EX-99.1 3 doc2.txt EXHIBIT 99.1 NEWS RELEASE [GRAPHIC OMITTED] APA OPTICS, INC. REPORTS LOSS FOR SECOND QUARTER AND FIRST 6 MONTHS OF FISCAL 2003 Cash Position Remains Strong with $29 million On Hand Minneapolis, MN, October 29, 2002 -- APA Optics, Inc. (Nasdaq: APAT), today reported a net loss of $1,318,737, or 11 cents a share, for the second quarter of fiscal 2003, ended September 30, 2002, as compared to the loss of $1,364,499, or 11 cents a share, posted for the second quarter of its 2002 fiscal year. The decreased loss was attributable to reduced operating expenses. "Our financial results reflect the stalled economy in general, and in fiber optics communications in particular", commented Anil Jain, the president and chief executive officer. "We continue to monitor the fiber optic component marketplace but do not see a rebound in the near future, particularly for long haul applications. We also believe that the market for optical components will be highly competitive and will result in significantly lower prices, due to the entry of a large number of Asian manufacturers. We recently took steps to reduce our workforce, mainly in fiber optic component manufacturing, and lower operating expenses in an effort to preserve cash," said Jain. The Company expects to see the benefits of the latest cost cutting measures in the fiscal third quarter ending December 31, 2002. "We are modifying our business plans to focus on developing and delivering packaged solutions for fiber optic communication applications. Most of the components in these solutions will be supplied by Asian manufacturers," added Jain. APA continues to pursue opportunities in Gallium Nitride (GaN) based UV detection products and its R&D activities in the area of GaN based Hetero-junction Field Effect Transistors (HFETs) for high-speed communication, a technology with substantial market potential. "We believe our GaN based technology and our patents will be an instrumental part of APA Optics, Inc.'s future success," said Jain. For the first six months of fiscal year 2003, the Company experienced a net loss of $2,571,730, or 22 cents a share, as compared to a loss of $2,009,560, or 17 cents a share, reported for the first six months of fiscal 2002. Revenues decreased for the first six months, with $111,351 reported for fiscal 2003, as compared to $521,909 for the first six months of fiscal 2002. The weighted average shares outstanding for the second quarter of the 2003 fiscal year totaled, 11,874,957 as compared to the 11,917,465 weighted average shares outstanding during the three months ended September 30, 2001. For the six months ended September 30, 2002 the weighted average shares outstanding were 11,875,396 compared to 11,917,378 for the six months ended September 30, 2001. On October 1, 2002, the Company extended its stock repurchase plan. "We continue to believe our stock is undervalued and plan to repurchase shares to cover current and future option and warrant commitments," said Jain. Under the extension, the Company may purchase up to the greater of 500,000 shares or $2 million dollars of its common stock. As of September 30, 2002, the Company had repurchased 46,750 shares for a total of approximately $99,000. APA Optics/page two Forward-looking statements contained herein are made pursuant to the safe harbor provisions of the Private Litigation Reform Act of 1995. These statements are based upon the Company's current expectations and judgments about future developments in the Company's business. Certain important factors could have a material impact on the Company's performance, including, without limitation, delays in or increased costs of production, delays in or lower than anticipated sales of the Company's new products, the Company's ability to sell such products at a profitable price, the Company's ability to fund operations, and other factors discussed from time to time in the Company's filings with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on forward-looking statements. The Company undertakes no obligation to update such statements to reflect actual events.
FINANCIAL RESULTS Three Months Ended Six Months Ended September 30, September 30, -------------------------- -------------------------- 2002 2001 2002 2001 ------------ ------------ ------------ ------------ Revenues $ 38,900 $ 87,574 $ 111,351 $ 521,909 Costs and expenses: Cost of sales 718,944 957,316 1,476,677 1,900,168 Research and development 336,680 236,299 689,847 418,892 Selling, general and administrative 397,824 510,217 717,935 946,832 ------------ ------------ ------------ ------------ 1,453,448 1,703,832 2,884,459 3,265,892 Loss from operations (1,414,548) (1,616,258) (2,773,108) (2,743,983) Interest income 122,797 282,673 255,889 802,262 Interest expense (26,736) (30,527) (54,011) (66,452) ------------ ------------ ------------ ------------ 96,061 252,146 201,878 735,810 Loss before income taxes (1,318,487) (1,364,112) (2,571,230) (2,008,173) Income taxes 250 387 500 1,387 ------------ ------------ ------------ ------------ Net loss (1,318,737) (1,364,499) (2,571,730) (2,009,560) ------------ ------------ ------------ ------------ Net loss applicable to common shareholders $(1,318,737) $(1,364,499) $(2,571,730) $(2,009,560) ============ ============ ============ ============ Net loss per share: Basic and diluted ($0.11) ($0.11) ($0.22) ($0.17) ============ ============ ============ ============ Weighted average shares outstanding: Basic and diluted 11,874,957 11,917,465 11,875,396 11,917,378 ============ ============ ============ ============
APA Optics/page three FINANCIAL RESULTS (Continued) September 30, March 31, 2002 2002 --------------- ------------- Assets: Cash and equivalents $ 28,967,391 $ 31,606,403 Other current assets 115,211 234,276 Property, plant and equipment, net 3,593,535 3,748,004 Other assets 646,011 807,727 --------------- ------------- Total assets $ 33,322,148 $ 36,396,410 =============== ============= Liabilities: Current liabilities 2,071,086 2,426,475 Long-term liabilities 229,305 465,018 Shareholders' equity: Common stock 118,723 118,759 Additional-paid-in-capital 51,666,793 51,578,185 Accumulated deficit (20,763,759) (18,192,027) --------------- ------------- Total shareholders' equity 31,021,757 33,504,917 --------------- ------------- Total liabilities and shareholders' equity $ 33,322,148 $ 36,396,410 =============== =============
APA Optics, Inc. develops, manufactures and markets advanced products for the fiber optic network communications, optoelectronics and laser industries, including dense wavelength division multiplexing (DWDM) components, ultraviolet (UV) detectors and devices for consumer UV monitoring based on compound semiconductor technology, nitride epitaxial layers and custom optics. APA Optics, Inc. Contact Information: ------------------------------------- Bob Ringstad Chief Financial Officer ir@apaoptics.com ---------------- 763-784-4995 Anil Jain Chief Executive Officer infor@apaoptics.com ------------------- 763-784-4995