The Company's strategy is to focus on high margin segments of the
 electronics manufacturing and printed circuit board industries.  Heartland
 Technology also holds general partner interests in real estate partnerships
 including and related to Heartland Partners L.P.
 
 
                           Heartland Technology, Inc.
                      Condensed Consolidated Balance Sheet
                       As of December 2000, 1999 and 1998
                              Amounts in thousands
 
 
                                                      2000              1999
     ASSETS
 
     Current assets                                  $5,119            $7,319
 
     Fixed assets                                     3,500             7,313
 
     Other assets                                    17,925            16,079
 
     TOTAL ASSETS                                   $26,544           $30,711
 
     LIABILITIES AND STOCKHOLDER'S EQUITY
 
     Current Liabilities                            $19,341           $19,292
 
     Long term liabilities                            2,982             4,110
 
     Stockholder's equity                             4,221             7,309
 
     TOTAL LIABILITIES AND STOCKHOLDER'S
      EQUITY                                        $26,544           $30,711
 
 
     The following is a summary of Financial results for Heartland Technology,
     Inc.
 
                           Heartland Technology, Inc.
                       Condensed Statement of Operations
              For the years ended December 31, 2000, 1999 and 1998
                              Amounts in thousands
                            Except per share amounts
 
 
                                                2000        1999        1998
 
     Sales                                    $22,619     $35,158     $27,668
 
     Cost of goods sold                        19,118      29,875      20,861
 
     Gross profit                               3,501       5,283       6,807
 
     Other income/expense                      (7,902)    (15,045)     (9,524)
 
     (Loss)/income before taxes
      and extraordinary item                   (4,401)     (9,762)     (2,717)
 
     Income tax (benefit)/expense                 (66)       (158)       (580)
 
     Income/(loss) before extraordinary
      item                                    $(4,335)    $(9,604)    $(2,137)
 
     Extraordinary loss on debt financing          --        (509)         --
 
     Net income/(loss)                         (4,335)    (10,113)     (2,137)
 
     Basic and diluted income (loss) per
      share before extraordinary item           (2.60)      (5.75)      (1.28)
 
     Extraordinary loss on debt financing          --       (0.30)         --
 
     Basic and diluted income (loss) per
      share 1,671,238 shares outstanding        (2.60)      (6.05)      (1.28)
 
 

SOURCE Heartland Technology, Inc.
    CHICAGO, April 3 /PRNewswire/ -- Edwin Jacobson, President and CEO of
 Heartland Technology, Inc. (Amex:   HTI), reported today a loss of ($4,335,000)
 or ($2.60) per share of common stock, for the year ended December 31, 2000
 compared to a loss of ($10,113,000) or ($6.05) for the year ended December 31,
 1999.  Revenues were $22,619,000 for the year.
     "Our 2000 loss is primarily attributable to the following factors:
 1) continued losses at Zecal; and 2) decline in orders from PG Design's two
 largest customers," stated Jacobson.  "We are taking a number of steps to
 respond to these developments.  The Company brought in an equity investor to
 support the development of Zecal during 2000.  We are taking aggressive
 actions at PG Design to deal with the loss of business from NEC, PG Design
 Electronics' largest customer.  At the same time, Solder Station-One performed
 well in 2000, achieving record results, and is introducing new products which
 have promise for 2001."
 
     Zecal
     During 2000, the Company determined that it could not continue to support
 Zecal's continuing operating losses and need for investment.  Therefore, we
 formed a 50/50 joint venture with LZ Partners.  LZ contributed $4 million in
 cash and HTI contributed the assets of Zecal.  This relieved us of the need to
 provide additional cash to Zecal, while allowing us to maintain an interest in
 the future of the technology.  As a result of subsequent cash calls, the
 Company's percentage ownership has been reduced.  At the end of 2000 it was
 42%.  At the end of March, LZ funded a $1.45 million cash call to pay off an
 equipment loan.  This reduced our percentage ownership to 38%.
     Trends in electronics design continue to indicate a positive future for
 Zecal's technology.  Increasing miniaturization of electronic components will,
 we believe, drive increasing numbers of manufacturers to Z-strate(R) because
 of its thermal management and fine pitch capabilities.  In addition, as parts
 become smaller, Z-strate(R) becomes increasingly cost competitive.
     Zecal has targeted Power Amplifier, Optical Components, RF Modules and
 Chip Scale Packages as the optimal target markets for its products.  To
 realize the potential in these markets, Zecal has developed a direct sales
 force consisting of a vice president, four domestic regional sales persons,
 and a European sales representative.
 
     PG Design
     PG Design suffered the loss of its largest customer, NEC Electronics, in
 2000.  NEC's memory products division was merged into a new company called
 Elphida, which has not used PG as a vendor.  PG has further reduced its
 overhead by $5.5 million on an annualized basis.  PG continues to have
 opportunities in its memory, printer demonstration "POD" devices and contract
 manufacturing businesses.  However, the company faces significant challenges
 in the near term.  We are working on alternative strategies to try and solve
 the problems at PG Design.
 
     Solder Station-One
     Solder Station-One experienced strong growth in its revenues from 1999 to
 2000.  While we expect that Solder Station's 2001 results will be impacted
 from the current slowdown in the electronics manufacturing industry, Solder is
 introducing three new processes which should generate additional revenues.
 Solder Station is introducing an epoxy via plug process.  It will be the only
 company in North America offering this process, which is a solution to via
 hole contamination.  Solder Station will add immersion silver plating
 capability, a coating approved by major companies including Intel, Lucent and
 Hewlett Packard.  Solder Station will also provide automated conformal
 coating, which is becoming more important as printed circuit boards are
 miniaturized.
     Management's discussion and analysis of financial condition and results of
 operations in this press release contain certain statements which may
 constitute "forward-looking statements" within the meaning of the Private
 Securities Litigation Reform Act of 1995.  Such forward-looking statements
 involve known and unknown risks, uncertainties and other important factors
 that could cause the actual results, performance or achievement of results to
 differ materially from any future results, performance, or achievements
 expressed or implied by such forward-looking statements.
     Heartland Technology, Inc., primarily through its subsidiaries PG Design
 Electronics, Inc. and Solder Station-One, Inc. and its ownership interest in
 Zecal Technology, LLC, designs and manufactures electronics assemblies
 primarily for computer and computer printer manufacturers; manufactures
 circuit boards using patented Z-strate(R) technology primarily for
 telecommunications, industrial and automotive manufacturers; and provides
 services to printed circuit board manufacturers.
     The Company's strategy is to focus on high margin segments of the
 electronics manufacturing and printed circuit board industries.  Heartland
 Technology also holds general partner interests in real estate partnerships
 including and related to Heartland Partners L.P.
 
 
                           Heartland Technology, Inc.
                      Condensed Consolidated Balance Sheet
                       As of December 2000, 1999 and 1998
                              Amounts in thousands
 
 
                                                      2000              1999
     ASSETS
 
     Current assets                                  $5,119            $7,319
 
     Fixed assets                                     3,500             7,313
 
     Other assets                                    17,925            16,079
 
     TOTAL ASSETS                                   $26,544           $30,711
 
     LIABILITIES AND STOCKHOLDER'S EQUITY
 
     Current Liabilities                            $19,341           $19,292
 
     Long term liabilities                            2,982             4,110
 
     Stockholder's equity                             4,221             7,309
 
     TOTAL LIABILITIES AND STOCKHOLDER'S
      EQUITY                                        $26,544           $30,711
 
 
     The following is a summary of Financial results for Heartland Technology,
     Inc.
 
                           Heartland Technology, Inc.
                       Condensed Statement of Operations
              For the years ended December 31, 2000, 1999 and 1998
                              Amounts in thousands
                            Except per share amounts
 
 
                                                2000        1999        1998
 
     Sales                                    $22,619     $35,158     $27,668
 
     Cost of goods sold                        19,118      29,875      20,861
 
     Gross profit                               3,501       5,283       6,807
 
     Other income/expense                      (7,902)    (15,045)     (9,524)
 
     (Loss)/income before taxes
      and extraordinary item                   (4,401)     (9,762)     (2,717)
 
     Income tax (benefit)/expense                 (66)       (158)       (580)
 
     Income/(loss) before extraordinary
      item                                    $(4,335)    $(9,604)    $(2,137)
 
     Extraordinary loss on debt financing          --        (509)         --
 
     Net income/(loss)                         (4,335)    (10,113)     (2,137)
 
     Basic and diluted income (loss) per
      share before extraordinary item           (2.60)      (5.75)      (1.28)
 
     Extraordinary loss on debt financing          --       (0.30)         --
 
     Basic and diluted income (loss) per
      share 1,671,238 shares outstanding        (2.60)      (6.05)      (1.28)
 
 SOURCE  Heartland Technology, Inc.