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

Business Editors

CAMARILLO, Calif.--(BUSINESS WIRE)--Feb. 11, 2003

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

Net sales for the third quarter ended December 29, 2002, were $2.6 million, an increase of 60% from $1.6 million reported in the third quarter of the previous year. Net sales for the nine months ended December 29, 2002 increased 14% to $6.0 million, as compared with $5.3 million in the same period of the prior year. The Company reported net income for the quarter of $61,000, or $.00 per share, and a year to date net loss of ($194,000), or ($.02) per share. For the same periods of the prior year, the Company reported net income of $98,000, or $.01 per share, and a net loss of ($55,000), or ($.00) per share, respectively. The consolidated financial information reported includes the accounts of Advanced Photonix, Inc. and also its wholly owned subsidiary, Silicon Sensors, Inc. ("SSI") from the date of acquisition (August 21, 2002) through December 29, 2002.

The Company reported increased revenues in all of its major market segments: medical, industrial sensing and military aerospace. While sales to the military aerospace markets have increased only 1% year to date, sales to the medical markets have increased 14% and industrial sensing revenues have increased 23%, as compared to the same nine month period of the previous year. Combined, revenues from these three segments account for 98% of total revenues year to date.

Gross profit on net sales decreased seven percentage points to 33% for the quarter, as compared to 40% for the third quarter of fiscal year 2002. Year to date, gross profit has decreased nine percentage points to 34%, as compared to 43% during the same nine month period of the prior year. The Company reported continued increases in material costs and overall manufacturing costs. These factors and the shift in product sales mix associated with the SSI acquisition were primarily responsible for the higher costs of sales and resulting decreases in gross margin.

In addition, net income was affected by increased selling, general and administrative costs for both the quarterly and year to date periods. The Company attributes these increases to the absorption of SSI expenses as well as increased insurance, depreciation, consultant and legal expenses over the same periods in the prior year.

In announcing the results, Paul Ludwig, President of Advanced Photonix, said: "We are pleased with our strong sales and return to profitability for Q3, despite the continued softness and slow recovery in the marketplace. Our January 2003 acquisition of Texas Optoelectronics, Inc. ("TOI") will facilitate the next steps toward our model of sustained profitability once we complete the closing of the TOI facility in Garland, Texas and integrate that business into our existing Wisconsin and California facilities."

He went on to say, "Roughly 70% of TOI's sales are to the military segment, which will increase our overall military business to approximately 45% of total revenues and should improve our gross profitability as a percentage of sales. While we have seen increased new project activity with existing and potential new customers, we expect to experience a modest yet continuous recovery in our core business."

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, risks associated with the integration of newly acquired businesses, 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     Nine Months Ended
                         ---------------------- ----------------------
                            Dec. 29,   Dec. 23,    Dec. 29,   Dec. 23,
                              2002       2001        2002       2001
                         ---------------------- ----------------------
NET SALES                    $2,603     $1,629      $5,989     $5,268

GROSS PROFIT                   $866       $654      $2,028     $2,275

  Percent to Net Sales           33%        40%         34%        43%

NET INCOME (LOSS)               $61        $98       ($194)      ($55)
BASIC NET INCOME (LOSS)
 PER SHARE(a)                 $0.00      $0.01      ($0.02)    ($0.00)
WEIGHTED AVG. NUMBER OF
 SHARES OUTSTANDING      12,251,000 12,243,000  12,250,000 12,241,000

(a) The impact of dilutive shares is immaterial.