HEI, Inc. Announces Sale of RFID Divis...( MINNEAPOLIS Aug. 31 /- HEI Inc. (...),Health

MINNEAPOLIS, Aug. 31 /PRNewswire-FirstCall/ -- HEI, Inc. (Nasdaq: HEII) (http://www.heii.com) announced today that it has entered into an agreement to sell substantially all of the assets of its RFID division to Smartrac Technology US, Inc., a wholly-owned subsidiary of Dutch based Smartrac N.V. The transaction is structured as a sale of substantially all the assets of the RFID division, including inventory, receivables, customer contracts and customer lists, and the assumption of substantially all of the liabilities. The purchase price to be paid at closing is $3.0 million cash and the parties expect to close the transaction prior to the end of the HEI's 2007 fiscal year end on September 1, 2007. As a result of this transaction, HEI expects to recognize a gain from the sale of assets in the 4th quarter of approximately $1.5 million, prior to any employee obligations, severance and other transaction-related costs. HEI intends to use the sale proceeds to pay down existing debt obligations.

HEI, Inc. designs, develops and manufactures microelectronics, subsystems, systems, connectivity and software solutions for OEMs engaged for the medical equipment and medical device, hearing, communications, and industrial markets. HEI provides its customers with a single point of contact that can take an idea from inception to a fully functional, cost effective and manufacturability product utilizing innovative design solutions and by the application of state-of-the-art materials, processes and manufacturing capabilities.

Headquarters & Microelectronics Division PO Box 5000, 1495

Steiger Lake Lane,

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