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