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EXHIBIT 99.1
News Release
APA ENTERPRISES, INC. REPORTS RECORD REVENUES, DECREASED LOSSES FOR 2005 FISCAL
YEAR
Subsidiary APA Cables & Networks posts a profit for the year
MINNEAPOLIS, MN, JUNE 28, 2005 -- APA Enterprises, Inc. (Nasdaq: APAT) today
reported that consolidated revenues for the fiscal year ended March 31, 2005
increased 17% to $13,886,486 from $11,909,465 reported for fiscal year 2004. The
change was due to higher revenues at APA's wholly owned subsidiary, APA Cables &
Network, Inc. (Cables & Networks), in the 2005 first quarter. The higher
revenues were attributable to assets acquired from Americable, Inc. at the end
of the first quarter of fiscal 2004. The Americable acquisition contributed no
corresponding revenues for the fiscal 2004 first quarter.
APA reported a net loss of $3,420,038, or $.29 cents per share, for the year
ended March 31, 2005, representing a decrease of 48% from the net loss of
$6,535,147, or $.55 cents per share in fiscal year 2004. The decreased loss
reflects reduced costs and expenses in both the Optronics division and Cables &
Networks due mainly to reductions in employee levels and more efficient
operations.
For the fourth quarter of fiscal 2005, revenues were $3,225,401, a decrease of
$253,547 from $3,478,948 posted in the fourth quarter of fiscal year 2004. The
decrease is due mainly to lower sales by Cables & Networks to Original Equipment
Manufacturers (OEM's). The net loss in the fourth quarter of fiscal 2005
decreased 46% to $905,645, or $.08 cents per share compared to a loss of
$1,679,824, or $.14 cents per share, reported for the fourth quarter of fiscal
year 2004. The net decrease in loss is principally due to lower cost of sales at
both Cables & Networks and Optronics.
Anil K. Jain, APA's president and chief executive officer, commented, "We are
pleased with the progress made this fiscal year with respect to the overall
reduction of losses. We are also excited to announce Cables & Networks posted a
profit in its second full year of operations. This profit is a result of
continued acceptance of its products in the marketplace along with management's
success in streamlining operations since the acquisition."
The overall cash used during fiscal 2005 was $2,731,418, a significant reduction
of 69% as compared to $8,690,776 during fiscal 2004. The overall cash used
during fiscal 2005 was the lowest since fiscal 1999. The Company used
approximately $2.0 million in operations during fiscal 2005, down 64% from
fiscal 2004.
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APA Enterprises/page two
The Company finished the year with $10,813,492 in cash. The cash consumption
during the fourth quarter of fiscal 2005 was $959,357 as compared to $1,495,555
during the comparable period of fiscal 2004.
The weighted average shares outstanding for the three and twelve months ended
March 31, 2005 were 11,872,331, unchanged from the three and twelve months ended
March 31, 2004.
Cable & Networks
Sales for the year ended March 31, 2005 were $13,800,589, an increase of
$2,109,311, or 18% from fiscal 2004. Fiscal 2005 included a full year of
operations with the assets acquired from Americable, Inc. versus 9 months of
operations with such assets in fiscal 2004. Net income was $36,085 for fiscal
2005 versus a loss of $1,245,121 for the same period in fiscal 2004. The
increase in income over the prior year is due mainly to increased gross margins
of approximately $1,160,000 due to the Americable acquisition along with the
reduction of S, G & A expenses and the elimination of expenses related to
consolidating the acquisition in the prior year.
Sales for the fourth quarter of fiscal year 2005 were $3,205,077, compared to
sales of $3,438,463 reported in the same quarter a year ago, a decrease of 7%.
The decrease was due to lower sales to OEM customers compared to last year.
Cables & Networks reported net income of $30,859 for the fourth quarter of the
fiscal year ended March 31, 2005 as compared to a loss of $298,364 in the
comparable period last year. The improvement is due to reductions in personnel
and related costs in both production and S, G & A, as well as a reduction in
asset disposal charges of $77,000 absorbed in the prior year quarter.
Optronics Division
Gross sales for the year ended March 31, 2005 were $489,737, an increase of
$80,941, or 20%, compared to the $408,796 in fiscal 2004. Revenues for fiscal
2005 reflect $403,840 of sales to Cables & Networks for fiber optics products
and subcontracted labor versus $190,609 in the fiscal 2004. These sales are
eliminated as inter-company sales in the consolidated financial statements, and
represent the primary difference from last year's sales. The net loss for year
ended March 31, 2005 was $3,456,123 versus a loss of $5,290,026 in fiscal 2004.
The decreased loss reflects cost reductions in the year ended March 31, 2005,
primarily consisting of approximately $1,450,000 of lower personnel and
production costs associated with the workforce reduction, the elimination of
expenses related to the optics product line (which was sold in April 2004), and
income of approximately $200,000 generated from the sale of the optics product
line.
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APA Enterprises/page three
Gross sales for the fourth quarter of 2005 were $101,018, versus gross sales of
$187,498 reported in the same quarter in 2004. Revenues for the fourth quarter
ended March 31, 2005 reflect $79,945 of sales to Cables & Networks for fiber
optics products and subcontracted labor versus $147,013 in the year ago period.
These sales are eliminated as inter-company sales in the consolidated financial
statements, and represent the primary difference from last year's sales. The
net loss of $936,504 for the quarter was down 32% from the net loss of
$1,381,460 posted for the same quarter of 2004. The decrease from the prior year
is due mainly to lower personnel expenses from planned workforce reductions.
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 four
FINANCIAL RESULTS
Cables &
Optronics Networks Eliminations Consolidated
----------- ---------- -------------- --------------
Three months ended March 31, 2005
External sales $ 101 $ 3,205 $ (81) $ 3,225
Cost of sales 323 2,279 (81) 2,521
Operating income (loss) (1,071) 112 - (959)
Depreciation and amortization 211 58 - 269
Capital expenditures, net 101 21 - 122
Total assets 22,253 7,188 (7,367) 22,074
Three months ended March 31, 2004
External sales $ 188 $ 3,438 $ (147) $ 3,479
Cost of sales 924 2,593 (147) 3,370
Operating loss (1,500) (152) - (1,652)
Depreciation and amortization 246 37 - 283
Capital expenditures, net 285 (58) - 227
Total assets 26,187 7,310 (7,413) 26,084
Twelve months ended March 31, 2005
External sales $ 489 $ 13,801 $ (404) $ 13,886
Cost of sales 1,622 9,980 (404) 11,198
Operating income (loss) (4,129) 334 - (3,795)
Depreciation and amortization 774 230 - 1,004
Capital expenditures, net 342 79 - 421
Total assets 22,253 7,188 (7,367) 22,074
Twelve months ended March 31, 2004
External sales $ 409 $ 11,691 $ (191) $ 11,909
Cost of sales 3,074 9,031 (191) 11,914
Operating loss (5,604) (955) - (6,559)
Depreciation and amortization 797 174 - 971
Capital expenditures, net 695 91 - 786
Total assets 26,187 7,310 (7,413) 26,084
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APA Enterprises/page five
FINANCIAL RESULTS (Continued)
Three Months Ended Twelve Months Ended
March 31 March 31
-------------------------- --------------------------
2005 2004 2005 2004
------------ ------------ ------------ ------------
REVENUES $ 3,225,401 $ 3,478,948 $13,886,486 $11,909,465
COST OF SALES 2,521,370 3,369,548 11,198,176 11,914,050
------------ ------------ ------------ ------------
GROSS PROFIT (LOSS) 704,031 109,400 2,688,310 (4,585)
OPERATING EXPENSES
Research and development 378,018 291,645 1,103,972 948,737
Selling, general and administrative 1,285,410 1,470,214 5,379,483 5,605,177
------------ ------------ ------------ ------------
1,663,428 1,761,859 6,483,455 6,553,914
------------ ------------ ------------ ------------
LOSS FROM OPERATIONS (959,397) (1,652,459) (3,795,145) (6,558,499)
OTHER INCOME (LOSS), net 54,309 (27,475) 379,245 25,405
------------ ------------ ------------ ------------
LOSS BEFORE INCOME TAXES (905,088) (1,679,934) (3,415,900) (6,533,094)
INCOME TAXES 557 (110) 4,138 2,053
------------ ------------ ------------ ------------
NET LOSS $ (905,645) $(1,679,824) $(3,420,038) $(6,535,147)
============ ============ ============ ============
NET LOSS PER SHARE:
Basic and diluted $ (0.08) $ (0.14) $ (0.29) $ (0.55)
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WEIGHTED AVERAGE SHARES
OUTSTANDING:
Basic and diluted 11,872,331 11,872,331 11,872,331 11,872,331
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APA Enterprises/page six
FINANCIAL RESULTS (Continued)
March 31, 2005 March 31, 2004
---------------- ----------------
Assets:
Cash and cash equivalents $ 10,813,492 $ 13,544,910
Other current assets 3,112,821 3,670,097
Property, plant and equipment, net 3,946,998 4,550,956
Other assets 4,200,703 4,317,553
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Total assets $ 22,074,014 $ 26,083,516
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Liabilities:
Current liabilities 3,044,053 3,546,619
Long-term liabilities 107,800 173,836
Shareholders' equity:
Common stock 118,723 118,723
Additional-paid-in-capital 51,960,084 51,980,946
Accumulated deficit (33,156,646) (29,736,608)
---------------- ----------------
Total shareholders' equity 18,922,161 22,363,061
---------------- ----------------
Total liabilities and shareholders' equity $ 22,074,014 $ 26,083,516
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APA Enterprises, Inc., consisting of the Optronics division and APA Cables and
Networks Inc., a wholly owned subsidiary, (Cables & Networks) 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. Cables & Networks 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.
-----------------------------
APAEnterprises, Inc. Contact Information:
- -----------------------------------------
Anil Jain
Chief Executive Officer
info@apaenterprises.com
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763-784-4995
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