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.
FINANCIAL RESULTS Three Months Ended Nine Months Ended December 31, December 31, -------------------------- -------------------------- 2002 2001 2002 2001 ------------ ------------ ------------ ------------ Revenues $ 40,674 $ 49,089 $ 152,025 $ 570,997 Costs and expenses: Cost of sales 554,053 1,026,341 2,030,730 2,926,509 Research and development 360,178 342,224 1,050,025 761,116 Selling, general and administrative 296,638 315,842 1,014,573 1,262,674 ------------ ------------ ------------ ------------ 1,210,869 1,684,407 4,095,328 4,950,299 Loss from operations (1,170,195) (1,635,318) (3,943,303) (4,379,302) Interest income 44,906 244,499 300,795 1,046,760 Interest expense (25,705) (30,933) (79,716) (97,385) ------------ ------------ ------------ ------------ 19,201 213,566 221,079 949,375 Loss before income taxes (1,150,994) (1,421,752) (3,722,224) (3,429,927) Income taxes 500 250 1,000 1,637 ------------ ------------ ------------ ------------ Net loss (1,151,494) (1,422,002) (3,723,224) (3,431,564) ------------ ------------ ------------ ------------ Net loss applicable to common shareholders $(1,151,494) $(1,422,002) $(3,723,224) $(3,431,564) ============ ============ ============ ============ Net loss per share: Basic and diluted ($0.10) ($0.12) ($0.31) ($0.29) ============ ============ ============ ============ Weighted average shares outstanding: Basic and diluted 11,872,331 11,875,881 11,874,371 11,903,496 ============ ============ ============ ============
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FINANCIAL RESULTS (Continued) December 31, March 31, 2002 2002 -------------- ------------- Assets: Cash and equivalents $ 27,721,495 $ 31,606,403 Other current assets 309,862 234,276 Property, plant and equipment, net 3,565,919 3,748,004 Other assets 619,336 807,727 -------------- ------------- Total assets $ 32,216,612 $ 36,396,410 ============== ============= Liabilities: Current liabilities 2,188,575 2,426,475 Long-term liabilities 229,305 465,018 Shareholders' equity: Common stock 118,723 118,759 Additional-paid-in-capital 51,595,262 51,578,185 Accumulated deficit (21,915,253) (18,192,027) -------------- ------------- Total shareholders' equity 29,798,732 33,504,917 -------------- ------------- Total liabilities and shareholders' equity $ 32,216,612 $ 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. 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's Internet address is http://www.apaoptics.com. ------------------------ APA Optics, Inc. Contact Information: - ------------------------------------- David R. Peters Chief Financial Officer dpeters@apaoptics.com - --------------------- 763-784-4995 Anil K. Jain Chief Executive Officer infor@apaoptics.com - ------------------- 763-784-4995