Heartland Technology Announces Second Quarter Financial Results
Heartland Technology Announces Second Quarter Financial Results
CHICAGO, Aug. 15 Edwin Jacobson, President and CEO of
Heartland Technology, Inc. (Amex: HTI) announced the Company's financial
results for the second quarter and six months ended June 30, 2001. Net sales
totaled $1,804,000 in the second quarter of 2001 compared to $5,201,000 in the
second quarter 2000. Net sales for the six months ended June 30, 2001 were
$4,757,000 compared to $12,611,000 for the six months ended June 30, 2000.
The decreases were caused primarily by lower sales of memory modules at the
Company's PG Design subsidiary.
Net loss for the second quarter of 2001 totaled ($5,261,000) or ($3.15)
per share compared to net income in the second quarter 2000 of $1,966,000 or
$1.18 per share. The net loss for the six months ended June 30, 2001 was
($6,018,000) or ($3.60) per share compared to a loss for the six months ended
June 30, 2000 of ($1,136,000) or ($0.68) per share. The 2001 loss was
primarily the result of operating losses at PG Design and recognition of loss
on the sale of the assets of PG Design to Trilogy Electronics, LLC in the
second quarter. Results for the first six months of 2000 reflected an
allocation of profits of $4,235,000 to the Class B Interest in Heartland
Partners owned by the Company.
Progress at Zecal
HTI owns, through a subsidiary, 26% of Zecal Technology, LLC. Zecal is a
manufacturer of Z-strate(R) circuit boards. Z-strate(R) is a proprietary
process for plating pure copper circuits on a ceramic substrate. The
Z-strate(R) process achieves a very strong bond between the circuit and the
substrate. The resulting product features very fine lines and spaces, and
excellent thermal and RF properties.
In May of this year, James Havener became President and CEO of Zecal. Mr.
Havener has an engineering degree and has an extensive background in the
electronics industry in the area of management, sales marketing and new
business development. Mr. Havener's professional history includes four years
with Sheldahl, Inc. as Vice President of their Micro Products Unit and
30 years at 3M Company managing several 3M divisions.
Mr. Havener is leading a repositioning of Zecal in the electronics
packaging market, moving Zecal from assembly and concentrating on producing
substrates in partnership with electronics assemblers. This strategic shift
is beginning to bear fruit. Work with major power amplifier producers for
cell phones has produced many prototypes and the beginning of a production
start up for a major cell phone producer. There is also progress being made
in the opto-electronic market for switches and aligners. Other areas showing
promising results are barometric sensors, electronic testing units and small
display screen technologies.
Sale of PG Design Electronics
PG Design's memory module business experienced the loss of its largest
customer. Following a restructuring to reduce overhead expenses and efforts
to replace the lost business, management decided it was not in the best
interests of the company to continue to support PG's operating losses. PG's
assets were sold to Trilogy Electronics, LLC. HTI will receive $300,000 in
2001, and up to $2,550,000 of additional payments over the next six years
based on the performance of the new company. Trilogy also assumed over
$3,000,000 of PG liabilities.
Solder Station-One Adds Four New Product Lines
Solder Station-One's performance continued to reflect industry conditions
in the second quarter. Solder Station has added several promising new
processes to its product lines. New offerings at Solder Station include
electroless gold for wire bonding applications, and immersion silver plating,
a coating approved by such major companies as Intel, Lucent and Hewlett
Packard. Solder also is offering epoxy via fill for high technology
applications. Solder Station will be the only service company in North
America offering this solution to via hole contamination. Solder has also
added automated conformal coating and potting equipment. These processes and
coatings are applied to protect environmentally sensitive circuit assemblies.
Heartland Technology, Inc.
Condensed Consolidated Balance Sheets
June 30, 2001 and December 31, 2000
Amounts in Thousands
June 30, 2001 December 31, 2000
ASSETS (Unaudited)
Current asset 3,232 5,119
Fixed assets 1,367 3,500
Other assets 12,170 17,925
TOTAL ASSETS 16,769 26,544
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities 16,471 19,341
Long term liabilities 1,794 2,982
Stockholders' equity (1,496) 4,221
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY 16,769 26,544
Following is a summary of financial results for Heartland Technology, Inc.
Heartland Technology, Inc.
Condensed Statements of Operations
Amounts in Thousands Except Per Share Amounts
(Unaudited)
Three Months Ended June 30 Six Months Ended June 30
2001 2000 2001 2000
Sales 1,804 5,201 4,757 12,611
Cost of goods sold 2,099 5,091 4,852 11,876
Gross profit (295) 110 (95) 735
Other income 187 4,046 1,246 3,131
Other expenses 5,162 2,187 7,165 4,964
Loss before taxes (5,270) 1,969 (6,014) (1,098)
Income tax (benefit)/
expense (9) 3 4 38
Net income (loss) (5,261) 1,966 (6,018) (1,136)
-- -- -- 509
Basic and diluted loss
per share 1,671,238
shares outstanding (3.15) $1.18 $(3.60) $(0.68)
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 subsidiary 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 Partnership L.P.
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