mattie,
I am having problems getting any detailed information on the HEII product line. It looks like a company in transition. But, on paper it looks like the company is well managed.
I have no data on their new fiber alignment product nor on the optical products contract they won earlier in the year.
********************
HEII designs and manufactures ultraminiature microelectronic devices & technology products incorporating these devices for medical, industrial and computer markets. For the 9 months ended 6/3/00, net sales increased 32% to $29.1M. Net loss totaled $1.6M vs. income of $441K. Revenues reflect an increase in sales in the hearing aid market. Net loss reflects a decreased gross profit due to start-up costs and increased material costs.
marketguide.com
January 11, 2000
"HEI, Inc. announced that its Mexico division has received orders from six new customers, including a $2.2 million order from a large customer within the fiberoptic communications market and an order from a large customer in the computer peripheral market that is expected to result in over $2 million worth of business in the next 12 months."
marketguide.com
EPS numbers are all over the place, but the revenue numbers are increasing nicely quarter over quarter.
marketguide.com
Small institional holding, but almost no significant selling. Insider buying.
marketguide.com
" The optical switch product line, which represented a minor part of the Company's sales, was sold in August 1997. "
"HEI generally sells its products to original equipment manufacturers in the United States and abroad in accordance with supply contracts specific to certain manufacturer product programs. The Company's ten largest customers accounted for approximately 98% of net sales in fiscal 1999, 96% in fiscal 1998 and 95% in fiscal 1997 and approximately 94% and 96% of accounts receivable at August 31, 1999 and 1998, respectively. The Company's customer base is highly concentrated. In fiscal 1999, 1998 and 1997, the Company's two largest customers accounted for 78%, 73% and 82%, respectively, of net sales. "
marketguide.com
"New Technology
In June 1999, HEI obtained an exclusive, worldwide license to manufacture and market a new high-frequency chip carrier for applications in LMDS (Local Multipoint Distribution Services), ultra high-speed Internet routing, and satellite communications. This new technology provides superior radio frequency (RF) performance characteristics in a low-cost, easy-to-use package."
heii.com
"HEI completed its due diligence, which included interviews with the major customers of Cross. As stated in a previous release, HEI expects this acquisition to be accretive to its earnings for this fiscal year. It is anticipated that the combined growth rate will be in excess of 30% for fiscal year 2000, as compared to combined revenue in fiscal year "
corporate-ir.net
Last 10Q:
DSO's are up but turns are up too. Most of this is related to their hear aid business.
"Accounts receivable average days outstanding were 50 days as of June 3, 2000 compared to 44 days as of May 29, 1999 primarily due to timing of customer remittances."
"Annualized inventory turns were 8.0 for the third quarter of fiscal 2000 compared to 6.1 turns for thesame period a year ago as a result a higher level of activity"
"The gross profit margin rates for the three and nine months ended June 3, 2000 decreased to 21% and to 16%, respectively, as compared to 22% and 23% for the comparable periodslast year. This decrease primarily reflects lower margin sales for the Company's Mexico division and Cross operations,start-up costs for the Tempe, Arizona high density interconnect facility and significantly higher material costs on portions of the sales during the start-up of new programs. These situations that resulted in lower gross margins improved throughoutthe third quarter and are expected to improve further in the fourth quarter."
"Operating expenses in total 10 were 18% and 22% of net sales for the three and nine month periods, respectively, compared to 22% and 21% for the sameperiods last year."
The tax rate seems very low. I don't think it is sustainable. So the gross margin will suffer in the future when it goes back to the more standard 30 to 35 percent level.
"The estimated effective income tax rate for fiscal 2000 changed to 19% from the prior estimate of approximately 12% that was expected in the second quarter of this fiscal year."
For 10K:
"SALES. 1999 VS. 1998: Sales in fiscal 1999 increased $3,518,000, or17%, as compared to fiscal 1998. This increase was primarily in the hearing aid and communications markets. The largest customer accounted for 62% of sales, up 21% over the prior fiscal year. The business with this customer has grown steadily over the last five years, and currently the Company is producing over20 different devices for this customer for shipment to multiple locations, both domestic and international. 1998 VS. 1997: Sales in fiscal 1998 decreased $10,157,000, or 33%, ascompared to fiscal 1997. This decrease reflects the phase out during the lastquarter of fiscal 1997 of high volume production of a device for use inhigh-density disk drives. In the previous fiscal year, this disk drive program accounted for 55% of total sales. However, sales to theCompany's other market areas (hearing and medical instruments, telecommunications and industrial applications) collectively increased 60% in fiscal 1998 as compared to sales to such markets in fiscal 1997. In fiscal 1998, one large multinational customer accounted for 59% of total sales."
"DEPENDENCE ON SINGLE INDUSTRY: During the past several years, the Company hashad significant dependence on a single market. In fiscal 1999, 71% of theCompany's revenues came from sales to hearing instrument manufacturers. Inaddition, the Company has made significant sales in the medical productsindustry. Each of these industries is characterized by intense competition,relatively short product life cycles, rapid technological change, significantfluctuations in product demand, and significant pressure on vendors to reduce orminimize cost. Although the Company is attempting to reduce its dependence onany single industry, the Company does not expect this historic dependence tochange dramatically or quickly. Accordingly, the Company will likely be affectedby trends in the industries it serves.CUSTOMER CONCENTRATION: The Company's customer base is highly concentrated. Infiscal 1999, 1998 and 1997, the Company's two largest customers accounted for78%, 73% and 82%, respectively, of net sales. Although the Company is attemptingto reduce its dependence on a limited number of customers, the Company expectsthat sales to a relatively small number of original equipment manufacturers("OEMs") will continue to account for a substantial portion of net revenues forthe foreseeable future, and the loss of, or a decline in orders from, one of theCompany's key customers would have a material adverse effect on the Company'sfinancial and operating results.COMPETITION: The Company operates in a highly competitive industry and competesagainst several domestic and foreign providers of similar microelectronicsdesign and/or manufacturing services. The Company also faces competition fromthe internal operations of its current and potential OEM customers and fromoffshore contract manufacturers, which, because of their lower labor rates andother related factors, enjoy a comparative advantage over the Company withrespect to high-volume production. However, the Company can now also offersimilar advantages through its new operation in Mexico. The Company expects tocontinue to encounter competition from other electronics manufacturers that currently provide or may begin to provide contract design and manufacturing services. A number of the Company's competitors may have substantially greater manufacturing, financial, technical, marketing, and other resources than doesthe Company, and may offer a broader scope and presence of operations on aworldwide basis. Significant competitive factors in the microelectronics market includeprice, quality, design capabilites, responsiveness, testing capabilities, theability to manufacture in very high volumes and proximity to the customers finalassembly facilities. While the Company has competed favorably in the past withrespect to these factors, this is a particularly fast changing market, and therecan be no assurance that the Company will continue to do so in the future. Thetrends toward increasingly shorter product cycles and to off-shore production are expected to result in more intense competition as each new customer program is generally open to bidding by the Company's competitors, increasinglyincluding those with off-shore facilities and capabilities. Further, the Companyis often one of two or more suppliers on any particular customer requirement andis therefore subject to continuing competition on existing programs. In order to remain competitive in any of its markets, the Company must continually provide timely and technologically advanced design capabilities and manufacturing services, ensure the quality of its products, and compete favorably with respect to turnaround and price. If the Company were to fail to compete favorably with respect to the principal competitive factors in its markets served, theCompany's business and operating results would be adversely affected."
I wonder how serious they are about the optical division given that they sold their optoelectronics switch assembly product line in August 1997.
"SALE OF PRODUCT LINES. In August 1997, the Company sold its optoelectronic switch assembly product line. Through this transaction, the buyers acquiredcertain assets including manufacturing equipment and related inventory, productlicenses and assumed all warranties. In connection with this sale, the Companyreceived cash payments for the assets and an agreement for additional amounts tobe paid monthly over the subsequent two years. The Company anticipates nosubstantial effect of the sale of these product lines on future operatingresults."
Last quarterly earnings release:
"New customer sales accounted for over 40% of total year-to-date sales, including sales associated with Cross Technology. We expect continued revenue growth and profit improvement in the fourth quarter,''
biz.yahoo.com |
