EXHIBIT 99.1 NEWS RELEASE APA OPTICS, INC. REPORTS LOSS FOR THIRD QUARTER AND FIRST NINE MONTHS OF FISCAL 2003 Cash Position Remains Strong with $27.7 million On Hand Minneapolis, MN, February 14, 2003 -- APA Optics, Inc. (NASDAQ: APAT), today reported a net loss of $1,151,494, or 10 cents a share, for the third quarter of fiscal 2003, ended December 31, 2002, as compared to the loss of $1,422,002, or 12 cents a share, posted for the third quarter of its 2002 fiscal year. The decreased loss was attributable to reduced operating expenses. "Our financial results reflect the persistent sluggishness in the economy and in the fiber optics communications sector in particular", commented Anil Jain, the president and chief executive officer of APA. "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 costs, mainly in fiber optic component manufacturing, and lower operating expenses in an ongoing effort to limit cash burn rate," said Jain. The Company expects to see results continue to improve as a result of the latest cost cutting measures in the fiscal fourth quarter ending March 31, 2003. "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 nine months of fiscal year 2003, the Company experienced a net loss of $3,723,224, or 31 cents a share, as compared to a loss of $3,341,564, or 29 cents a share, reported for the first nine months of fiscal 2002. Revenues decreased for the first nine months, with $152,025 reported for fiscal 2003, as compared to $570,997 for the first nine months of fiscal 2002. The weighted average shares outstanding for the third quarter of the 2003 fiscal year totaled, 11,872,331 as compared to the 11,875,881 weighted average shares outstanding during the three months ended December 31, 2001. For the nine months ended December 31, 2002 the weighted average shares outstanding were 11,874,371 compared to 11,903,496 for the nine months ended December 31, 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. 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 APA Optics/page 2 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.