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

DELAND, Fla., Feb. 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 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):

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