H E I INC # (OTC:HEII)

Sales for the first quarter of 2013 were $12,516,000, compared to $9,065,000 for the first quarter of 2012.

The Company generated a net income of $636,000 for the first quarter of 2013, compared to a net loss of ($157,000) for the first quarter of 2012.

2013 first quarter EPS was  $0.06 vs. a loss of $0.02 compared to the 2012 comparable period.

Sales were up 38% in the first quarter 2013, compared to the first quarter 2012, as a result of increased sales in the Company’s Victoria and Boulder divisions which were partially offset by decreased sales in the Company’s Tempe division. Gross margins increased to 16% on a consolidated basis compared to 13% in the same prior year period as a result of the increased sales volumes. Additionally, even with the increased sales volumes, the Company reduced operating expenses in the first quarter, compared to the first quarter 2012.

"Our contracts relating to the military radio systems along with demand from our long-term customers provided for the sales growth that we saw in the first quarter. Returning to profitability was also an important step for HEI and our customers. We have strong backlogs and have expanded our engineering staff along with our sales teams to continue to support and build the momentum moving forward. We will continue to focus on new customers and new programs while satisfying and strengthening our relationships with our existing customers. As with all companies we have uncertainties, including continued government funding for some of our customers’ programs, but we continue to be committed to building HEI into a strong and sustainable company," commented HEI CEO, Mark B. Thomas.