HEI Provides Business and Financial Update

Apr 19, 2001, 01:00 ET from HEI, Inc.

    MINNEAPOLIS, April 19 /PRNewswire/ --
     HEI, Inc. (Nasdaq: HEII) ( http://www.heii.com ) a leader in the design
 and manufacture of microelectronics for the hearing, medical and
 communications markets, today provided a financial update and status of
 actions taken to address current business and economic issues.
     Due to the continued general economic downturn, and specifically a
 slowdown in the hearing, RFID/Access, and electronic contract manufacturing
 markets, HEI expects revenue for its fiscal third quarter to be down 5% to 10%
 sequentially from fiscal second quarter, but 5% above third quarter a year
 ago.  The Company expects a third quarter net loss of approximately 11 cents
 per share, including expenses associated with the phase out of the Mexico
 manufacturing facility.  This facility will be completely phased out in the
 third quarter with profitable programs in strategic markets being transferred
 to other HEI locations.  The Company is taking this action to focus its
 resources as it expands its broadband and hearing businesses.  For the four
 quarters ended March 3, 2001, HEI would have earned 45 cents per share if the
 losses associated with the Mexico facility were excluded, compared to a
 reported net income of 3 cents per share including the losses associated with
 the Mexico facility.
     The Company believes that the hearing and medical markets will improve in
 the fourth quarter of 2001.  This combined with HEI's expansion into the
 broadband market will result in fourth quarter revenue growth compared to the
 third quarter of this fiscal year and the fourth quarter of last fiscal year.
 HEI expects fourth quarter net income in the single digit earnings per share
 range, as well as significant revenue growth and improved earnings in FY2002.
 
     HEI, Inc., and Cross Technology, Inc., a wholly owned subsidiary of HEI,
 Inc., specialize in the custom design and manufacture of high performance,
 ultraminiature microelectronic devices and high-technology products
 incorporating those devices.  HEI and Cross contribute to their customers'
 competitiveness in the hearing, medical, communications, wireless smart cards,
 other RF applications, and industrial markets through innovative design
 solutions and by the application of state-of-the art materials, processes and
 manufacturing capabilities.
 
     Headquarters and Microelectronics Division
      PO Box 5000, 1495 Steiger Lake Lane, Victoria, MN 55386
 
     High Density Interconnect Division
      610 South Rockford Drive, Tempe, AZ 85281
 
     Cross Technology, Inc.
      1546 Lake Drive West, Chanhassen, MN 55317
 
     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.  Statements contained in
 this press release, including the estimated HEI revenue and profit growth are
 forward looking statements.  All of such forward-looking statements involve
 risks and uncertainties including, without limitation, adverse business or
 market conditions, the ability of HEI to secure and satisfy customers, the
 availability and cost of materials from HEI's suppliers, adverse competitive
 developments, change in or cancellation of customer requirements, and other
 risks detailed from time to time in HEI's SEC filings.
 
 

SOURCE HEI, Inc.
    MINNEAPOLIS, April 19 /PRNewswire/ --
     HEI, Inc. (Nasdaq: HEII) ( http://www.heii.com ) a leader in the design
 and manufacture of microelectronics for the hearing, medical and
 communications markets, today provided a financial update and status of
 actions taken to address current business and economic issues.
     Due to the continued general economic downturn, and specifically a
 slowdown in the hearing, RFID/Access, and electronic contract manufacturing
 markets, HEI expects revenue for its fiscal third quarter to be down 5% to 10%
 sequentially from fiscal second quarter, but 5% above third quarter a year
 ago.  The Company expects a third quarter net loss of approximately 11 cents
 per share, including expenses associated with the phase out of the Mexico
 manufacturing facility.  This facility will be completely phased out in the
 third quarter with profitable programs in strategic markets being transferred
 to other HEI locations.  The Company is taking this action to focus its
 resources as it expands its broadband and hearing businesses.  For the four
 quarters ended March 3, 2001, HEI would have earned 45 cents per share if the
 losses associated with the Mexico facility were excluded, compared to a
 reported net income of 3 cents per share including the losses associated with
 the Mexico facility.
     The Company believes that the hearing and medical markets will improve in
 the fourth quarter of 2001.  This combined with HEI's expansion into the
 broadband market will result in fourth quarter revenue growth compared to the
 third quarter of this fiscal year and the fourth quarter of last fiscal year.
 HEI expects fourth quarter net income in the single digit earnings per share
 range, as well as significant revenue growth and improved earnings in FY2002.
 
     HEI, Inc., and Cross Technology, Inc., a wholly owned subsidiary of HEI,
 Inc., specialize in the custom design and manufacture of high performance,
 ultraminiature microelectronic devices and high-technology products
 incorporating those devices.  HEI and Cross contribute to their customers'
 competitiveness in the hearing, medical, communications, wireless smart cards,
 other RF applications, and industrial markets through innovative design
 solutions and by the application of state-of-the art materials, processes and
 manufacturing capabilities.
 
     Headquarters and Microelectronics Division
      PO Box 5000, 1495 Steiger Lake Lane, Victoria, MN 55386
 
     High Density Interconnect Division
      610 South Rockford Drive, Tempe, AZ 85281
 
     Cross Technology, Inc.
      1546 Lake Drive West, Chanhassen, MN 55317
 
     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.  Statements contained in
 this press release, including the estimated HEI revenue and profit growth are
 forward looking statements.  All of such forward-looking statements involve
 risks and uncertainties including, without limitation, adverse business or
 market conditions, the ability of HEI to secure and satisfy customers, the
 availability and cost of materials from HEI's suppliers, adverse competitive
 developments, change in or cancellation of customer requirements, and other
 risks detailed from time to time in HEI's SEC filings.
 
 SOURCE  HEI, Inc.