Advanced Materials Group Reports First Quarter Results; ADMG Posts Loss of $0.00 Per Share, Compared to $0.03 Per Share in Previous Year Sales Down 14% For First Quarter.

Business Editors

RANCHO DOMINGUEZ, Calif.--(BUSINESS WIRE)--April 15, 2003

Advanced Materials Group, Inc. (OTCBB:ADMG) today reported decreased sales of 14% with a net loss for the first fiscal quarter ended February 28, 2003 of $16,000 or $0.00 per share compared to a net loss of $283,000 or $0.03 per share for the comparable period of fiscal 2002.

Net sales for the first quarter of fiscal 2003 were $7.5 million versus $8.7 million for the comparable period of fiscal 2002. Sales for the United States declined 7%, sales in Singapore declined 28% and sales in Ireland decreased 2%.

The net loss for the first quarter of fiscal 2003 was $16,000 compared to a net loss of $283,000 for the first quarter of fiscal 2002. The net loss in the U.S. improved by $335,000, the net income in Singapore declined by $130,000 and the net income in Ireland increased by $10,000.

Basic and diluted loss per share for the first quarter was $0.00 per share on an average of 8.7 million shares, compared to basic and diluted loss per share of $0.03 per share on the same number of shares in the comparable period of fiscal 2002.

Chief Executive Officer Comments on Results

Commenting on the results, Advanced Materials Group CEO and President, Steve Scott said, "While we are disappointed as a group to have had a loss of $16,000 on sales of $7,480,000, we are very encouraged by the progress that we have made in bringing the domestic operations towards profitability. If not for the unexpectedly large decline in sales in Singapore, which led to a $130,000 decline in profit for the first quarter 2003 compared to the first quarter 2002, we would have been profitable in our first quarter of fiscal 2003.

"We are committed to focusing on our overhead structure, product mix, and production methodologies in the U.S. to bring Domestic operations to stand alone profitability. Our operations in Ireland and Singapore are facing market fluctuations but are structured well to face these uncertainties."

Some statements contained in this press release are forward-looking statements that involve a number of risks and uncertainties. In addition to the factors discussed, the following are among other factors that could cause actual results to differ materially: general business conditions, competitive factors, concentration of sales in markets and customers, concentration of raw materials suppliers, delays or cancellations in orders, fluctuations in margins, timing of significant orders, and other risks and uncertainties outlined by management in the Company's most recent Form 10-K.

Advanced Materials Group, Inc. is a leading manufacturer and fabricator of specialty foams, foils, films and pressure-sensitive adhesive components for a broad base of customers in the computer, medical, automotive and aerospace industries both in the U.S. and abroad.

                    ADVANCED MATERIALS GROUP, INC.
                 CONSOLIDATED STATEMENTS OF OPERATIONS
                              (Unaudited)

                                           Three Months Ended
                                  February 28, 2003  February 28, 2002


Net sales                        $       7,480,000  $       8,660,000
Cost of sales                            6,498,000          7,861,000

Gross profit                               982,000            799,000

Operating expenses:
  Selling, general and
   administrative                          803,000            879,000
  Depreciation and amortization             67,000             84,000

Total operating expenses                   870,000            963,000

Income (loss) from operations              112,000           (164,000)
Other income (expense):
  Interest expense                         (95,000)           (99,000)
  Foreign exchange gain (loss)               6,000             (2,000)
  Other, net                               (27,000)           (10,000)

    Total other expenses, net             (116,000)          (111,000)

Loss before income taxes                    (4,000)          (275,000)
Income tax expense                         (12,000)            (8,000)

Net loss                         $         (16,000) $        (283,000)

Basic and diluted loss per common
 share                           $           (0.00) $           (0.03)

Basic and diluted weighted average
 common shares outstanding               8,671,272          8,671,272




                    ADVANCED MATERIALS GROUP, INC.
                      CONSOLIDATED BALANCE SHEETS
                February 28, 2003 and November 30, 2002

                                ASSETS
                              (Unaudited)

                                            February 28,  November 30,
                                               2003          2002

Current assets:
  Cash and cash equivalents                $    341,000  $    764,000
  Accounts receivable, net of allowance of
   $164,000 and $155,000 at February 28,
   2003 and November 30, 2002, respectively   5,196,000     5,464,000
  Inventories, net                            3,889,000     3,456,000
  Prepaid expenses and other                    385,000       143,000

    Total current assets                      9,811,000     9,827,000

Property and equipment, net                   2,292,000     2,485,000
Other assets                                    160,000       199,000

    Total assets                           $ 12,263,000  $ 12,511,000


                 LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
  Accounts payable                         $  5,416,000  $  4,387,000
  Accrued liabilities                           603,000       772,000
  Restructuring reserve, current                378,000       378,000
  Deferred income                               155,000        97,000
  Line of credit                              2,738,000     3,701,000
  Current portion of long-term obligations      562,000       599,000

    Total current liabilities                 9,852,000     9,934,000

  Convertible debentures                        405,000       405,000
  Deferred compensation, net of current
   portion                                    1,094,000     1,094,000
  Restructuring reserve, net of current
   portion                                      392,000       504,000
  Capital leases, net of current portion        105,000       143,000

    Total liabilities                        11,848,000    12,080,000
Commitments and contingencies
Stockholders' equity:
  Preferred stock-$.001 par value;
   5,000,000 shares authorized
   no shares issued and outstanding                 ---           ---
  Common stock-$.001 par value; 25,000,000
   shares authorized; 8,671,272 shares
   issued and outstanding at February 28,
   2003 and November 30, 2002                     9,000         9,000
  Additional paid-in capital                  7,083,000     7,083,000
  Accumulated deficit                        (6,677,000)   (6,661,000)

    Total stockholders' equity                  415,000       431,000

  Total liabilities and stockholders'
   equity                                  $ 12,263,000  $ 12,511,000