Alpha Pro Tech, Ltd. Announces Financial Results for the Second Quarter Ended June 30, 2021
Alpha Pro Tech reported a net sales decline of 30.2% for Q2 2021, totaling $17.8 million, down from $25.5 million a year ago. The Disposable Protective Apparel segment saw a significant drop of 55.6%, primarily due to decreased demand for face masks and shields, although disposable protective garment sales surged by 36.3%. The Building Supply segment grew by 31.5%, highlighting continued demand. Net income fell to $1.8 million from $6.2 million, with EPS at $0.12 versus $0.46 in Q2 2020. The company holds $15.5 million in cash and zero debt, but faces challenges from rising costs and changing market dynamics.
- Disposable protective garments sales increased by 36.3%, indicating strong demand.
- Building Supply segment sales rose by 31.5%, driven by home construction demand.
- No debt, with a strong current ratio of 19:1, indicating financial stability.
- Commitment to invest $4.0 million to increase production capacity in the Building Supply segment.
- Overall net sales decreased by 30.2%, indicating a significant drop in revenue.
- Disposable Protective Apparel sales fell by 55.6%, primarily due to reduced demand for masks and shields.
- Net income decreased by 73.1%, reflecting declining profitability.
- Gross profit margin fell to 35.0%, down from 49.5% a year ago, due to product mix changes.
Overall Net Sales Down
Disposable Protective Garment Sales Increased by
Building Supply Segment Sales Increased by
- Net sales for the second quarter of 2021 were
$17.8 million , down30.2% , compared to$25.5 million for the second quarter of 2020.- Disposable Protective Apparel segment sales decreased
55.6% , to$8.0 million , compared to$18.0 million for the same period of 2020.- Sales for disposable protective garments in the second quarter of 2021 were a quarterly record and increased by
36.3% from the same period of 2020.
- Sales for disposable protective garments in the second quarter of 2021 were a quarterly record and increased by
- Building Supply segment sales increased
$2.3 million or31.5% , to$9.8 million , compared to$7.5 million for the three months ended June 30, 2020.
- Disposable Protective Apparel segment sales decreased
- Net income for the second quarter of 2021 was
$1.7 million , or$0.12 per diluted share, compared to$6.2 million , or$0.46 per diluted share, for the second quarter of 2020 - Cash was
$15.5 million and working capital was$50.1 million with no debt as of June 30, 2021.
NOGALES, Ariz., Aug. 04, 2021 (GLOBE NEWSWIRE) -- 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 and six months ended June 30, 2021.
Lloyd Hoffman, President and Chief Executive Officer of Alpha Pro Tech, commented, “Through the second quarter, we witnessed the softening in demand for our N-95 particulate respirator face mask and face shield sales, consistent with our guidance provided in our first quarter earnings release. Sales for these products declined to be more in line with pre-pandemic quarterly levels and we currently expect similar trends going forward. There is a potential for mask sales to increase again as a result of the recent increased spread of Covid-19, primarily due to the Delta variant. However, due to the inherent uncertainty of the unprecedented and rapidly evolving situation, we are unable to predict with any certainty the likelihood of this on our future operations.”
“Record sales for disposable protective garments in the second quarter of 2021 increased
Our Building Supply segment sales remained strong in the second quarter of 2021 with an increase of
Our optimism for continued growth in the Building Supply segment remains high as open orders for our synthetic roof underlay and housewrap remain very strong. As a result of our continued optimism, we have committed to increasing production capacity of this segment by investing approximately
Net Sales
Consolidated sales for the three months ended June 30, 2021, decreased to
Sales for the Disposable Protective Apparel segment for the three months ended June 30, 2021, decreased by
The sales mix of the Disposable Protective Apparel segment for the three months ended June 30, 2021 was approximately
Building Supply segment sales for the three months ended June 30, 2021, increased by
The sales mix of the Building Supply segment for the three months ended June 30, 2021, was approximately
Consolidated sales for the six months ended June 30, 2021, decreased to
Sales for the Disposable Protective Apparel segment for the six months ended June 30, 2021, decreased by
The sales mix of the Disposable Protective Apparel segment for the six months ended June 30, 2021 was
Building Supply segment sales for the six months ended June 30, 2021, increased by
The sales mix of the Building Supply segment for the six months ended June 30, 2021 was
Gross Profit
Gross profit decreased by
Gross profit decreased by
Management believes that gross profit margin has been and will continue to be negatively affected in 2021 as a result of changes in product mix as the need for face masks and face shields, which have a higher gross profit margin than our other products, declines from the surge in customer demand in 2020 as a result of the COVID-19 pandemic. In addition, our portfolio of products, as well as a spectrum of industries worldwide, have been affected by increases in raw material costs, as well as significant increases in ocean freight and other transportation costs. In the current environment, cost increases may rise more rapidly than our sales prices, which could decrease gross profit.
Selling, General and Administrative Expenses
Selling, general and administrative expenses decreased by
Selling, general and administrative expenses increased by
Income from Operations
Income from operations decreased by
Income from operations decreased by
Net Income
Net income for the three months ended June 30, 2021 was
Net income for the six months ended June 30, 2021 was
Balance Sheet
As of June 30, 2021, the Company had cash of
Inventory increased by
Colleen McDonald, Chief Financial Officer, commented, “During the three months ended June 30, 2021, we repurchased 150,000 shares of common stock at a cost of
The Company currently has no outstanding debt and believes that the current cash balance will be sufficient to satisfy projected working capital needs and planned capital expenditures for the foreseeable future. The Company has made approximately
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 effects of the COVID-19 pandemic on our business and operations, the business and operations of those within our supply chain and global economic conditions generally; changes in order volume by our customers; 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 --
| Condensed Consolidated Balance Sheets (Unaudited) | |||||
| June 30, | December 31, | ||||
| 2021 | 2020 (1) | ||||
| Assets | |||||
| Current assets: | |||||
| Cash and cash equivalents | $ | 15,538,000 | $ | 23,292,000 | |
| Accounts receivable, net of allowance for doubtful accounts of | |||||
| 6,079,000 | 8,132,000 | ||||
| Accounts receivable, related party | 997,000 | 905,000 | |||
| Inventories, net | 21,997,000 | 16,749,000 | |||
| Prepaid expenses | 8,360,000 | 6,225,000 | |||
| Total current assets | 52,971,000 | 55,303,000 | |||
| Property and equipment, net | 5,422,000 | 4,353,000 | |||
| Goodwill | 55,000 | 55,000 | |||
| Definite-lived intangible assets, net | 5,000 | 7,000 | |||
| Right-of-use assets | 3,094,000 | 3,535,000 | |||
| Equity investment in unconsolidated affiliate | 6,059,000 | 5,549,000 | |||
| Total assets | $ | 67,606,000 | $ | 68,802,000 | |
| Liabilities and Shareholders' Equity | |||||
| Current liabilities: | |||||
| Accounts payable | $ | 642,000 | $ | 1,983,000 | |
| Accrued liabilities | 1,240,000 | 2,793,000 | |||
| Customer advance payments of orders | 103,000 | 209,000 | |||
| Lease liabilities | 876,000 | 867,000 | |||
| Total current liabilities | 2,861,000 | 5,852,000 | |||
| Lease liabilities, net of current portion | 2,272,000 | 2,719,000 | |||
| Deferred income tax liabilities, net | 211,000 | 211,000 | |||
| Total liabilities | 5,344,000 | 8,782,000 | |||
| Commitments | |||||
| Shareholders' equity: | |||||
| Common stock, $.01 par value: 50,000,000 shares authorized; | |||||
| 13,208,341 and 13,419,847 shares outstanding as of | |||||
| June 30, 2021 and December 31, 2020, respectively | 132,000 | 135,000 | |||
| Additional paid-in capital | - | 409,000 | |||
| Retained earnings | 62,130,000 | 59,476,000 | |||
| Total shareholders' equity | 62,262,000 | 60,020,000 | |||
| Total liabilities and shareholders' equity | $ | 67,606,000 | $ | 68,802,000 | |
| 1) | The condensed consolidated balance sheet as of December 31, 2020 has been prepared using information from the audited consolidated balance sheet as of that date. |
| Condensed Consolidated Statements of Income (Unaudited) | ||||||||||||
| For the Three Months Ended | For the Six Months Ended | |||||||||||
| June 30, | June 30, | |||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||
| Net sales | $ | 17,806,000 | $ | 25,500,000 | $ | 40,967,000 | $ | 43,654,000 | ||||
| Cost of goods sold, excluding depreciation | ||||||||||||
| and amortization | 11,574,000 | 12,887,000 | 25,556,000 | 22,487,000 | ||||||||
| Gross profit | 6,232,000 | 12,613,000 | 15,411,000 | 21,167,000 | ||||||||
| Operating expenses: | ||||||||||||
| Selling, general and administrative | 4,199,000 | 4,553,000 | 8,777,000 | 8,656,000 | ||||||||
| Depreciation and amortization | 203,000 | 178,000 | 401,000 | 360,000 | ||||||||
| Total operating expenses | 4,402,000 | 4,731,000 | 9,178,000 | 9,016,000 | ||||||||
| Income from operations | 1,830,000 | 7,882,000 | 6,233,000 | 12,151,000 | ||||||||
| Other income: | ||||||||||||
| Equity in income of unconsolidated affiliate | 188,000 | 119,000 | 510,000 | 206,000 | ||||||||
| Gain /(Loss) on marketable securities | - | 41,000 | - | (18,000 | ) | |||||||
| Interest income, net | - | - | 1,000 | 16,000 | ||||||||
| Total other income | 188,000 | 160,000 | 511,000 | 204,000 | ||||||||
| Income before provision for income taxes | 2,018,000 | 8,042,000 | 6,744,000 | 12,355,000 | ||||||||
| Provision for income taxes | 347,000 | 1,822,000 | 1,354,000 | 794,000 | ||||||||
| Net income | $ | 1,671,000 | $ | 6,220,000 | $ | 5,390,000 | $ | 11,561,000 | ||||
| Basic earnings per common share | $ | 0.13 | $ | 0.47 | $ | 0.41 | $ | 0.87 | ||||
| Diluted earnings per common share | $ | 0.12 | $ | 0.46 | $ | 0.40 | $ | 0.84 | ||||
| Basic weighted average common shares outstanding | 13,246,676 | 13,351,675 | 13,294,571 | 13,351,674 | ||||||||
| Diluted weighted average common shares outstanding | 13,511,497 | 13,651,995 | 13,621,101 | 13,813,094 | ||||||||
| 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 |
FAQ
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