March 12, 2003

News Release: $2.1-million contract for systems destined for U.S. Navy Ships

API Electronics Group Inc. (OTCBB: APIEF) today announced that its wholly owned subsidiary, TM Systems, has been awarded a contract worth US $2,102,638.00. Under the terms of the agreement, TM Systems will supply two Stabilized Glide Slope Indicator (SGSI) systems to National Steel and Shipbuilding Company (NASSCO), one of the largest new construction shipyards in the United States and a wholly owned subsidiary of General Dynamics (NYSE: GD). The SGSI systems will be used by NASSCO on ships being constructed for the U.S. Naval Sea Systems Command (NAVSEA). These systems are becoming a critical component for the Navy as they allow helicopter pilots to land safely on ships at sea at a time when the Navy needs increased flexibility to engage in military maneuvers from international waters rather than continuing to depend on foreign states to provide landing permissions or allow U.S. military installations. 'This important order clearly illustrates TM Systems'superiority in supplying critical parts and systems for the defense sector,'said Tom Mills, President and COO of API Electronics. 'We believe this contract further validates our decision to acquire TM Systems as well as our belief that the company's product line will continue to be a major growth driver for API going forward.'

The largest of the Navy's five systems commands, Naval Sea Systems Command (NAVSEA) engineers, builds and supports America's fleet of ships and combat systems. Accounting for nearly one-fifth of the Navy's budget (approximately $20 billion), NAVSEA manages more than 130 acquisition programs.

TM Systems will supply the first SGSI system to NASSCO in December 2003. The second system (and spare parts) is scheduled for delivery in July 2004. TM Systems will begin recognizing revenue in March 2003, when progress payments are scheduled to begin. In addition, the contract gives NASSCO an option to purchase an additional $6-million in systems and parts.

Over the last four decades, NASSCO (www.nassco.com) has delivered over 100 ships to the world's fleets -- 53 ships to commercial customers, becoming America's leading commercial shipbuilder during this period; and 51 auxiliary and support ships for the U.S. Navy. These have included oil tankers, ferries, containerships, and oceanographic research ships for commercial customers; and hospital ships, fast combat support ships, tank landing ships, and roll- on/roll-off ships for the United States Navy. NASSCO currently has contracts to build six commercial ships and three Navy ships.

General Dynamics (www.generaldynamics.com), headquartered in Falls Church, Virginia, employs approximately 54,000 people worldwide and had 2002 revenues of $13.8 billion. The company has leading market positions in land and amphibious combat systems, mission-critical information systems and technologies, shipbuilding and marine systems, and business aviation.

ABOUT API ELECTRONICS:

API Electronics Group Inc. and its wholly owned subsidiaries are leading designers and manufacturers of superior quality electronic components and microcircuits with precisely defined functional capabilities. API and its subsidiaries have been providing top of the line parts to numerous global producers of military hardware, telecommunications equipment, computer peripherals, process control equipment and instrumentation for a combined total of over 50 years. With a growing list of blue chip customers, including Honeywell/Allied Signal, General Dynamics, Lockheed Martin, Litton Systems, Harris Corporation and numerous other top technology-based firms around the world, API regularly ships off-the-shelf and custom designed products to clients in more than 34 countries. API owns state-of-the-art manufacturing and technology centers in New York state and Ontario, Canada totaling 48,500 square feet. The company also has manufacturing capabilities in China and a distribution center in Britain. API subsidiary, Filtran, is an ISO 9001 Registered Company. API Electronics trades on the OTC Bulletin Board under the symbol APIEF. For further information about Filtran Group and API Electronics, please visit the company websites at www.filtran.com and www.apielectronics.com.

This press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All forward- looking statements are subject to certain risks, uncertainties and assumptions. These risks and uncertainties, which are more fully described in API's Annual and Quarterly Reports filed with the Securities and Exchange Commission, include changes in market conditions in the industries in which the Company operates. Should one or more of these risks or uncertainties materialize, or should the assumptions prove incorrect, actual results may vary in material aspects from those currently anticipated.

SOURCE API Electronics Group Inc.

Primoris Group, Tel: 1-877-274-0274, This email address is being protected from spambots. You need JavaScript enabled to view it. (APIEF)

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