Alpha Pro Tech, Ltd. Announces Fourth Quarter and Full Year 2023 Financial Results
- Strong 24.9% increase in overall fourth-quarter sales to $15.3 million compared to the same period in 2022.
- Net income for the fourth quarter of 2023 was $1.1 million, a significant rise from $564,000 in the fourth quarter of 2022.
- Building Supply segment sales soared by 55.7% to $9.8 million, driven by robust performance in housewrap, synthetic roof underlayment, and other woven materials.
- Disposable Protective Apparel segment sales declined by 7.7% to $5.5 million, mainly due to lower sales of disposable protective garments, face masks, and face shields.
- Company reported cash of $20.4 million, working capital of $50.3 million, and no debt as of December 31, 2023.
- Management optimistic about growth opportunities in the Building Supply segment through diversification and product development.
- Face mask and face shield sales expected to rebound in 2024 after facing challenges from residual COVID-19 inventory levels at distributors.
- Gross profit margin improved to 37.3% for the year ended December 31, 2023, aided by lower ocean freight rates.
- Selling, general, and administrative expenses increased by 9.6% for the year ended December 31, 2023, impacting income from operations.
- Income from operations increased by 27.8% for the fourth quarter of 2023, driven by higher gross profit.
- Net income for the year ended December 31, 2023, rose to $4.2 million, reflecting a 27.6% increase compared to 2022.
- Company had cash and cash equivalents of $20.4 million, working capital of $50.5 million, and a current ratio of 21:1 as of December 31, 2023.
- Decrease in sales of Disposable Protective Apparel segment by 16.8% for the year ended December 31, 2023.
- Increased selling, general, and administrative expenses impacting income from operations.
- Overall sales for the year ended December 31, 2023, decreased slightly by 1.2% compared to the previous year.
- Inventory decreased by 17.5% as of December 31, 2023, affecting the balance sheet.
Insights
The reported increase in fourth quarter sales for Alpha Pro Tech, Ltd. reflects a robust growth trajectory, particularly in the Building Supply segment, which saw a 55.7% increase in sales. This growth is significant given the broader context of an 8.8% decrease in housing starts, indicating the company's successful diversification and product development efforts. The Disposable Protective Apparel segment, however, experienced a decline, which may suggest a market correction post-pandemic or a shift in consumer demand.
From a financial perspective, the company's strong balance sheet, highlighted by a cash position of $20.4 million and no debt, positions it favorably for continued investment in growth and shareholder returns, as evidenced by the stock repurchase program. The increase in net income and earnings per share (EPS) year-over-year also indicates improved profitability and operational efficiency.
Investors should note the management's cautious optimism regarding the growth of face mask and face shield sales, which have been affected by excess pandemic inventory. The company's ability to navigate these market dynamics will be critical to its performance in the Disposable Protective Apparel segment moving forward.
Analyzing the market trends, Alpha Pro Tech's performance in the Building Supply segment is commendable, especially considering the decline in new housing starts. The company’s focus on expanding its housewrap product line, including REX Wrap® and REX Wrap Plus® and its successful penetration into the multi-family and commercial construction sectors are key drivers of this growth. The increase in sales of housewrap accessories further demonstrates the company's ability to capture additional market share through complementary products.
The decline in the Disposable Protective Apparel segment, specifically in face masks and face shields, is indicative of a saturated market and the residual impact of the pandemic. However, the company’s sales of disposable protective garments remain strong, suggesting a stabilization in this market segment. The management's strategy to expand into new markets with self-adhered roofing products could potentially offset challenges faced in other segments and is worth monitoring for future performance implications.
Alpha Pro Tech's financial results must be contextualized within the broader economic environment, which includes challenges such as economic uncertainty, increased offshore competition and pressures to reduce product selling prices. Despite these headwinds, the company has managed to outperform market trends in key segments, which is a testament to its competitive strategy and operational resilience.
The company's expectation of maintaining a similar gross profit margin in 2024, despite potential negative impacts from geopolitical tensions affecting freight rates, suggests confidence in its pricing power and cost management capabilities. The strategic management of selling, general and administrative expenses, which have decreased as a percentage of net sales, further underscores the company's efficiency gains.
Overall, Alpha Pro Tech's results demonstrate a company that is successfully navigating a complex economic landscape, with the potential for continued growth and profitability. Stakeholders should, however, remain aware of external economic factors that could influence the company's performance in the future.
Overall Fourth Quarter Sales Increased
- Net sales for the fourth quarter of 2023 was
$15.3 million , up by24.9% compared to$12.2 million for the fourth quarter of 2022- Building Supply segment sales increased by
$3.5 million , or55.7% , to$9.8 million , compared to$6.3 million for the three months ended December 31, 2022 - Disposable Protective Apparel segment sales decreased by
7.7% , to$5.5 million , compared to$5.9 million for the same period of 2022
- Building Supply segment sales increased by
- Net income for the fourth quarter of 2023 was
$1.1 million , or$0.09 per diluted share, compared to$564,000 , or$0.05 per diluted share, for the fourth quarter of 2022 - Net income for the year ended December 31, 2023 was
$4.2 million , or$0.35 per diluted share, compared to$3.3 million , or$0.26 per diluted share, for the year ended December 31, 2022 - Cash of
$20.4 million and working capital of$50.3 million with no debt, as of December 31, 2023
NOGALES, Ariz., March 13, 2024 (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, 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
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
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
Mr. Hoffman continued, “Sales of disposable protective garments in 2023 were up by
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
Building Supply segment sales for the three months ended December 31, 2023, increased by
The sales mix of the Building Supply segment for the three months ended December 31, 2023 was approximately
Disposable Protective Apparel segment sales for the three months ended December 31, 2023 decreased by
The sales mix of the Disposable Protective Apparel segment for the three months ended December 31, 2023 was approximately
Consolidated sales for the year ended December 31, 2023, decreased to
Building Supply segment sales for the year ended December 31, 2023 increased by
The sales mix of the Building Supply segment for the year ended December 31, 2023 was approximately
Disposable Protective Apparel segment sales for the year ended December 31, 2023 decreased by
The sales mix of the Disposable Protective Apparel segment for the year ended December 31, 2023 was approximately
Gross Profit
Gross profit decreased by
Gross profit increased by
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
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
The increase in selling, general and administrative expenses of
Income from Operations
Income from operations increased by
Income from operations decreased by
Other Income
Other income increased by
Other income increased by
Net Income
Net income for the three months ended December 31, 2023 was
Net income for the year ended December 31, 2023 was
Balance Sheet
As of December 31, 2023, the Company had cash and cash equivalents of
Inventory decreased by
Colleen McDonald, Chief Financial Officer, commented, “As of December 31, 2023, 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, 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
| 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
| Three Months Ended | Year Ended | |||||||||||||||||
| 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 | ||||||||||
| Basic weighted average common shares outstanding | 11,506,261 | 12,354,564 | 11,856,356 | 12,713,533 | ||||||||||||||
| Diluted weighted average common shares outstanding | 11,578,557 | 12,403,455 | 11,856,356 | 12,781,004 | ||||||||||||||
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 |
FAQ
What was the percentage increase in overall fourth-quarter sales for Alpha Pro Tech, Ltd. (APT)?
What was the net income for the fourth quarter of 2023 for APT?
How did the Building Supply segment sales perform in the fourth quarter of 2023 for APT?
What was the reason behind the decline in sales for the Disposable Protective Apparel segment in the fourth quarter of 2023 for APT?
What was the cash position and working capital of APT as of December 31, 2023?
