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APA ENTERPRISES, INC. REPORTS RESULTS FOR THE FIRST QUARTER OF FISCAL YEAR ENDING SEPTEMBER 30, 2007
· Net Sales for the quarter of $4.9 Million
· Non-recurring expenses primarily related to the closure of the Optronics business segment of $1.6 Million
· Sale of land nets $0.26 Million
· Resulting Net Loss of $1.4 Million
MINNEAPOLIS, MN, August 14, 2007 -- APA Enterprises, Inc. (Nasdaq: APAT) today announced results of its first quarter ending June 30, 2007.
“Excluding the non-recurring costs associated with the Company’s decision to close the APA Optronics business unit and unrelated severance costs, the Company was able to deliver near break-even performance for the quarter,” commented Cheri Beranek Podzimek, president and CEO of APA Enterprises. “The Company is wrapping up activities associated with the closure of the Optronics business unit and looks forward to focusing our financial and management resources on Cables & Networks, the growth engine of APA Enterprises.”
APA Cables & Networks Subsidiary Performance
APACN had consolidated revenues of $4,907,046 for the first quarter ended June 30, 2007, compared to revenues of $5,072,186 for the same period of last year. Gross profit increased $17,683 to 30% as a percentage of revenue compared to 28% in the same quarter of 2006.
Discontinued Operations
After careful analysis the company elected to discontinue the APA Optronics business and sell its APA India operation. All of the costs and related transactions associated with the discontinued operations sale of APA India and APA Optronics impairment of assets are reflected in the quarter’s financial statements. The company also intends to exit its current office in Blaine, Minnesota and to designate the office of its subsidiary, APA Cables & Networks, as its principal office. The company expects an additional $60,000 in costs associated with these closure activities to be recorded in the 2nd quarter.
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APA Enterprises/page two
Net Loss and Cash Flow
The net loss in the first quarter ended June 30, 2007, is $1,409,939 or $.12 cents per share compared to a loss of $112,018 or $.01 per share for the quarter ended June 30, 2006. The net loss from continuing operations in the quarter ended June 30, 2007 is $468,938 of $0.04 per share compared to net income from continuing operations of $22,697 during the period ended June 30, 2006. The 2007 amounts include $397,471 of severance costs related to the departure of our former CEO. The company used $254,263 in cash during the first quarter of fiscal year 2007 as compared to $803,831 during the same period in fiscal quarter of fiscal year 2007 as equivalents on hand of $6,509,106 at June 30, 2007. The cash used in the current period of $503,167 reflects the impact of both continuing and discontinued operations as well as, working capital changes. This compares to cash used in the same quartere of 2006 of $946,762. The company also realized net cash of $244,523 due to investing activities compared to $165,895 for the same period in 2006.
APA Enterprises recently announced a change in its fiscal year-end from March 31 to September 30, with the period from April 1, 2007 through September 30, 2007 being a short year.
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.
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APA Enterprises/page three
FINANCIAL RESULTS (unaudited)
| Three Months Ended | ||||||||
| June 30 | ||||||||
| 2007 | 2006 | |||||||
| REVENUES | $ | 4,907,046 | $ | 5,072,186 | ||||
| COSTS OF SALES | 3,456,901 | 3,639,724 | ||||||
| GROSS PROFIT | 1,450,145 | 1,432,462 | ||||||
| OPERATING EXPENSES | 1,977,583 | 1,489,542 | ||||||
| LOSS FROM OPERATIONS | (527,438 | ) | (57,080 | ) | ||||
| OTHER INCOME, net | 82,870 | 98,757 | ||||||
| (LOSS) INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES | (444,568 | ) | 41,677 | |||||
| INCOME TAXES | 24,370 | 18,980 | ||||||
| NET (LOSS) INCOME FROM CONTINUING OPERATONS | (468,938 | ) | 22,697 | |||||
| LOSS FROM DISCONTINUED OPERATIONS | (941,001 | ) | (134,715 | ) | ||||
| NET LOSS | $ | (1,409,939 | ) | $ | (112,018 | ) | ||
| NET LOSS PER SHARE: | ||||||||
| Basic and diluted | $ | (0.12 | ) | $ | (0.01 | ) | ||
WEIGHTED AVERAGE SHARES OUTSTANDING: | ||||||||
| Basic and diluted | 11,872,331 | 11,872,331 | ||||||
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APA Enterprises/page four
FINANCIAL RESULTS (unauditied - continued)
| June 30, 2007 | March 31, 2007 | |||||||
| Assets: | ||||||||
| Cash and cash equivalents | $ | 6,509,106 | $ | 6,716,176 | ||||
| Other current assets | 3,905,960 | 3,516,016 | ||||||
| Property, plant and equipment, net | 1,668,160 | 2,210,890 | ||||||
| Other assets | 3,432,980 | 3,279,476 | ||||||
| Total assets | $ | 15,516,206 | $ | 15,722,558 | ||||
| Liabilities: | ||||||||
| Current liabilities | $ | 2,740,305 | $ | 2,010,726 | ||||
| Long-term liabilities | 691,669 | 235,348 | ||||||
| Shareholders’ equity: | ||||||||
| Common stock | 118,723 | 118,723 | ||||||
| Additional-paid-in-capital | 52,028,252 | 52,018,729 | ||||||
| Accumulated deficit | (40,062,743 | ) | (38,660,968 | ) | ||||
| Total shareholders’ equity | 12,084,232 | 13,476,484 | ||||||
| Total liabilities and shareholders’ equity | $ | 15,516,206 | $ | 15,722,558 | ||||
APA Enterprises Inc., consists of the Cables & Networks group. Cables & Networks designs, manufactures and markets a variety of fiber optic and copper components to the data communication and telecommunication industries. Additional information about APA Enterprises is available at http://www.apaenterprises.com.
APA Enterprises, Inc. Contact Information:
Cheryl Beranek Podzimek
Chief Executive Officer and President
investor-relations@apaenterprises.com
763-476-6866
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