ARCW Arc Grp. Worldwide, Inc.

ARC REPORTS SECOND QUARTER FISCAL YEAR 2015 FINANCIAL RESULTS

For the quarter ended December 28, 2014, compared to the quarter ended December 29, 2013:

·                  Sales of $27.1 Million, An Increase of 35.9%;

·                  Gross Profit of $6.4 Million, In-line With the Prior Year Period; and

·                  Adjusted EBITDA of $3.8 Million, In-line With the Prior Year Period.

DELAND, FL., February 5, 2015/PRNewswire/—ARC Group Worldwide, Inc. (“ARC”) (NASDAQ: ARCW), a leading global provider of advanced manufacturing and 3D printing solutions, today reported its second quarter fiscal year 2015 (December 28, 2014) financial results.

Second Quarter Operating Results

Second quarter fiscal year 2015 revenue was $27.1 million, an increase of 35.9% compared to the prior year period.  The year-over-year increase was largely the result of acquisitions completed during the fourth quarter of fiscal year 2014.  Sequentially, weakness in the firearms industry offset metal injection molding (“MIM”) revenue gains in other sectors, as well as record quarterly revenue at Tekna Seal and robust sales growth at 3D Material Technologies and Kecy.  Quarterly revenue results at the Company’s Hungarian operations were also impacted by the decline of the Euro versus the US dollar.  In January 2015, the Company entered into currency contracts to partially mitigate potential further Euro depreciation.

Gross Profit for the period was $6.4 million, an increase of 0.9% compared to the prior year period.  Adjusted EBITDA was $3.8 million, an increase of 0.3% compared to the prior year period.  Sequentially, Adjusted EBITDA margins were 14.1%, versus 14.2% and 9.6% in the prior two quarters since the Kecy acquisition.  Overall, while the Company continues to execute on its integration and cost reduction strategies, margins during the quarter were impacted by several factors, including: (i.) a reduction in inventory levels at AFT to improve working capital efficiency; (ii.) changes in the Company’s direct workforce versus contract labor staffing levels; (iii.) continued investment into 3DMT’s proprietary Additive Manufacturing technology and services; and (iv.) continued investment in the Company’s sales and marketing efforts.

Last quarter, the Company began the implementation of an extensive margin enhancement program throughout each of its operating units.  ARC expects to realize improved operational efficiencies and margins from these strategic initiatives, particularly as revenue returns to normalized levels.  Separately, recent indications from firearm customers, defense industry conferences, and other sector metrics, including FBI background checks, have suggested the firearm market has begun to

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stabilize and is poised for a potential rebound.

Jason Young, Chairman and CEO, commented, “ARC remains in a transitional phase following our acquisitive prior fiscal year, and while we have faced modest short term weakness due to the slowdown in the firearms market, we remain optimistic about the long term prospects of our approach to advanced manufacturing through the strategic combination of additive and subtractive processes.  We believe our platform is differentiated, and offers our customers unique and comprehensive solutions to their manufacturing needs.  We also believe that as we fully integrate our offerings, we will be able to improve our margins and expand our revenue over time.  In the short run, some of our efforts require investment and productivity improvements, but long-term we believe we are developing proprietary technology that will give our customers innovative and compelling advantages.”

GAAP to Non-GAAP Reconciliation

EBITDA, Adjusted EBITDA, EBITDA margin, and Adjusted EBITDA margin are non-GAAP financial measures.  EBITDA margin and Adjusted EBITDA margin are calculated by dividing EBITDA and Adjusted EBITDA, respectively, by sales.  We have provided this non-GAAP financial information to aid in better understanding the Company’s performance absent these charges.  Non-GAAP financial measures are not in accordance with, or an alternative for, generally accepted accounting principles in the United States.  The Company’s non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP financial measures, and should be read only in conjunction with the Company’s consolidated financial statements prepared in accordance with GAAP.

The reconciliation to GAAP is as follows (dollars in thousands):

Merger expenses are costs incurred to effectuate our acquisitions, such as advisory, legal and accounting fees.  Other non-recurring expenses consist primarily of accounting and legal fees associated with our acquisitions and financing activities.  Reorganization expenses are primarily labor and labor related costs association with the termination of employees.

Adjusted EBITDA excludes interest expense, net and income taxes because these items are associated with our capitalization and tax structures.  Adjusted EBITDA also excludes depreciation and amortization expense because these non-cash expenses reflect the impact of prior capital expenditure decisions which may not be indicative of future capital expenditure requirements.

The Company has filed a registration statement (including a preliminary prospectus and issuer free writing prospectuses) with the U.S. Securities and Exchange Commission (“SEC”) for the offering of common stock to which this presentation relates.  Before you invest, you should read the prospectus in that registration statement, the issuer free writing prospectuses and other documents the Company has filed with the SEC for more complete information about the Company and this offering.  You may obtain these documents free of charge by visiting the SEC online

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database (EDGAR) on the SEC’s website at www.sec.gov.  The Company’s registration statement on Form S-1 containing the preliminary prospectus, dated January 20, 2015, is available at the following link:

http://www.sec.gov/Archives/edgar/data/826326/000104746915000280/a2222688zs-1a.htm

Alternatively, you may obtain a copy of the prospectus and any other publicly available documents from the Company by calling (303) 467-5236 or from Brean Capital by calling (212) 702-6500.

About ARC Group Worldwide, Inc.

ARC Group Worldwide, Inc. is a leading global advanced manufacturing and 3D printing service provider. With its business founded in 1987, the Company offers its customers a compelling portfolio of advanced manufacturing technologies and cutting-edge capabilities to improve the efficiency of traditional manufacturing processes and accelerate their time to market. In addition to being a world leader in metal injection molding (“MIM”), ARC has significant expertise in 3D printing and imaging, materials science, advanced tooling, automation, machining, stamping, plastic injection molding, lean manufacturing, and robotics. For more information about ARC Group Worldwide, Inc. please visit www.ArcGroupWorldwide.com, or its operating subsidiaries at www.3DMaterialTechnologies.com, www.AFTmim.com, www.AFTmimHU.com, www.ARCmim.com, www.ArcWireless.net, www.ATCmold.com, www.FloMet.com, www.GeneralFlange.com, www.Injectamax.com, www.kecycorporation.com, www.TeknaSeal.com, and www.ThixoWorks.com.

Forward Looking Statements

This press release may contain “forward-looking” statements as defined in the Private Securities Litigation Reform Act of 1995, which are based on ARC’s current expectations, estimates and projections about future events.  These include, but are not limited to, statements, if any, regarding business plans, pro-forma statements and financial projections, ARC’s ability to expand its services and realize growth.  These statements are not historical facts or guarantees of future performance, events or results.  Such statements involve potential risks and uncertainties, and the general effects of financial, economic, and regulatory conditions affecting our industries.  Accordingly, actual results may differ materially.  ARC does not have any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.  For additional factors that may affect future results, please see filings made by ARC with the Securities and Exchange Commission (“SEC”), including its registration statement on Form S-1, as amended, its Form 10-K for the fiscal year ended June 30, 2014 and Form 10-Q for the period ended September 28, 2014, as well as current reports on Form 8-K filed from time-to-time with the SEC.

CONTACT: Drew M. Kelley

PHONE: (303) 467-5236

Email: InvestorRelations@ArcGroupWorldwide.com

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ARC Group Worldwide, Inc.

Unaudited Condensed Consolidated Statements of Operations

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ARC Group Worldwide, Inc.

Condensed Consolidated Balance Sheets

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ARC Group Worldwide, Inc.

Unaudited Condensed Consolidated Statements of Cash Flows

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