Alpha Pro Tech, Ltd. Announces First Quarter 2023 Financial Results
Disposable Protective Garment Sales Increased by
- Net sales for the first quarter of 2023 were
$13.8 million , down21.9% , compared to$17.7 million for the first quarter of 2022.
- Building Supply segment sales decreased by
$1.6 million , or15.7% , to$8.6 million , compared to$10.2 million for the three months ended March 31, 2022. - Disposable Protective Apparel segment sales decreased by
$2.3 million , or30.4% , to$5.2 million , compared to$7.4 million for the same period of 2022. - Disposable protective garment sales increased by
10.6% to$4.4 million , up from$4.0 million in the first quarter of 2022.
- Building Supply segment sales decreased by
- Cash of
$13.8 million and working capital of$50.1 million , with no debt, as of March 31, 2023
NOGALES, Ariz., May 09, 2023 (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 month period ended March 31, 2023.
Lloyd Hoffman, President and Chief Executive Officer of Alpha Pro Tech, commented, “The Building Supply segment showed some weakness in sales in the first quarter of 2023, due to a significant decrease in demand for new home starts as a result of interest rate hikes and economic uncertainty, as well as high levels of inventory on the dealer and distributor side. In the first quarter of 2023, single family housing starts were down
Synthetic roof underlayment sales have been significantly affected by the factors mentioned above as well as a push in the market to reduce product selling prices. Synthetic roof underlayment sales were down
There is uncertainty in the economy in relation to interest rates and a possible recession and the continued slowdown in building that could impact the Building Supply segment, but we are encouraged regarding the future growth potential for this segment.”
“Sales of disposable protective garments in the first quarter of 2023 were up
During the three months ended March 31, 2023, our Disposable Protective Apparel segment sales and marketing team presented at numerous national trade shows and distributor meetings for the first time in three years. We are at a point where our team is now directly interacting with our channel partners and end-customers on a regular basis. We are also engaged in many product demonstrations and evaluations in the marketplace. To that end, we just signed an agreement with a larger channel partner and together, we expect to open new doors leading to organic growth,” concluded Hoffman.
Net sales
Consolidated sales for the quarter ended March 31, 2023 decreased to
Building Supply Segment:
Building Supply segment sales for the quarter ended March 31, 2023 decreased by
The sales mix of the Building Supply segment for the quarter ended March 31, 2023 was approximately
Disposable Protective Apparel Segment:
Sales for the Disposable Protective Apparel segment for the quarter ended March 31, 2023 decreased by
The sales mix of the Disposable Protective Apparel segment for the quarter ended March 31, 2023 was approximately
Gross profit
Gross profit decreased by
The gross profit margin is being negatively affected by inventory purchased during last year, which incurred high ocean freight and other transportation costs. Ocean freight rates have come down significantly since the latter part of the fourth quarter but our lower cost inventory will start to be sold in the coming months. Management expects the gross profit margin to improve in 2023, although continuing inflationary pressures could affect such improvements.
Selling, General and Administrative Expenses
Selling, general and administrative expenses increased by
The change in expenses by segment for the quarter ended March 31, 2023 was as follows: Disposable Protective Apparel was up
Income from Operations
Income from operations decreased by
Other Income
Other income increased by
Net Income
Net income for the quarter ended March 31, 2023 was
Balance Sheet
As of March 31, 2023, the Company had cash and cash equivalents (“cash”) of
Inventory decreased by
Colleen McDonald, Chief Financial Officer, commented, “During the three months ended March 31, 2023, we repurchased 200,000 shares of common stock under our stock repurchase program 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.
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. Specifically, these factors include, but are not limited to, our exposure to foreign currency exchange risks related to our unconsolidated affiliate operations in India; potential failure to remediate the material weakness in our internal controls; our partnership with a joint venture partner; 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; the inability to protect our intellectual property; competition in our industry; customer preferences; the timing and market acceptance of new product offerings; changes in global economic conditions; security breaches or disruptions to the information technology infrastructure; risks related to climate change and natural disasters or other events beyond our control; 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)
| March 31, | December 31, | |||||||||
| 2023 | 2022 (1) | |||||||||
| Assets | ||||||||||
| Current assets: | ||||||||||
| Cash and cash equivalents | $ | 13,821,000 | $ | 16,290,000 | ||||||
| Accounts receivable, net of allowance for doubtful accounts of | ||||||||||
| 8,406,000 | 5,382,000 | |||||||||
| Accounts receivable, related party | 726,000 | 1,591,000 | ||||||||
| Inventories | 24,094,000 | 24,397,000 | ||||||||
| Prepaid expenses | 4,712,000 | 4,902,000 | ||||||||
| Total current assets | 51,759,000 | 52,562,000 | ||||||||
| Property and equipment, net | 5,788,000 | 5,742,000 | ||||||||
| Goodwill | 55,000 | 55,000 | ||||||||
| Definite-lived intangible assets, net | 1,000 | 1,000 | ||||||||
| Right-of-use assets | 1,488,000 | 1,725,000 | ||||||||
| Equity investment in unconsolidated affiliate | 4,964,000 | 4,718,000 | ||||||||
| Total assets | $ | 64,055,000 | $ | 64,803,000 | ||||||
| Liabilities and Shareholders' Equity | ||||||||||
| Current liabilities: | ||||||||||
| Accounts payable | $ | 383,000 | $ | 674,000 | ||||||
| Accrued liabilities | 387,000 | 833,000 | ||||||||
| Lease liabilities | 903,000 | 899,000 | ||||||||
| Total current liabilities | 1,673,000 | 2,406,000 | ||||||||
| Lease liabilities, net of current portion | 632,000 | 875,000 | ||||||||
| Deferred income tax liabilities, net | 764,000 | 764,000 | ||||||||
| Total liabilities | 3,069,000 | 4,045,000 | ||||||||
| Commitments and contingencies | ||||||||||
| Shareholders' equity: | ||||||||||
| Common stock, $.01 par value: 50,000,000 shares authorized; | ||||||||||
| 12,135,556 and 12,226,306 shares outstanding as of | ||||||||||
| March 31, 2023 and December 31, 2022, respectively | 122,000 | 123,000 | ||||||||
| Retained earnings | 62,216,000 | 62,124,000 | ||||||||
| Accumulated other comprehensive loss | (1,352,000 | ) | (1,489,000 | ) | ||||||
| Total shareholders' equity | 60,986,000 | 60,758,000 | ||||||||
| Total liabilities and shareholders' equity | $ | 64,055,000 | $ | 64,803,000 | ||||||
(1) The condensed consolidated balance sheet as of December 31, 2022, 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 | |||||
| March 31, | |||||
| 2023 | 2022 | ||||
| Net sales | $ | 13,800,000 | $ | 17,661,000 | |
| Cost of goods sold, excluding depreciation | |||||
| and amortization | 8,818,000 | 11,219,000 | |||
| Gross profit | 4,982,000 | 6,442,000 | |||
| Operating expenses: | |||||
| Selling, general and administrative | 4,313,000 | 4,306,000 | |||
| Depreciation and amortization | 243,000 | 212,000 | |||
| Total operating expenses | 4,556,000 | 4,518,000 | |||
| Income from operations | 426,000 | 1,924,000 | |||
| Other income: | |||||
| Equity in income of unconsolidated affiliate | 109,000 | 49,000 | |||
| Interest income, net | 158,000 | 1,000 | |||
| Total other income | 267,000 | 50,000 | |||
| Income before provision for income taxes | 693,000 | 1,974,000 | |||
| Provision for income taxes | 141,000 | 452,000 | |||
| Net income | $ | 552,000 | $ | 1,522,000 | |
| Basic earnings per common share | $ | 0.05 | $ | 0.12 | |
| Diluted earnings per common share | $ | 0.05 | $ | 0.12 | |
| Basic weighted average common shares outstanding | 12,150,067 | 13,058,871 | |||
| Diluted weighted average common shares outstanding | 12,193,602 | 13,159,490 | |||
| 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 |
