Alpha Pro Tech, Ltd. Announces Fourth Quarter and Full Year 2022 Financial Results
Alpha Pro Tech (APT) reported a fourth-quarter 2022 net sales of $12.2 million, down 7.4% from Q4 2021. Full-year sales fell 9.7% to $62.0 million. Net income for Q4 2022 was $564,000 or $0.05 per share, compared to $600,000 in Q4 2021. For 2022, net income dropped 51.4% to $3.3 million. Cash reserves stood at $16.3 million with no debt. While disposable protective garment sales saw a 27% increase in H2 2022, overall sales were hurt by excess inventory. The company expressed cautious optimism for 2023, expecting improved sales trends.
- Sales of disposable protective garments increased by approximately 31.6% in Q4 2022.
- Expectations for disposable protective garments in 2023 are 'cautiously optimistic'.
- Cash of $16.3 million with no debt provides financial stability.
- Inventory decreased by 2.3% to $24.4 million as of December 31, 2022.
- Net sales decreased 9.7% for the full year 2022.
- Net income for 2022 decreased 51.4% compared to 2021.
- Building Supply segment sales dropped 27.6% in Q4 2022.
- Gross profit decreased 14.3% for the full year 2022.
- Net sales for the fourth quarter of 2022 were
$12.2 million , down7.4% compared to$13.2 million for the fourth quarter of 2021 - Net sales for the year ended December 31, 2022 decreased
9.7% to$62.0 million , compared to$68.6 million for the year ended December 31, 2021 - Net income for the fourth quarter of 2022 was
$564,000 , or$0.05 per diluted share, compared to$600,000 , or$0.05 per diluted share, for the fourth quarter of 2021 - Net income for the year ended December 31, 2022 was
$3.3 million , or$0.26 per diluted share, compared to$6.8 million , or$0.50 per diluted share, for the year ended December 31, 2021 - Cash of
$16.3 million and working capital of$50.2 million with no debt, as of December 31, 2022
NOGALES, Ariz., March 16, 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 and year ended December 31, 2022.
Lloyd Hoffman, President and Chief Executive Officer of Alpha Pro Tech, commented, “Although sales of disposable protective garments decreased for the full year for 2022 compared to 2021, it was as a result of record sales in the first half of 2021, driven by continued strong shipments in response to COVID-19. Sales of disposable protective garments in 2022 were negatively affected due to excess inventories in the first half of 2022 with our main distributor and end-customer base as a result of the pandemic. Sales of disposable protective garments in the second half of 2022 increased by approximately
Going forward in 2023, we are seeing reversing and positive trends with the aforementioned challenges. In the first quarter of 2023, our sales and marketing team is presenting at many national trade conferences and distributor meetings for the first time in three years. Moreover, feedback from some early first quarter 2023 national meetings is that our mutual end-customers are also relaxing their protocols and allowing for face-to-face meetings, product demonstrations and product evaluations. We are starting to see more consistent ordering patterns from our distributor customers, which is an indication of more balanced inventories in the marketplace. To that end, our expectations for disposable protective garments in 2023 is cautiously optimistic.”
“Building Supply segment sales increased only marginally in 2022 compared to 2021 due to a softening in the building industry since the third quarter of 2022, resulting from a slowdown in new home construction starts, re-roofing expenditures and inventory stockpiles at the dealer side. Sales for this segment were up
Even though we had a modest increase in our housewrap product category, we are pleased with the
Mr. Hoffman concluded, “The Company has committed to increasing production capacity in our Building Supply segment by investing approximately
Management is encouraged by our growth potential, in particular in our Building Supply segment, in the coming year. However, 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.”
2022 Results
Net Sales
Consolidated sales for the three months ended December 31, 2022 decreased to
Sales for the Disposable Protective Apparel segment for the three months ended December 31, 2022 increased by
The sales mix of the Disposable Protective Apparel segment for the three months ended December 31, 2022 was approximately
Building Supply segment sales for the three months ended December 31, 2022, decreased by
The sales mix of the Building Supply segment for the three months ended December 31, 2022 was approximately
Consolidated sales for the year ended December 31, 2022 decreased to
Sales for the Disposable Protective Apparel segment for the year ended December 31, 2022 decreased by
The sales mix of the Disposable Protective Apparel segment for the year ended December 31, 2022 was approximately
Building Supply segment sales for the year ended December 31, 2022 increased by
The sales mix of the Building Supply segment for the year ended December 31, 2022 was approximately
Gross Profit
Gross profit decreased by
Gross profit decreased by
Although the gross profit margin has been negatively affected in 2022 by significant increases in ocean freight and other transportation costs, ocean freight rates have recently come down, but not to pre-pandemic levels. Additionally, our portfolio of products has been affected by much higher than normal raw material costs and increased labor costs. The Company increased prices on many products during the latter part of the third quarter of 2022, which has recently had a positive effect on gross profit margin. Management expects the gross profit margin to improve next year, although continuing inflationary pressures could affect such improvements.
Selling, General and Administrative Expenses
Selling, general and administrative expenses decreased by
Selling, general and administrative expenses decreased by
Income from Operations
Income from operations decreased by
Income from operations decreased by
Other Income
Other income increased by
Other income decreased by
Net Income
Net income for the three months ended December 31, 2022 was
Net income for the year ended December 31, 2022 was
Balance Sheet
As of December 31, 2022, the Company had cash of
Inventory decreased by
Colleen McDonald, Chief Financial Officer, commented, “As of December 31, 2022, we had
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, transportation and other costs, inflationary pressures, 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, changes in global economic conditions; the effects of a weakness in internal control over financial reporting; 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; 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.
| Consolidated Balance Sheets | |||||||||||||
| December 31, | December 31, | ||||||||||||
| 2022 | 2021 | ||||||||||||
| Assets | |||||||||||||
| Current assets: | |||||||||||||
| Cash and cash equivalents | $ | 16,290,000 | $ | 16,307,000 | |||||||||
| Accounts receivable, net of allowance for doubtful accounts of | |||||||||||||
| 5,382,000 | 3,397,000 | ||||||||||||
| Accounts receivable, related party | 1,591,000 | 1,383,000 | |||||||||||
| Inventories | 24,397,000 | 24,969,000 | |||||||||||
| Prepaid expenses | 4,902,000 | 6,943,000 | |||||||||||
| Total current assets | 52,562,000 | 52,999,000 | |||||||||||
| Property and equipment, net | 5,742,000 | 6,064,000 | |||||||||||
| Goodwill | 55,000 | 55,000 | |||||||||||
| Definite-lived intangible assets, net | 1,000 | 3,000 | |||||||||||
| Right-of-use assets | 1,725,000 | 2,648,000 | |||||||||||
| Equity investment in unconsolidated affiliate | 4,718,000 | 5,251,000 | |||||||||||
| Total assets | $ | 64,803,000 | $ | 67,020,000 | |||||||||
| Liabilities and Shareholders’ Equity | |||||||||||||
| Current liabilities: | |||||||||||||
| Accounts payable | $ | 674,000 | $ | 528,000 | |||||||||
| Accrued liabilities | 833,000 | 1,250,000 | |||||||||||
| Lease liabilities | 899,000 | 883,000 | |||||||||||
| Total current liabilities | 2,406,000 | 2,661,000 | |||||||||||
| Lease liabilities, net of current portion | 875,000 | 1,817,000 | |||||||||||
| Deferred income tax liabilities, net | 764,000 | 791,000 | |||||||||||
| Total liabilities | 4,045,000 | 5,269,000 | |||||||||||
| Commitments and contingincies | |||||||||||||
| Shareholders’ equity: | |||||||||||||
| Common stock, $.01 par value: 50,000,000 shares authorized; | |||||||||||||
| 12,226,306 and 13,115,341 shares outstanding as of | |||||||||||||
| December 31, 2022 and December 31, 2021, respectively | 123,000 | 132,000 | |||||||||||
| Retained earnings | 62,124,000 | 62,488,000 | |||||||||||
| Accumulated other comprehensive loss | (1,489,000 | ) | (869,000 | ) | |||||||||
| Total shareholders’ equity | 60,758,000 | 61,751,000 | |||||||||||
| Total liabilities and shareholders’ equity | $ | 64,803,000 | $ | 67,020,000 | |||||||||
| Condensed Consolidated Statements of Income | ||||||||||||||||||||
| Three Months Ended | Year Ended | |||||||||||||||||||
| December 31, | December 31, | |||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||||||
| Net sales | $ | 12,225,000 | $ | 13,195,000 | $ | 61,981,000 | $ | 68,637,000 | ||||||||||||
| Cost of goods sold, excluding depreciation | ||||||||||||||||||||
| and amortization | 7,414,000 | 8,250,000 | 40,298,000 | 43,339,000 | ||||||||||||||||
| Gross profit | 4,811,000 | 4,945,000 | 21,683,000 | 25,298,000 | ||||||||||||||||
| Operating expenses: | ||||||||||||||||||||
| Selling, general and administrative | 3,878,000 | 3,893,000 | 16,219,000 | 16,554,000 | ||||||||||||||||
| Depreciation and amortization | 173,000 | 206,000 | 814,000 | 817,000 | ||||||||||||||||
| Total operating expenses | 4,051,000 | 4,099,000 | 17,033,000 | 17,371,000 | ||||||||||||||||
| Income from operations | 760,000 | 846,000 | 4,650,000 | 7,927,000 | ||||||||||||||||
| Other income (expenses): | ||||||||||||||||||||
| Equity in income (loss) of unconsolidated affiliate | - | (52,000 | ) | 87,000 | 571,000 | |||||||||||||||
| Impairment on deposit | - | - | (490,000 | ) | - | |||||||||||||||
| Interest income, net | 109,000 | - | 148,000 | 2,000 | ||||||||||||||||
| Total other income (loss), net | 109,000 | (52,000 | ) | (255,000 | ) | 573,000 | ||||||||||||||
| Income before provision | ||||||||||||||||||||
| for income taxes | 869,000 | 794,000 | 4,395,000 | 8,500,000 | ||||||||||||||||
| Provision for income taxes | 305,000 | 194,000 | 1,113,000 | 1,744,000 | ||||||||||||||||
| Net income | $ | 564,000 | $ | 600,000 | $ | 3,282,000 | $ | 6,756,000 | ||||||||||||
| Basic earnings per common share | $ | 0.05 | $ | 0.05 | $ | 0.26 | $ | 0.51 | ||||||||||||
| Diluted earnings per common share | $ | 0.05 | $ | 0.05 | $ | 0.26 | $ | 0.50 | ||||||||||||
| Basic weighted average common shares outstanding | 12,354,564 | 13,138,096 | 12,713,533 | 13,225,628 | ||||||||||||||||
| Diluted weighted average common shares outstanding | 12,403,455 | 13,302,013 | 12,781,004 | 13,499,442 | ||||||||||||||||
| 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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