MINNEAPOLIS, MN -- (MARKET WIRE) -- February 13, 2007 -- APA Enterprises, Inc. (
NASDAQ:
APAT) today
reported revenues of $4,429,117 for the third quarter of fiscal year 2007,
up 1% from revenues of $4,379,192 for the same period of fiscal year 2006.
The net loss in the third quarter of fiscal year 2007 decreased 57%, to
$429,368, or $0.04 per share, as compared to a loss of $1,275,786, or $0.11
per share, for the third quarter of fiscal year 2006.
Consolidated revenues at APACN and Optronics for the first nine months of
fiscal 2007 were $14,272,847, an increase of approximately 19% over the
$11,961,122 reported in the first nine months of fiscal year 2006. The net
loss for the nine months ended December 31, 2006 was $941,819, or $0.08 per
share, down 71% from the net loss of $3,230,420, or $0.27 per share, for
the nine months ended December 31, 2005.
Anil K. Jain, APA's president and CEO, commented, "We are very pleased with
the increased revenues as well as substantial decrease in losses both for
the 3rd quarter and the first 9 months of fiscal year 2007. Extrapolating
these figures to an annualized basis, we believe that the yearly projected
losses represent more that 50% improvement over the losses of the last
several fiscal years dating back to fiscal year 2000. Clearly, the
consolidation steps taken during the last two years are in the right
direction. Fiscal year 2007 reduction in losses are also significant,
because they include the APA Optronics as well."
APA Cables & Networks (APACN)
"Our continued growth in broadband markets further cements our confidence
that APACN is making the right investments within the growing
Fiber-to-the-Home marketplace," Cheri Beranek Podzimek, president of APACN,
said. "However, we are disappointed in our performance within the OEM
markets. The company is embarking on an aggressive operational program to
streamline our manufacturing operation. This includes the introduction of
demand-pull strategies aimed at increasing operational efficiencies while
surpassing our customers' lead time expectations."
Specifically, sales for the third quarter of fiscal year 2007 were
$4,415,034, compared to sales of $4,342,415 reported in the same quarter a
year ago. Due to improved gross margins, operating income rose to $110,680
in comparison to $21,677 in the same period last year.
APACN reported a loss of $33,634 for the quarter ended December 31, 2006 as
compared to a loss of $79,037 in the comparable period last year.
Revenues for the nine months ended December 31, 2006 were $14,174,845, up
19% from $11,908,543 in the prior-year period. Sales to the Broadband
market were up 35% while sales to the OEM market were down 15% compared to
last year. Net income was $52,863 for the nine-month period, versus a loss
of $317,547 in the fiscal 2006 period.
Optronics
The Optronics division reduced its operating expenses through consolidation
of operations and termination of the MOCVD activities.
Gross revenues at Optronics decreased 87% to $16,143 from $123,645 in the
same quarter a year ago mainly due to the termination of manufacturing
activities in Aberdeen, South Dakota. Gross revenues for the quarter ended
September 30, 2005 reflect $86,868 of sales to APACN for subcontracted
labor. Optronics did not provide any subcontract labor to APACN in the
quarter ended September 30, 2006. Optronics recorded a net loss of
$395,734, a decrease of $801,015 from a loss of $1,196,749 from the same
period of fiscal 2006. The decrease in the loss is mainly due to the
termination of MOCVD activities and reduced legal expenses from those of
fiscal year 2006 related to EIT lawsuit.
Gross revenues at Optronics decreased 70% to $101,366 from $336,420 for
nine months ended December 31, 2006 as compared to the same period a year
ago mainly due to the termination of manufacturing activities in Aberdeen,
South Dakota. Gross revenues for the months ended, 2005 reflect $283,841
of sales to APACN for subcontracted labor. Optronics did not provide any
subcontract labor to APACN in the two quarters ended September 30, 2006.
Optronics recorded a net loss of $992,932, a decrease of $1,918,191 or 66%
from a loss of $2,912,123 from the same period of fiscal 2006. The decrease
in the loss is mainly due to reduced operating expenses due to termination
of MOCVD activities, the sale of two capitalized patents, and reduced legal
expenses.
Cash Used in Operations
APA Enterprises used $1,186,193 cash in operating activities during the
third quarter of fiscal year 2007, down $1,469,046 or 55% from the
$2,655,239 cash used in operating activities during the same period in
fiscal year 2006, mostly due to reduced net losses during the current
fiscal year. The Company also used $869,175 in financing activities,
including $901,643 toward the retirement bonds issued by the South Dakota
Economic Development and Finance Authority, and $119,685 in investing
activities during the first three quarters of fiscal year 2007. Overall,
the Company used $1,933,760 cash during the third quarter of fiscal year
2007 as compared to $2,884,733 during the same period in fiscal 2006,
resulting in cash and cash equivalents on hand of $7,014,017 at December
31, 2006.
Forward-Looking Statements
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 (unaudited)
Segment detail is summarized as follows (unaudited, in thousands):
Optronics APACN Eliminations Consolidated
------------ ------------ ------------ ------------
Three months ended
December 31, 2006
Revenues $ 16 $ 4,415 $ (2) $ 4,429
Gross profit
(loss) (128) 1,353 - 1,225
Income (loss)
from operations (612) 110 - (502)
Depreciation and
amortization 84 54 - 138
Capital
expenditures 12 21 - 33
Assets 16,712 7,829 (7,680) 16,861
Three months ended
December 31, 2005
Revenues $ 124 $ 4,342 $ (87) $ 4,379
Gross profit
(loss) (152) 1,178 (2) 1,024
Income (loss)
from operations (1,346) 22 - (1,324)
Depreciation and
amortization 195 68 - 263
Capital
expenditures 62 11 - 73
Assets 19,270 7,470 (7,635) 19,105
Nine months ended
December 31, 2006
Revenues $ 101 $ 14,175 $ (3) $ 14,273
Gross profit
(loss) (347) 4,261 - 3,914
Income (loss)
from operations (1,629) 470 - (1,159)
Depreciation and
amortization 256 179 - 435
Capital
expenditures 282 43 - 325
Assets 16,712 7,829 (7,680) 16,681
Nine months ended
December 31, 2005
Revenues $ 336 $ 11,908 $ (283) $ 11,961
Gross profit
(loss) (529) 3,188 (5) 2,654
Loss from
operations (3,380) (39) - (3,419)
Depreciation and
amortization 612 194 - 806
Capital
expenditures 191 116 - 307
Assets 19,270 7,470 (7,635) 19,105
FINANCIAL RESULTS (unaudited - continued)
Three Months Ended Nine Months Ended
December 31 December 31
-------------------------- --------------------------
2006 2005 2006 2005
------------ ------------ ------------ ------------
REVENUES $ 4,429,117 $ 4,379,192 $ 14,272,847 $ 11,961,122
COST OF REVENUES 3,204,504 3,354,859 10,358,670 9,307,609
------------ ------------ ------------ ------------
GROSS PROFIT 1,224,613 1,024,333 3,914,177 2,653,513
OPERATING EXPENSES
Research and
development 105,624 313,127 394,616 980,097
Selling, general
and
administrative 1,624,576 2,035,215 5,030,770 5,185,989
Loss on disposal
of assets (4,059) - (352,266) (93,126)
------------ ------------ ------------ ------------
1,726,141 2,348,342 5,073,120 6,072,960
------------ ------------ ------------ ------------
LOSS FROM
OPERATIONS (501,528) (1,324,009) (1,158,943) (3,419,447)
OTHER INCOME, net 98,680 48,973 286,894 191,477
------------ ------------ ------------ ------------
LOSS BEFORE INCOME
TAXES (429,368) (1,275,786) (872,049) (3,227,970)
INCOME TAXES 26,520 750 69,770 2,450
------------ ------------ ------------ ------------
NET LOSS $ (429,368) $ (1,275,786) $ (941,819) $ (3,230,420)
============ ============ ============ ============
NET LOSS PER SHARE:
Basic and diluted $ (0.04) $ (0.11) $ (0.08) $ (0.27)
============ ============ ============ ============
WEIGHTED AVERAGE
SHARES
OUTSTANDING:
Basic and
diluted 11,872,331 11,872,331 11,872,331 11,872,331
============ ============ ============ ============
FINANCIAL RESULTS (unaudited - continued)
December 31, 2006 March 31, 2006
----------------- -----------------
Assets:
Cash and cash equivalents $ 7,014,017 $ 8,947,777
Other current assets 3,600,956 4,028,751
Property, plant and equipment,
net 2,421,545 2,623,412
Other assets 3,824,388 3,993,631
----------------- -----------------
Total assets $ 16,860,906 $ 19,593,571
================= =================
Liabilities:
Current liabilities $ 1,761,311 $ 3,723,195
Long-term liabilities 419,230 290,934
Shareholders' equity:
Common stock 118,723 118,723
Additional-paid-in-capital 52,008,955 51,966,213
Accumulated deficit (37,447,313) (36,505,494)
----------------- -----------------
Total shareholders' equity 14,680,365 15,579,442
----------------- -----------------
Total liabilities and
shareholders' equity $ 16,860,906 $ 19,593,571
================= =================
APA Enterprises, Inc. consists of an Optronics group and a Cables &
Networks group (APACN). The Company develops, designs, manufactures and
markets a variety of fiber optics, copper and Gallium Nitride (GaN) based
components and devices for industrial, commercial, consumer and scientific
applications. APACN designs, manufactures and markets a variety of fiber
optic and copper components to the data communication and telecommunication
industries. Optronics is active in the development, design, manufacture and
marketing of ultraviolet (UV) detection and measurement devices for
consumers and industrial customers, and Gallium Nitride (GaN) based
transistors for power amplifiers and other commercial applications.
Additional information about APA Enterprises is available at
http://www.apaenterprises.com.
Contact Information: APA Enterprises, Inc. Contact Information:
Anil Jain
Chief Executive Officer
info@apaenterprises.com
763-784-4995