The increase in gross profit for the six months ended June 30, 2018 as compared to 2017 was due largely to a 221.3% increase in gross profit from machined orthopedic implant components and instruments. The increase was due in part to increased sales. Additionally, the increase is due largely to the improved results for three months ending June 30, 2018 as compared to 2017 as noted above.

In addition to the improvement in gross margin, the Company reduced selling and marketing expenses by 21.2% and reduced general and administrative expenses by 3.1% in the six months ended June 30, 2018 compared to the same period in 2017.

For the six months ended June 30, 2018, the Company improved Adjusted EBITDA⁽¹⁾ to $878 thousand, or 8.4% of sales, compared to $142 thousand, or 1.3% of sales, for the six months ended June 30, 2017, an increase of $736 thousand. 

 ⁽¹⁾See attached table for additional important disclosures regarding the Company’s use of Adjusted EBITDA, as well as a reconciliation of net loss from operations to Adjusted EBITDA.

Recent Accomplishments:

• Expanded machining services beyond orthopedic implant components and instruments, into the defense industry.
• Shipped the first orders for precision machined products used by the U.S. Navy in the second quarter.
• Obtained a U.S. patent for an invention which improves the high-low pressure system in 40MM M212 casings used in military, law enforcement and other markets.
• Increased selling activity by expanded our network of authorized manufacturer’s representatives.
• Implemented a near-net molding and machining process for high value materials.

Outlook:

“The prospect for continued EBITDA improvement is strong, especially in light of the recent pro-growth, tax and regulatory environment in the United States. We believe that the recent increases in tariffs will have a minimal impact to our costs. Defense spending, along with foreign sales of defense articles has increased and we are seeing the direct result in our order backlog. Our capabilities and regulatory qualifications leave us well positioned to capitalize on opportunities in this industry. Micron has the available machine capacity to fuel our growth, and with our additional efforts in sales, the Company is well positioned to take advantage of our operating leverage and continue to improve earnings performance,“ concluded Mr. Emma.

About Micron Solutions, Inc.

Micron Solutions, Inc., through its wholly-owned subsidiary, Micron Products, Inc., is a diversified contract manufacturing organization that produces highly-engineered, innovative medical device components requiring precision machining and injection molding. The Company also manufactures components, devices and equipment for military, law enforcement, industrial and automotive applications. In addition, the Company is a market leader in the production and sale of silver/silver chloride coated and conductive resin sensors used as consumable component parts in the manufacture of integrated disposable electrophysiological sensors. The Company’s strategy for growth is to build a best-in-class contract manufacturer with a specialized focus on plastic injection molding and highly-engineered medical devices and components requiring precision machining.

The Company routinely posts news and other important information on its websites:

http://www.micronsolutionsinc.com and http://www.micronproducts.com

Safe Harbor Statement

Forward-looking statements made herein are based on current expectations of Micron Solutions, Inc. (“our” or the “Company”) that involve a number of risks and uncertainties and should not be considered as guarantees of future performance. The factors that could cause actual results to differ materially include our ability to obtain and retain order volumes from customers who represent significant proportions of net sales; our ability to maintain our pricing model, offset higher costs with price increases and/or decrease our cost of sales; variability of customer delivery requirements; the level of and ability to generate sales of higher margin products and services; our ability to manage our level of debt and provisions in the debt agreements which could make the Company sensitive to the effects of economic downturns and limit our ability to react to changes in the economy or our industry; failure to comply with financial and other covenants in our credit facility; reliance on revenues from exports and impact on financial results due to economic uncertainty or downturns in foreign markets; volatility in commodity and energy prices and our ability to offset higher costs with price increases; continued availability of supplies or materials used in manufacturing at competitive prices; variations in the mix of products sold; continued availability of supplies or materials used in manufacturing at competitive prices; and the amount and timing of investments in capital equipment, sales and marketing, engineering and information technology resources.  More information about factors that potentially could affect the Company's financial results is included in the Company's Annual Report on Form 10-K and other filings with the Securities and Exchange Commission.

For more information, contact:

Derek T. Welch
Chief Financial Officer
978.345.5000

FINANCIAL TABLE FOLLOWS.

MICRON SOLUTIONS, INC.
EBITDA RECONCILIATION ⁽¹⁾
($ in thousands)

<