Advanced Photonix, Inc. Reports Second Quarter FY 2003 Results.

Business Editors

CAMARILLO, Calif.--(BUSINESS WIRE)--Nov. 12, 2002

Advanced Photonix, Inc. (R) (AMEX:API) today reported its second quarter FY 2003 results.

Net sales for the second quarter ended September 29, 2002, were $1.84 million, an increase of 2% from $1.81 million reported in the second quarter of the previous year. Net sales for the six months ended September 29, 2002 decreased 7% to $3.39 million, as compared with $3.64 million in the same period of the prior year. The Company reported a net loss for the quarter of ($232,000), or ($.02) per share, and a year to date net loss of ($255,000), or ($.02) per share. For the same periods of the prior year, the Company reported net losses of ($508,000), or ($.04) per share, and ($153,000), or ($.01) per share, respectively.

The consolidated financial information reported includes the accounts of both Advanced Photonix, Inc. and its wholly owned subsidiary, Silicon Sensors, Inc. (SSI). As previously announced in August 2002, SSI purchased substantially all of the assets and selected liabilities of Silicon Sensors, LLC, a closely held manufacturer of opto-electronic semiconductor based components, located in Dodgeville, Wisconsin, for approximately $1.7 million, plus the assumption of certain accounts payable and accrued liabilities. The Company's financial results include the results of SSI from August 22, 2002 to September 29, 2002.

The Company reported that although revenues from the military aerospace markets were down slightly, it had seen improvements in revenues from the medical and industrial sensing markets. Year to date, sales to the medical and industrial sensing markets represent 61% of total revenues, and sales to the military aerospace markets represent 36% of total revenues, as compared to 59% and 40%, respectively, for the prior year. The Company noted that the recent decrease in revenues was primarily due to customer-requested delayed shipment schedules and that sales were expected to improve in upcoming quarters, as those shipments have been re-scheduled and are expected to ship throughout the remainder of the year and beyond.

Gross profit on net sales decreased ten percentage points to 29% for the quarter, as compared to 39% for the second quarter of fiscal year 2002. Year to date, gross profit has decreased eleven percentage points to 34%, as compared to 45% during the same six month period of the prior year.

Lack of increased sales and variability in product mix were responsible for the majority of the change in gross margin percentage. Lower margins associated with the current sales mix accounted for approximately 40% of the change, while increased manufacturing costs associated with SSI were responsible for approximately 15% of the change. The remainder was due to fixed overhead and indirect costs which were not absorbed by increased revenues.

In announcing the results, Brock Koren, President and Chief Executive Officer of Advanced Photonix, said "We had a relatively flat second quarter with our primary focus on consolidating Silicon Sensors into Advanced Photonix. Our outlook for the current quarter and the remainder of FY2003 is optimistic. We expect quarter-over-quarter revenue growth throughout the remainder of the fiscal year for both units with improved profitability. API is well positioned for the future with better leadership, more manufacturing capability, a sound financial structure and a wealth of opportunity in the marketplace."

Advanced Photonix, Inc.(R) is a leading supplier of innovative, silicon-based electro-optical products and design solutions to a global OEM customer base. Products include the patented Large Area Avalanche Photodiode (LAAPD) and FILTRODE(R) detectors, as well as PIN photodiodes. More information on Advanced Photonix can be found at http://www.advancedphotonix.com.

The information contained herein includes forward-looking statements that are based on assumptions that management believes to be reasonable but are subject to inherent uncertainties and risks including, but not limited to, unforeseen technological obstacles which may prevent or slow the development and/or manufacture of new products, limited (or slower than anticipated) customer acceptance of new products which have been and are being developed by the Company and a decline in the general demand for optoelectronic products.

                        Advanced Photonix, Inc.
                         Financial Highlights

(000 except share data)    Three Months Ended      Six Months Ended
                         ---------------------- ----------------------
                         September  September   September  September
                          29, 2002   23, 2001    29, 2002   23, 2001
                         ---------------------- ----------------------
NET SALES                    $1,838     $1,809      $3,386     $3,640
GROSS PROFIT                   $531       $709      $1,162     $1,622
  Percent to Net Product
   Shipments                     29%        39%         34%        45%
NET LOSS                      ($232)     ($508)      ($255)     ($153)
BASIC NET LOSS PER SHARE (a) ($0.02)    ($0.04)     ($0.02)    ($0.01)
WEIGHTED AVG. NUMBER OF
 SHARES OUTSTANDING      12,251,000 12,242,000  12,249,000 12,240,000

(a) The impact of dilutive shares is immaterial