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Microcap & Penny Stocks : APA optics...APAT...very interesting..any thoughts....... -- Ignore unavailable to you. Want to Upgrade?

To: Duane L. Olson who wrote (331)	11/20/2000 12:18:13 AM
From: Alan Gallaspy	Read Replies (1) \| Respond to of 342

Stumbled across this regarding APAT lightreading.com NOVEMBER 09, 2000 APA Optics Inc. (APAT) The first question investors should ask when looking at APA Optics Inc. (Nasdaq: APAT) is: "How did the share price rise to $64 when the company hasn't even cracked $1 million in annual revenue?" Apparently, Wall Street has now started asking such questions. The company is trading at $9, after running up to $64 just before the market deflated this past April. There are a lot of strange stories about obscure industrial manufacturing companies riding the optical bubble. APA Optics is one such company. APA is actually a sleepy company from Blaine, Minn., involved in researching the use of optical components for various industrial applications. It's been public since 1986, and it still has neither a press relations person, nor an investor relations department. It took weeks to track down somebody to talk to about its new products. Finally, Terry Vanderwert, business manager for the DWDM (dense wavelength-division multiplexing) product line, got back to us, apologizing for the confusion, and explained that the company is in the midst of morphing its business from a research model to a DWDM component manufacturer. From its inception, APA's primary business model was charging companies for research in the optics field, according to Vanderwert. And apparently, that model hasn't been exceptionally lucrative. For the first quarter of fiscal 2001 ending Aug. 31, the company reported a loss of $909,675, down slightly from the loss of $916,590 reported for the first quarter of fiscal 2000. Revenues for the first quarter of fiscal 2001 were a paltry $51,517, as compared to revenues of $66,597 posted for the first quarter of the 2000 fiscal year. The company has now entered the optical networking components market with a DWDM multiplexer/demultiplexer product, which allows wavelengths to be combined into, or separated from, single strands of fiber. According to several sources in the field, the product is notable for its low-loss characteristics. Late last month the company announced that Alcatel SA (NYSE: ALA) had placed an order for 25 of its DWDM components. The financial worth of the contract, however, was not disclosed. It is likely to be small. At this point, APA remains a speculative optics play, at least until it can demonstrate the potential for revenue growth from its DWDM product line. Keep in mind that it will be competing with industry giant JDS Uniphase Inc. (Nasdaq: JDSU), among many others, in this market, and that the company is releasing no revenue forecasts for the line. It's also likely the company would have to go back to the financial markets in order to scale growth to keep pace with its competitors -- it has only about $23 million in cash in the bank. If the company does develop the DWDM products into a viable product line, however, investors could hit the jackpot. The company is currently trading at a modest $160 million market capitalization, while the market for DWDM components is expected to climb into the billions of dollars in the next few years. -- R. Scott Raynovich, executive editor, Light Reading lightreading.com