Alpha Pro Tech, Ltd. (NYSE American: APT), a
leading manufacturer of products designed to protect people,
products and environments, including disposable protective apparel
and building products, today announced financial
results
for the three month period and year
ended December 31, 2023.
Lloyd Hoffman, President and Chief Executive
Officer of Alpha Pro Tech, commented, “We have experienced the six
highest quarters on record for the Building Supply segment over the
past eight quarters: the second, third, and fourth quarters of 2023
and the first, second and third quarters of 2022. These
achievements come despite the continued softness in the housewrap
market, as housing starts in 2023 in the United States decreased by
8.8%, compared to the same period a year ago. Management is
encouraged by the full year 22.2% increase in housewrap and
accessories sales, as we continue to significantly outperform the
market through diversification and product development. Sales of
our REX Wrap® and REX Wrap Plus®, our entry-level housewrap
products, were up by 15.1% over the prior year, despite the
decrease in housing starts, as we continue to form relationships
with new dealers.
Management expects to see continued growth
opportunities with REX™ Wrap Fortis, our premium housewrap line, as
we continue to make inroads into the multi-family and commercial
construction sector, evidenced by a 33.9% increase in sales for
this product in 2023. We also experienced a 180% increase in sales
of our housewrap accessories, REXTREME Window and Door Flashing and
REX™ Premium Seam Tape, in 2023. Management expects that we will
continue to see positive trends relative to the industry for both
our entry level and premium housewrap and housewrap accessories
product lines.
The synthetic roof underlayment market has also
been affected by the continued decrease in new home starts,
economic uncertainty, more offshore competition and a push in the
market to reduce product selling prices. Despite these pressures,
our synthetic roof underlayment sales also outperformed the market
despite being down 3.0% in 2023 compared to 2022. We launched our
new line of self-adhered roofing products in late 2023, which
management expects will result in revenue growth within our current
customer base and allow for expansion into new markets and business
segments. We continue to work closely with our customers to develop
and expand our product lines. Other woven material sales increased
by 18.0% in 2023 compared to the same period of 2022, due to
increased sales to our major customer, but management does not
expect this to be a growth driver in the coming year.”
Mr. Hoffman continued, “Sales of disposable
protective garments in 2023 were up by 4.0% as our channel partners
and end customers are continuing to work through their excess
inventory, which had accumulated as a result of the pandemic. Our
sales have been positively affected as we can now meet face-to-face
with our distribution partners and end customers, something we have
not been able to do since 2020. Disposable protective garment sales
in 2023 were up by approximately 19% as compared to pre-pandemic
levels. We expect continued growth for disposable protective
garments in 2024.
Face mask and face shield sales are still
suffering from the COVID-19 residual excess inventories at the
distributor level, but sales in the fourth quarter of 2023 showed
improvement and approximately doubled as compared to the prior
quarter. The market continues to be saturated with products, but
management is cautiously optimistic that face mask and face shield
sales will show growth in the coming year.”
2023 Results
Consolidated sales for the three months ended December
31, 2023 increased to $15.3 million, from $12.2 million
for the three months ended December 31, 2022, representing an
increase of $3.0 million, or 24.9%. This increase consisted of
higher sales in the Building Supply segment of $3.5 million,
partially offset by decreased sales in the Disposable Protective
Apparel segment of $460,000.
Building Supply segment sales
for the three months ended December 31, 2023, increased by $3.5
million, or 55.7%, to $9.8 million, compared to $6.3 million for
the three months ended December 31, 2022. The Building Supply
segment increase during the three months ended December 31, 2023
was primarily due to a 61.9% increase in sales of housewrap, a
35.2% increase in sales of synthetic roof underlayment and a
$661,000 increase in sales of other woven material compared to
the same period of 2022.
The sales mix of the Building Supply segment for
the three months ended December 31, 2023 was approximately 42% for
synthetic roof underlayment, 52% for housewrap and 6% for other
woven material. This compared to approximately 49% for synthetic
roof underlayment, 51% for housewrap and 0% for other woven
material for the three months ended December 31, 2022.
Disposable Protective Apparel
segment sales for the three months ended December 31, 2023
decreased by $460,000, or 7.7%, to $5.5 million, compared to $5.9
million for the same period of 2022. This segment decrease was due
to a 5.6% decrease in sales of disposable protective garments, a
11.0% decrease in sales of face masks and a 33.9% decrease in sales
of face shields.
The sales mix of the Disposable Protective
Apparel segment for the three months ended December 31, 2023 was
approximately 85% for disposable protective garments, 11% for face
masks and 4% for face shields. This sales mix is compared to
approximately 83% for disposable protective garments, 12% for face
masks and 5% for face shields for the three months ended December
31, 2022.
Consolidated sales for the year ended
December 31, 2023, decreased to $61.2 million, from $62.0
for the year ended December 31, 2022, representing a decrease of
$749,000, or 1.2%. This decrease consisted of decreased sales in
the Disposable Protective Apparel segment of $4.2 million,
partially offset by increased sales in the Building Supply segment
of $3.5 million.
Building Supply segment sales
for the year ended December 31, 2023 increased by $3.5 million, or
9.4%, to a record sales year of $40.4 million, compared to $36.9
million for the year ended December 31, 2023. The Building Supply
segment increase during the year ended December 31, 2023 was
primarily due to a 22.2% increase in sales of housewrap and a 18.0%
increase in sales of other woven material, partially offset by a
3.0% decrease in sales of synthetic roof underlayment and an
increase in rebates compared to the same period of 2022.
The sales mix of the Building Supply segment for
the year ended December 31, 2023 was approximately 42% for
synthetic roof underlayment, 47% for housewrap and 11% for other
woven material. This compared to approximately 47% for synthetic
roof underlayment, 43% for housewrap and 10% for other woven
material for the year ended December 31, 2022.
Disposable Protective Apparel
segment sales for the year ended December 31, 2023
decreased by $4.2 million, or 16.8%, to $20.8 million, compared to
$25.0 million for 2022. This segment decrease was due to a 4.0%
increase in sales of disposable protective garments that was more
than offset by a 62.3% decrease in sales of face masks and a 75.5%
decrease in sales of face shields.
The sales mix of the Disposable Protective
Apparel segment for the year ended December 31, 2023 was
approximately 88% for disposable protective garments, 9% for face
masks and 3% for face shields. This sales mix is compared to
approximately 71% for disposable protective garments, 19% for face
masks and 10% for face shields for the year ended December 31,
2022.
Gross Profit
Gross profit decreased by $895,000, or 18.6%, to
$5.7 million for the three months ended December 31, 2023, from
$4.8 million for the three months ended December 31, 2022. The
gross profit margin was 37.4% for the three months ended December
31, 2023, compared to 39.4% for the three months ended December 31,
2022.
Gross profit increased by $1.1 million or 5.3%,
to $22.8 million for the year ended December 31, 2023, from $21.7
million for the year ended December 31, 2022. The gross profit
margin was 37.3% for the year ended December 31, 2023, compared to
35.0% for the year ended December 31, 2022.
The gross profit margin in 2023 was positively
affected by ocean freight rates that have come down since the
latter part of 2022. Management expects the gross profit margin to
be in a similar range in 2024, although gross margin could be
negatively affected by the ongoing wars in Ukraine and the middle
east, which have resulted in increased freight rates.
Selling, General and Administrative
Expenses
Selling, general and administrative expenses
increased by $619,000, or 16.0%, to $4.5 million for the three
months ended December 31, 2023, from $3.9 million for the three
months ended December 31, 2022. As a percentage of net sales,
selling, general and administrative expenses decreased to 29.5% for
the three months ended December 31, 2023, from 31.7% for the same
period of 2022.
The increase in selling, general and
administrative expenses for the quarter ended December 31, 2023 was
primarily due to an increase in Building Supply segment expenses
related to increased employee compensation, sales commission,
insurance expenses and general factory expenses. In addition,
corporate unallocated expenses increased due to increased employee
compensation, bonuses and stock option and restricted stock
expense.
Selling, general and administrative expenses
increased by $1.6 million, or 9.6%, to $17.8 million for the year
ended December 31, 2023, from $16.2 million for the year ended
December 31, 2022. As a percentage of net sales, selling, general
and administrative expenses increased to 29.0% for the year ended
December 31, 2023, from 26.2% for 2022.
The increase in selling, general and
administrative expenses of $1.6 million for the year ended December
31, 2023 was primarily due to an increase in Building Supply
segment expenses of $1.2 million, related to increased employee
compensation due to a larger sales team and increased factory
indirect staff, sales commission, sales travel and insurance
expenses and general factory expenses. Corporate unallocated
expenses increased due to increased employee compensation, accrued
bonuses, stock option and restricted stock expenses, professional
fees, and general office expenses, partially offset by decreased
insurance expenses.
Income from Operations
Income from operations increased by $211,000, or
27.8%, to $1.0 million for the three months ended December 31,
2023, compared to $760,000 for the three months ended December 31,
2022. The increase in income from operations was primarily due to
an increase in gross profit of $895,000, partially offset by an
increase in selling, general and administrative expenses of
$619,000 and an increase in depreciation and amortization expense
of $65,000. Income from operations as a percentage of net sales for
the three months ended December 31, 2023 was 6.4%, compared to 6.2%
for the same period of 2022.
Income from operations decreased by $518,000, or
11.1%, to $4.1 million for the year ended December 31, 2023,
compared to $4.6 million for the year ended December 31, 2022. The
decreased income from operations was primarily due to an increase
in selling, general and administrative expenses of $1.6 million and
an increase in depreciation and amortization expense of $111,000,
partially offset by an increase in gross profit of $1.1 million.
Income from operations as a percentage of net sales for the year
ended December 31, 2023 was 6.7%, compared to 7.5% for 2022.
Other Income
Other income increased by $243,000, or 222.9%,
to $352,000 for the three months ended December 31, 2023, from
$109,000 for the three months ended December 31, 2022. The increase
was due to an increase in interest income of $158,000 and an
increase in equity in income of unconsolidated affiliate of
$85,000.
Other income increased by $1.5 million to income
of $1.3 million for the year ended December 31, 2023, from a loss
of $255,000 for 2022. The increase was primarily due to an increase
in equity in income of unconsolidated affiliate of $390,000 and an
increase in interest income of $668,000. In addition, there was a
loss on fixed assets of $490,000 in 2022 due to equipment for the
Disposable Protective Apparel segment that was not delivered.
Net Income
Net income for the three months ended December
31, 2023 was $1.1 million, compared to net income of $564,000 for
the three months ended December 31, 2022, representing an increase
of $497,000, or 88.1%. Net income as a percentage of net sales for
the three months ended December 31, 2023 was 7.0%, and net income
as a percentage of net sales for the same period of 2022 was 4.6%.
Basic and diluted earnings per common share for the three months
ended December 31, 2023, and 2022 were $0.09 and $0.05,
respectively.
Net income for the year ended December 31, 2023
was $4.2 million compared to net income of $3.3 million for 2022,
representing an increase of $907,000, or 27.6%. The net income
increase between 2023 and 2022 was due to an increase in income
before provision for income taxes of $1.0 million, partially offset
by an increase in provision for income taxes of $123,000. Net
income as a percentage of net sales for the year ended December 31,
2023 was 6.8%, and net income as a percentage of net sales for 2022
was 5.3%. Basic and diluted earnings per common share for the years
ended December 31, 2023 and 2022 were $0.35 and $0.26,
respectively.
Balance Sheet
As of December 31, 2023, the Company had cash
and cash equivalents of $20.4 million compared to $16.3 million as
of December 31, 2022. Working capital totaled $50.5 million and the
Company’s current ratio was 21:1, compared to a current ratio of
22:1 as of December 31, 2022.
Inventory decreased by $4.3 million or 17.5%, to
$20.1 million as of December 31, 2023, from $24.4 million as of
December 31, 2022. The decrease was due to a decrease in inventory
for the Disposable Protective Apparel segment of $1.2 million, or
8.5%, to $13.2 million and a decrease in inventory for the Building
Supply segment of $3.0 million, or 30.4%, to $7.0 million.
Colleen McDonald, Chief Financial Officer,
commented, “As of December 31, 2023, we had $2.2 million available
for stock purchases under our stock repurchase program. During the
year ended December 31, 2023, we repurchased 951,010 shares of
common stock at a cost of $4.0 million. As of December 31, 2023, we
had repurchased a total of approximately 20.4 million shares of
common stock at a cost of approximately $50.3 million through our
repurchase program. We retire all stock upon repurchase and future
repurchases are expected to be funded from cash on hand and cash
flows from operating activities.”
About Alpha Pro Tech, Ltd.Alpha
Pro Tech, Ltd. is the parent company of Alpha Pro Tech, Inc. and
Alpha ProTech Engineered Products, Inc. Alpha Pro Tech, Inc.
develops, manufactures and markets innovative disposable and
limited-use protective apparel products for the industrial, clean
room, medical and dental markets. Alpha ProTech Engineered
Products, Inc. manufactures and markets a line of construction
weatherization products, including building wrap and roof
underlayment. The Company has manufacturing facilities in Salt Lake
City, Utah; Nogales, Arizona; Valdosta, Georgia; and a joint
venture in India. For more information and copies of all news
releases and financials, visit Alpha Pro Tech’s website at
http://www.alphaprotech.com.
Certain statements made in this press release
constitute “forward-looking statements” within the meaning of the
safe harbor provisions of the Private Securities Litigation Reform
Act of 1995. Forward-looking statements include any statement that
may predict, forecast, indicate or imply future results,
performance or achievements instead of historical facts and may be
identified generally by the use of forward-looking terminology and
words such as “expects,” “anticipates,” “estimates,” “believes,”
“predicts,” “intends,” “plans,” “potentially,” “may,” “continue,”
“should,” “will” and words of similar meaning. Without limiting the
generality of the preceding statement, all statements in this press
release relating to estimated and projected
earnings, expectations regarding order volume, timing of
fulfillment of orders, production capacity and our plans to
ramp up production and expand capacity, product
demand, availability of raw materials and supply chain access,
margins, costs, expenditures, cash flows, sources of capital,
growth rates and future financial and operating results are
forward-looking statements. We caution investors that any such
forward-looking statements are only estimates based on current
information and involve risks and uncertainties that may cause
actual results to differ materially from the results contained in
the forward-looking statements. We cannot give assurances that any
such statements will prove to be correct. Factors that could cause
actual results to differ materially from those estimated by us
include the risks, uncertainties and assumptions described from
time to time in our public releases and reports filed with the
Securities and Exchange Commission, including, but not limited to,
our most recent Annual Report on Form 10-K and Quarterly Report on
Form 10-Q. Specifically, these factors include, but are not
limited to, changes in global economic conditions; the inability of
our suppliers and contractors to meet our requirements; potential
challenges related to international manufacturing; our partnership
with a joint venture partner; the inability to protect our
intellectual property; competition in our industry; customer
preferences; the timing and market acceptance of new product
offerings; security breaches or disruptions to the information
technology infrastructure; the impact of legal and regulatory
proceedings or compliance challenges; and volatility in our common
stock price and our investments. We also caution investors
that the forward-looking information described herein represents
our outlook only as of this date, and we undertake no obligation to
update or revise any forward-looking statements to reflect events
or developments after the date of this press release. Given these
uncertainties, investors should not place undue reliance on
forward-looking statements as a prediction of actual results.
-- Tables follow --
Consolidated Balance Sheets
|
|
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|
|
|
|
|
|
|
December 31, |
|
December 31, |
|
|
|
|
|
|
|
|
|
2023 |
|
|
|
2022 |
|
|
Assets |
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
Cash and cash equivalents |
$ |
20,378,000 |
|
|
$ |
16,290,000 |
|
|
|
Accounts receivable, net |
|
|
5,503,000 |
|
|
|
5,382,000 |
|
|
|
Accounts receivable, related party |
|
1,042,000 |
|
|
|
1,591,000 |
|
|
|
Inventories, net |
|
20,131,000 |
|
|
|
24,397,000 |
|
|
|
Prepaid expenses |
|
6,010,000 |
|
|
|
4,902,000 |
|
|
|
|
|
Total current assets |
|
53,064,000 |
|
|
|
|
52,562,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Property and equipment, net |
|
5,587,000 |
|
|
|
5,742,000 |
|
|
Goodwill |
|
|
55,000 |
|
|
|
55,000 |
|
|
Definite-lived intangible assets, net |
|
- |
|
|
|
1,000 |
|
|
Right-of-use assets |
|
4,810,000 |
|
|
|
1,725,000 |
|
|
Equity investment in unconsolidated affiliate |
|
5,247,000 |
|
|
|
4,718,000 |
|
|
|
|
|
Total assets |
$ |
68,763,000 |
|
|
|
$ |
64,803,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Shareholders' Equity |
|
|
|
|
Current liabilities: |
|
|
|
|
|
Accounts payable |
$ |
802,000 |
|
|
$ |
674,000 |
|
|
|
Accrued liabilities |
|
1,103,000 |
|
|
|
833,000 |
|
|
|
Lease liabilities |
|
661,000 |
|
|
|
899,000 |
|
|
|
|
|
Total current liabilities |
|
2,566,000 |
|
|
|
|
2,406,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Lease liabilities, net of current portion |
|
4,187,000 |
|
|
|
875,000 |
|
|
Deferred income tax liabilities, net |
|
442,000 |
|
|
|
764,000 |
|
|
|
|
|
Total liabilities |
|
7,195,000 |
|
|
|
4,045,000 |
|
|
Commitments and contingencies |
|
|
|
|
Shareholders' equity: |
|
|
|
|
|
Common stock, $.01 par value: 50,000,000 shares authorized; |
|
|
|
|
|
|
11,416,212 and 12,226,306 shares outstanding as of |
|
|
|
|
|
|
December 31, 2023 and December 31, 2022, respectively |
|
114,000 |
|
|
|
123,000 |
|
|
|
Additional paid-in capital |
|
16,339,000 |
|
|
|
17,099,000 |
|
|
|
Retained earnings |
|
46,552,000 |
|
|
|
45,025,000 |
|
|
|
Accumulated other comprehensive loss |
|
(1,437,000 |
) |
|
|
(1,489,000 |
) |
|
|
|
|
Total shareholders' equity |
|
61,568,000 |
|
|
|
60,758,000 |
|
|
|
|
|
Total liabilities and shareholders' equity |
$ |
68,763,000 |
|
|
$ |
64,803,000 |
|
|
|
Consolidated Statements of
Income
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Three Months Ended |
|
Year Ended |
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|
December 31, |
|
December 31, |
|
|
|
|
|
|
|
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales |
|
$ |
15,265,000 |
|
$ |
12,225,000 |
|
$ |
61,232,000 |
|
$ |
61,981,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods sold, excluding depreciation |
|
|
|
|
|
|
|
|
|
and amortization |
|
9,559,000 |
|
|
7,414,000 |
|
|
38,403,000 |
|
|
40,298,000 |
|
|
|
|
|
|
|
Gross profit |
|
5,706,000 |
|
|
4,811,000 |
|
|
22,829,000 |
|
|
21,683,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
Selling, general and administrative |
|
4,497,000 |
|
|
3,878,000 |
|
|
17,772,000 |
|
|
16,219,000 |
|
|
|
Depreciation and amortization |
|
238,000 |
|
|
173,000 |
|
|
925,000 |
|
|
814,000 |
|
|
|
|
|
|
|
Total operating expenses |
|
4,735,000 |
|
|
4,051,000 |
|
|
18,697,000 |
|
|
17,033,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from operations |
|
|
971,000 |
|
|
760,000 |
|
|
4,132,000 |
|
|
4,650,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expenses): |
|
|
|
|
|
|
|
|
|
Equity in income of unconsolidated affiliate |
|
85,000 |
|
|
- |
|
|
477,000 |
|
|
87,000 |
|
|
|
Impairment on deposit |
|
- |
|
|
- |
|
|
- |
|
|
(490,000 |
) |
|
|
Interest income, net |
|
267,000 |
|
|
109,000 |
|
|
816,000 |
|
|
148,000 |
|
|
|
|
|
|
|
Total other income (loss), net |
|
352,000 |
|
|
109,000 |
|
|
1,293,000 |
|
|
(255,000 |
) |
|
Income before provision |
|
|
|
|
|
|
|
|
|
for income taxes |
|
1,323,000 |
|
|
869,000 |
|
|
5,425,000 |
|
|
4,395,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income taxes |
|
262,000 |
|
|
305,000 |
|
|
1,236,000 |
|
|
1,113,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
$ |
1,061,000 |
|
$ |
564,000 |
|
$ |
4,189,000 |
|
$ |
3,282,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per common share |
$ |
0.09 |
|
$ |
0.05 |
|
$ |
0.35 |
|
$ |
0.26 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per common share |
$ |
0.09 |
|
$ |
0.05 |
|
$ |
0.35 |
|
$ |
0.26 |
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Basic weighted average common shares outstanding |
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11,506,261 |
|
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12,354,564 |
|
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11,856,356 |
|
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12,713,533 |
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Diluted weighted average common shares outstanding |
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11,578,557 |
|
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12,403,455 |
|
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11,856,356 |
|
|
12,781,004 |
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XXX
| Company Contact: |
Investor Relations Contact: |
| Alpha Pro Tech,
Ltd. |
HIR Holdings |
| Donna Millar |
Cameron Donahue |
| 905-479-0654 |
651-707-3532 |
|
e-mail: ir@alphaprotech.com |
e-mail: cameron@hirholdings.com |
Alpha Pro Tech (AMEX:APT)
Historical Stock Chart
From Mar 2024 to Apr 2024
Alpha Pro Tech (AMEX:APT)
Historical Stock Chart
From Apr 2023 to Apr 2024
