Gross Margin Expands to nearly 47% in FY2023 In Comparison to FY2022 Gross Margin of 46.0%

HAUPPAUGE, NY, April 01, 2024 – AmpliTech Group, Inc (Nasdaq: AMPG), a designer, developer, and manufacturer of state-of-the-art signal-processing components for satellite, 5G, and other communications networks, including the design of complete 5G/6G systems, and a global distributor of packages and lids for integrated circuit assembly, today announced financial results for year ended December 31, 2023. 

Full Year 2023 Highlights

• Total Yearly Revenues of $15.6M
• Despite lower sales from our distribution business, FY23 gross profit margins grew to nearly 47% (from 46% in FY22). Core low noise amplifier business sales grew while semiconductor materials distribution business had a notable decrease in sales this fiscal year.
• FY23 net loss was $2.4M which includes $2.3M of Research and Development expenses and nearly $800K in compliance costs required for being a public company. It is important to note that without these costs, the Company would’ve been profitable.
• FY23 was a record-breaking year for new products introduction at AmpliTech Group, with over 100 new SKUs (Stock Keeping Units) released to the market in the latter portion of the fiscal year. Among these products, two major new product lines were introduced, which the company believes will be the flagship products and major revenue sources for the organization. These products are the 5G CAT B ORAN (Open Radio Access Network) Massive MIMO (Multiple Input-Multiple Output) 64T64R radios along with the Private NIB 5G suite solution (Network in a Box). These products are being marketed through our AGTGSS Division. For the core AmpliTech Inc Division, in addition to a major release of a passive product line (over 60 new SKU’s), the company has made an incursion into the profitable LNB (Low Noise Block Converter) market, the company has now product offerings in the X and Ka Bands which the company expects, at the very least, to match the revenue size of the LNA business in 2024. The company keeps on leveraging on its proprietary low noise technology with these LNB releases, as each LNB has AmpliTech Inc’s leading low noise technology amplifiers in them.
• As of December 31, 2023, Total Current Assets totaled $17.1M while Total Current Liabilities totaled $1.5M indicating strong liquidity and sound ability to meet short-term obligations.
• Working capital is $15.7M which is sufficient capital for AmpliTech to continue to fund all of its strategic growth initiatives.
• Valuable Intangible Assets and Goodwill: The presence of significant intangible assets and goodwill totaling nearly $8M reflects the company’s valuable brand reputation, intellectual property, and strategic acquisitions, which combined with the newly released product lines, demonstrates the company’s ability and fulfillment of growth strategies, positioning the company to start achieving profitable results in our next fiscal year while contributing to future earnings and competitive advantage for the years to come.
• The decline in sales of our distribution business (approx. $4.2M) was fully attributable to lack of demand from Asian customers, due to their increased inventories as result of the logistics and transportation issues experienced globally, in addition to the COVID pandemic, which triggered unprecedented demand to have inventory on hand of semiconductor materials products during 2021 and 2022.
• The demand for semiconductor products is influenced by various sectors such as consumer electronics, automotive, telecommunications, and industrial applications. Economists believe global economic conditions continue to improve and industries will increase their adoption of semiconductor technologies for innovation and expansion, mostly in AI (Artificial Intelligence) technologies, therefore predicting an annual growth rate of 20%, representing a bounce in demand for 2024.

Forward-Looking Update

• The company has set and will continue to develop pivotal business relationships with major 5G players. Our CAT B, ORAN Massive MIMO 64T64R radio has already been completed and passed all of the required laboratory testing clocking in speeds of over 1 Gigabits per second Download and Upload! While our radios are ready to start taking pre-orders, the company is moving forward with a live testing endeavor IOT (Inter Operability Testing) and has contracted and partnered with Northeastern University’s and its Open6G OTIC facility to Perform O-RAN 5G Interoperability Testing and End-to-End Demonstration and Certification of AmpliTech’s O-RAN CAT B 64T64R MIMO Radio. The tests also involve performance evaluation of the radios to meet the necessary capacity and throughput requirements sought by MNOs (Mobile Network Operators). Notably, The Open6G Open Testing and Integration Center (OTIC) at the Institute for the Wireless Internet of Things (WIoT) at Northeastern University, also partners with AT&T and Verizon as a neutral testing facility in the Acceleration of Compatibility and Commercialization for Open RAN Deployments Consortium (ACCoRD) framework. 
• With the major product releases pushed out late in 2023, Top line sales for FY 2024 are targeted to come in between $35M – $40M based on CRM funnel of $120M, including 5G products, the updated cryogenic products which were already validated by a third party lab, the newly released LNB products and the Distribution Agreement signed with CDI (A global distributor) to spur MMIC related products which soon will include offerings of not just raw MMIC’s but also packaged parts. Management expects our stronger quarters in sales will be Q3 and Q4 with notable bookings and strategic business alliances to be announced during Q2.

Management Commentary

Fawad Maqbool, Founder and CEO of AmpliTech, commented, “Although our sales were lower during our Fiscal year 2023, our gross margins increased. We continue to have a solid balance sheet and as recently released, we have introduced over 100 new products including our new flagship products for our AGTGSS and AmpliTech Inc divisions, which based on the business development activity we are generating, they will be leading our company sales in fiscal 2024. We will continue to pursue funding opportunities for our emerging technologies with the NTIA, Chips Program and USTDA which we believe we are perfectly lined up with to be approved for grant funding. Our Research and Development costs continue to demonstrate our unwavering commitment to innovation, growth and provide our valued shareholders with a solid foundation for incrementing our overall value. We continue our strategy to focus on increasing top-line revenue with high-margin products, which will eventually lead to increased bottom-line revenue later this year. “

Further more Mr. Maqbool added, “At AmpliTech, our mission is to empower companies to build the communications infrastructure that will fuel the future of technology – from AR/VR platforms and high-performance Quantum computing to 5G/6G networks providing satellite internet and beyond.

Although there is still much work to be done across various industries, including satcom, telecom (5G), high-performance computing, defense, and aerospace, to achieve the connectivity speeds required by emerging technologies, we recognize the immense potential for innovation and are dedicated to developing solutions that address these challenges, enabling faster and more efficient communication systems. By continuously pushing the boundaries of communications technology, we aim to play a pivotal role in shaping the future of these industries and facilitating the realization of their full potential,” concluded Mr. Maqbool.

About AmpliTech Group

AmpliTech Group, Inc. designs, develops, manufactures, and distributes state-of-the-art radio frequency (RF) microwave components for global satellite communications, telecom (5G & IoT), space, defense, and quantum computing markets as well as systems and component design consulting services. In December 2021, AmpliTech completed the purchase of the assets and operations of Spectrum Semiconductor Materials Inc. a global specialty distributor of semiconductor components based in San Jose, CA. AmpliTech has a 13+ year track record of developing high performance, custom solutions to meet the unique needs of some of the largest companies in the global industries we serve. We are proud of our focused team’s unique skills, experience and dedication, which enables us to deliver superior solutions, faster time to market, competitive pricing, excellent customer satisfaction and repeat business. For more information, visit: www.amplitechgroup.com

Safe Harbor Statement

This release contains statements that constitute forward-looking statements. These statements appear in several places in this release and include all statements that are not statements of historical fact regarding the intent, belief or current expectations of the Company, its directors or its officers with respect to, among other things: (i) the Company’s ability to execute its business plan as anticipated; (ii) trends affecting the Company’s financial condition or results of operations; (iii) the Company’s growth strategy and operating strategy. The words “may” “would” “will” “expect” “estimate” “anticipate” “believe” “intend” and similar expressions and variations thereof are intended to identify forward-looking statements. Investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, many of which are beyond the Company’s ability to control, and that actual results may differ materially from those projected in the forward-looking statements because of various factors. Other risks are identified and described in more detail in the “Risk Factors” section of the Company’s filings with the SEC, which are available on our website. We undertake no obligation to update, and we do not have a policy of updating or revising these forward-looking statements, except as required by applicable law.

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