Alpha Pro Tech, Ltd. Announces Second Quarter 2023 Financial Results
- Sales of housewrap and accessories increased by 17.6% in the second quarter of 2023
- Sales of REX Wrap® and REX Wrap Plus® were up 11.6% over the prior-year quarter
- Sales of disposable protective garments increased by 7.6% in the second quarter of 2023
- Net income for the quarter ended June 30, 2023 was $1.1 million, a 65.4% increase from the same period in 2022
- Net sales decreased by 7.2% compared to the second quarter of 2022
- Disposable Protective Apparel segment sales decreased by 14.9%
- Building Supply segment sales decreased by 2.6%
- Net sales for the second quarter of 2023 were
$16.1 million , down7.2% , compared to$17.4 million for the second quarter of 2022- Building Supply segment sales decreased by
$280,000 , or2.6% , to$10.5 million , compared to$10.8 million for the three months ended June 30, 2022 - Disposable Protective Apparel segment sales decreased
14.9% , to$5.6 million , compared to$6.6 million for the same period of 2022
- Building Supply segment sales decreased by
- Net income for the second quarter of 2023 was
$1.1 million , or$0.10 per diluted share, compared to$693,000 , or$0.05 per diluted share, for the second quarter of 2022 - Cash of
$15.3 million and working capital of$50.3 million , with no debt as of June 30, 2023
NOGALES, Ariz., Aug. 08, 2023 (GLOBE NEWSWIRE) -- Alpha Pro Tech, Ltd. (NYSE American: APT), (the "Company"), 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 month periods ended June 30, 2023.
Lloyd Hoffman, President and Chief Executive Officer of Alpha Pro Tech, commented, “The industry-wide housing market continues to be soft, due to a continued decrease in demand for new home starts as a result of interest rate hikes and economic uncertainty. In the second quarter of 2023, single family housing starts in the United States decreased by
With that said, our sales of housewrap and accessories, which increased by
Management continues to be excited by the trend in synthetic roof underlayment as sales outperform the overall market, especially as management expects to see an increase in sales as inventory is alleviated at the dealer and distribution level. In addition, we will be launching a new line of self-adhered roofing products, in late 2023, which we expect will bring additional revenue to our synthetic roof underlayment line of products.”
“Sales of disposable protective garments in the second quarter of 2023 were up
Net Sales
Three months ended June 30, 2023 compared to three months ended June 30, 2022
Consolidated sales for the three months ended June 30, 2023, decreased to
Building Supply segment sales for the quarter ended June 30, 2023 decreased by
The sales mix of the Building Supply segment for the quarter ended June 30, 2023 was approximately
The synthetic roof underlayment market has also been significantly affected by the continued decrease in new home starts, as well as a push in the market to reduce product selling prices. Despite these pressures, synthetic roof underlayment sales also outperformed the market and were up
Other woven material sales decreased in the second quarter of 2023 compared to the same period of 2022 by
Recent capital investments in the Building Supply segment are expected to increase production capacity, allowing us to react to spikes in new construction and multi-family housing starts more quickly than some competitors with multiple month lead-times due to overseas production and shipping. Continued growth in the Building Supply segment is expected through the market’s reception of our best-in-class warranties. These include the highest and strongest coverages available in synthetic roof underlayments and full system warranties that apply to single-family, commercial and multi-family properties utilizing our weather resistive barriers.
Disposable Protective Apparel segment sales for the quarter ended June 30, 2023 decreased by
The sales mix of the Disposable Protective Apparel segment for the quarter ended June 30, 2023 was approximately
Six months ended June 30, 2023 compared to six months ended June 30, 2022
Consolidated sales for the six months ended June 30, 2023 decreased to
Building Supply segment sales for the six months ended June 30, 2023 decreased by
The sales mix of the Building Supply segment for the six months ended June 30, 2023 was
Disposable Protective Apparel segment sales for the six months ended June 30, 2023 decreased by
Sales of disposable protective garments for the six months ended June 30, 2023 were up
The sales mix of the Disposable Protective Apparel segment for the six months ended June 30, 2023 was
Gross Profit
Gross profit increased by
Gross profit decreased by
The gross profit margin in 2023 has benefited from a decline in ocean freight rates since the latter part of 2022. Management expects the gross profit margin to be in a similar range throughout the balance of 2023, although the sales mix could affect gross margin.
Selling, General and Administrative Expenses
Selling, general and administrative expenses increased by
Selling, general and administrative expenses increased by
The increase in selling, general and administrative expenses for the three and six months ended June 30, 2023 was primarily due to an increase in Building Supply segment expenses related to increased employee compensation due to a larger sale team, as well as marketing, sales travel and insurance expenses.
Income from Operations
Income from operations was
Income from operations decreased by
Other Income
Other income increased by
Other income increased by
Net Income
Net income for the quarter ended June 30, 2023 was
Net income for the six months ended June 30, 2023 was
Balance Sheet
As of June 30, 2023, the Company had cash of
Inventory decreased by
Colleen McDonald, Chief Financial Officer, commented, “During the six months ended June 30, 2023, we repurchased 475,000 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.
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)
| June 30, | December 31, | ||||
| 2023 | 2022 (1) | ||||
| Assets | |||||
| Current assets: | |||||
| Cash and cash equivalents | $ | 15,349,000 | $ | 16,290,000 | |
| Accounts receivable, net of allowance for doubtful accounts of December 31, 2022 | 8,595,000 | 5,382,000 | |||
| Accounts receivable, related party | 926,000 | 1,591,000 | |||
| Inventories | 21,971,000 | 24,397,000 | |||
| Prepaid expenses | 5,421,000 | 4,902,000 | |||
| Total current assets | 52,262,000 | 52,562,000 | |||
| Property and equipment, net | 5,671,000 | 5,742,000 | |||
| Goodwill | 55,000 | 55,000 | |||
| Definite-lived intangible assets, net | - | 1,000 | |||
| Right-of-use assets | 1,264,000 | 1,725,000 | |||
| Equity investment in unconsolidated affiliate | 5,089,000 | 4,718,000 | |||
| Total assets | $ | 64,341,000 | $ | 64,803,000 | |
| Liabilities and Shareholders' Equity | |||||
| Current liabilities: | |||||
| Accounts payable | $ | 653,000 | $ | 674,000 | |
| Accrued liabilities | 494,000 | 833,000 | |||
| Lease liabilities | 777,000 | 899,000 | |||
| Total current liabilities | 1,924,000 | 2,406,000 | |||
| Lease liabilities, net of current portion | 532,000 | 875,000 | |||
| Deferred income tax liabilities, net | 764,000 | 764,000 | |||
| Total liabilities | 3,220,000 | 4,045,000 | |||
| Commitments and contingencies | |||||
| Shareholders' equity: | |||||
| Common stock, $.01 par value: 50,000,000 shares authorized; 11,875,556 and 12,226,306 shares outstanding as of June 30, 2023 and December 31, 2022, respectively | 119,000 | 123,000 | |||
| Retained earnings | 62,333,000 | 62,124,000 | |||
| Accumulated other comprehensive loss | (1,331,000) | (1,489,000) | |||
| Total shareholders' equity | 61,121,000 | 60,758,000 | |||
| Total liabilities and shareholders' equity | $ | 64,341,000 | $ | 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 | For the Six Months Ended | ||||||||||||||
| June 30, | June 30, | ||||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||
| Net sales | $ | 16,115,000 | $ | 17,373,000 | $ | 29,914,000 | $ | 35,034,000 | |||||||
| Cost of goods sold, excluding depreciation and amortization | 10,009,000 | 11,761,000 | 18,826,000 | 22,980,000 | |||||||||||
| Gross profit | 6,106,000 | 5,612,000 | 11,088,000 | 12,054,000 | |||||||||||
| Operating expenses: | |||||||||||||||
| Selling, general and administrative | 4,575,000 | 4,065,000 | 8,888,000 | 8,371,000 | |||||||||||
| Depreciation and amortization | 219,000 | 227,000 | 462,000 | 439,000 | |||||||||||
| Total operating expenses | 4,794,000 | 4,292,000 | 9,350,000 | 8,810,000 | |||||||||||
| Income from operations | 1,312,000 | 1,320,000 | 1,738,000 | 3,244,000 | |||||||||||
| Other income: | |||||||||||||||
| Loss on fixed assets | - | (490,000 | ) | - | (490,000 | ) | |||||||||
| Equity in income of unconsolidated affiliate | 103,000 | 50,000 | 212,000 | 99,000 | |||||||||||
| Interest income, net | 169,000 | 10,000 | 327,000 | 11,000 | |||||||||||
| Total other income | 272,000 | (430,000 | ) | 539,000 | (380,000 | ) | |||||||||
| Income before provision for income taxes | 1,584,000 | 890,000 | 2,277,000 | 2,864,000 | |||||||||||
| Provision for income taxes | 438,000 | 197,000 | 579,000 | 649,000 | |||||||||||
| Net income | $ | 1,146,000 | $ | 693,000 | $ | 1,698,000 | $ | 2,215,000 | |||||||
| Basic earnings per common share | $ | 0.10 | $ | 0.05 | $ | 0.14 | $ | 0.17 | |||||||
| Diluted earnings per common share | $ | 0.10 | $ | 0.05 | $ | 0.14 | $ | 0.17 | |||||||
| Basic weighted average common shares outstanding | 11,997,443 | 12,834,332 | 12,072,571 | 12,945,981 | |||||||||||
| Diluted weighted average common shares outstanding | 12,013,845 | 12,908,223 | 12,103,419 | 13,032,313 | |||||||||||
| 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 |
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