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Alpine 4 Announces its Q2 Revenue Grew by 63% Over Q1 2021 and its Gross Profit Dollars Increased by 425% over Q1 2021

PHOENIXAug. 16, 2021 /PRNewswire/ — Alpine 4 Holdings (OTCQB: ALPP), a leading operator and owner of small market businesses, announces revenue growth of 63% in Q2 over Q1 2021. The company’s consolidated gross profit dollars also grew by 425% in the quarter as well.  

“Dear Shareholders and Employees,

From the beginning, we founded our company to be different than the rest. Alpine 4 isn’t a company tethered with myopic products or services that have limited life spans. Rather, we set out to develop the nation’s premier platform for businesses to operate in and grant everyday investors all over the world to participate in something unique.  The blended investor make-up of retail investors and institutional investors of Alpine 4 is something to be admired.  I firmly believe that the path Alpine 4 is forging will change how we as investors look at public companies, and how investors choose to participate in their joint ownership.  When I founded Alpine 4 with Ian KantrowitzJeff HailCharlie Winters, and Shannon Rigney, I laid out a vision for a company with what I called a “generational business footprint.” That generational footprint is what we call DSF (Driver, Stabilizer, Facilitator).  If you want to learn more about DSF, you can find out more about it on our website, https://www.alpine4.com/organization/dsf/.  The DSF concept is unique as it lays out a path for our company to continuously be relevant in a fast-changing world for decades to come, if not perpetually.

Unpacking Q2 numbers:

Q2 Revenue Growth: Q2 gave way to spectacular quarterly revenue growth both organically and from acquisitions.

Organic Subsidiary Growth: In Q2, our organic growth from existing subsidiaries grew at a record rate of 13.86% over Q1 2021. This growth was in part led by our subsidiary, Quality Circuit Assembly, Inc. (QCA), which grew by 18.82% in Q2 over Q1 and was driven by strong demand from our electric car, truck, and health tech customers. In addition, our construction services companies also grew by 10%, which was led by returning demand from our educational and health care sectors.

Expanding Our Manufacturing and Defense Holdings Through Focused Acquisitions: In Q2, the company also made two acquisitions. Both were strategic in nature to allow the company to grow into different vertical markets, capitalize on a larger footprint in the contract manufacturing of health care products, and break into the defense services industry to expand our aerospace footprint. The combined acquisitions helped contribute to Alpine 4’s revenue growth of 63% over Q1 2021.

Gross Profit (GP): Our stellar revenue growth was only outmatched by our remarkable gross profit enhancement. Our gross profit dollars grew by 425% in Q2 from $755k to $4.0m, and while that number sounds impressive, the story it tells is profound.  In light of dramatic increases in material costs and shortages of labor within our construction services subsidiaries, our manufacturing subsidiaries Quality Circuit Assembly (QCA) and Alternative Laboratories (Alt Labs), produced fantastic results. QCA grew from 24% GP in Q1 to 28% in Q2. Alt Labs contributed 44% gross profit to the overall success of the quarter. As we move into Q3 and Q4, we anticipate our construction services subsidiaries’ material pricing to normalize and make even further improvements in our GP, which will ultimately drive net profit.

Research and Development Expenses (R&D): R&D expense for the quarter totaled $515k and was primarily derived from our subsidiary, Vayu Aerospace Corporation (VAYU). The development of the next generation US-1 combined with expanding the G1’s assembly line production will continue the demand for R&D expenditures into the foreseeable future. Further, over the next few quarters, the company will be allocating additional capital to enhance the company’s AI software package within our drone platforms. This continued investment aims to make VAYU the “go-to” drone company and its platforms of US-1 and G1, the premier airframes for micro and short-haul freight delivery.

G&A / Fixed Expense: The company recorded a net loss of $3.1m for Q2 2021. A deeper dive into the numbers show the company had significant one-time expenses in the quarter that included $1.1m in acquisition costs for Alternative Labs, LLC and Thermal Dynamics International, Inc. The company also completed a debt amortization schedule for 2020 notes, which was a non-cash expense of $635k, totaling $1.73m in combined one-time expenditures in Q2. When you add $951k in depreciation and amortization of non-cash-related expenses, the Q2 loss draws nearer to breakeven levels on an EBITDA schedule. It is also important to point out that during the first 90 days after acquiring a company, it is our policy to enact various changes that are typically expensed through the P&L, and it affects our net profit during those months, which was the case with Alternative Labs and Thermal Dynamics.  We expect their profit margins to increase dramatically in Q3 and Q4 as these changes are implemented.

Q3 Projections: 

It gives me great pleasure to state that our forward progress of revenue generation will continue to rise in Q3. The company anticipates generating $19.5 million to $21 million in Q3 2021 revenue, and that our gross profit will continue to rise as well. The company also projects that it will achieve net profitability in Q3 2021 while still investing heavily into our operational structure and continued R&D. I will add that these are projections, and at this point, many different factors can arise between now and the end of the quarter that can affect these earning projections.

To all of our shareholders, I know that I speak on behalf of the Executive Leadership Team and our 427 employees in saying that “we value you and are pleased to have you on this journey with us!”

Best regards,

Kent B. Wilson
CEO / President / Founder”

Ian Kantrowitz:  VP of IR
investorreleations@alpine4.com

Forward-Looking Statements:

The information disclosed in this press release is made as of the date hereof and reflects Alpine 4 most current assessment of its historical financial performance. Actual financial results filed with the SEC may differ from those contained herein due to timing delays between the date of this release and confirmation of final audit results. These forward-looking statements are not guarantees of future performance and are subject to uncertainties and other factors that could cause actual results to differ materially from those expressed in the forward-looking statements including, without limitation, the risks, uncertainties, including the uncertainties surrounding the current market volatility, and other factors the Company identifies from time to time in its filings with the SEC. Although Alpine 4 believes that the assumptions on which these forward-looking statements are based are reasonable, any of those assumptions could prove to be inaccurate and, as a result, the forward-looking statements based on those assumptions also could be incorrect. You should not place undue reliance on these forward-looking statements. The forward-looking statements contained in this release are made as of the date hereof, and Alpine 4 disclaims any intention or obligation to update the forward-looking statements for subsequent events.

SOURCE Alpine 4 Holdings, Inc.

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