Alpha Pro Tech, Ltd. Announces Third Quarter 2022 Financial Results
Alpha Pro Tech reported Q3 2022 net sales of $14.7 million, a 1.7% increase from Q3 2021, driven by a 16.2% rise in Disposable Protective Apparel segment sales to $5.1 million. However, Building Supply segment sales fell 4.6% to $9.6 million. Net income decreased to $0.5 million or $0.04 per diluted share, down from $0.8 million or $0.06 a year earlier. The company reported $15.5 million in cash, with no debt, and working capital of $50.6 million as of September 30, 2022.
- Disposable Protective Apparel segment sales increased by 16.2% to $5.1 million.
- Cash and cash equivalents of $15.5 million with no debt.
- Working capital at $50.6 million, indicating strong financial health.
- Net income decreased by 34.3% to $0.5 million compared to Q3 2021.
- Building Supply segment sales declined by 4.6% to $9.6 million.
- Gross profit margin decreased to 32.7% from 34.1% year-over-year.
- Net sales for the third quarter of 2022 were
$14.7 million , up1.7% , compared to$14.5 million for the third quarter of 2021- Disposable Protective Apparel segment sales increased by
16.2% , to$5.1 million , compared to$4.4 million for the same period of 2021 - Building Supply segment sales decreased by
$0.5 million , or4.6% , to$9.6 million , compared to$10.1 million for the same period of 2021
- Disposable Protective Apparel segment sales increased by
- Net income for the third quarter of 2022 was
$0.5 million , or$0.04 per diluted share, compared to$0.8 million , or$0.06 per diluted share, for the third quarter of 2021 - Cash and cash equivalents of
$15.5 million and working capital of$50.6 million with no debt as of September 30, 2022
NOGALES, Ariz., Nov. 07, 2022 (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 nine month periods ended September 30, 2022.
Lloyd Hoffman, President and Chief Executive Officer of Alpha Pro Tech, commented, “Sales of disposable protective garments were significantly higher due to increased customer demand in the third quarter of 2022 compared to demand in the third quarter of 2021. Our customers’ supply chains were overstocked in the third quarter of 2021 due to record sales in the first six months of 2021, which led to lower sales in that quarter. Sales for the disposable protective garments also increased significantly in the third quarter of 2022, primarily due to improved sales to our major international channel partner. Sales of face masks in the third quarter of 2022 were down compared to the third quarter of 2021, which was still aided by increased COVID-19-related demand. Sales of face masks this quarter were in line with pre-pandemic levels, but are expected to be lower in the coming months as the market is saturated with face masks. Sales of face shields in the third quarter of 2022 were down compared to the third quarter of 2021 but more in line with pre-pandemic levels. Face shield sales are expected to be lower in the near term. We are continuing to work closely with our channel partners to uncover new end-customer sales opportunities.”
“Building Supply segment sales in the third quarter of 2022 saw synthetic roof underlayment sales achieve the second highest quarter on record, primarily due to increased sales of our economy TECHNO family of products by
Core Building Supply product sales (house wrap and synthetic roof underlayment sales, excluding other woven material) in the third quarter of 2022 were the second highest quarter on record, next only to the third quarter of 2021. In addition, we have experienced the five highest quarters on record for the Building Supply segment over the past six quarters: the second and third quarters of 2021 and the first, second and third quarters of 2022. We have also experienced record quarters for the Building Supply segment in seven of the past eight quarters, as compared to each respective prior year comparative quarter,” added Hoffman.
Mr. Hoffman concluded, “The Building Supply segment has seen some softening during the third quarter of 2022 as a result of a slowdown in new home construction starts, re-roofing expenditures and inventory stockpiles at the dealer side. To counterbalance the slowdown in the single family construction segment, we continue to focus on expanding distribution into the multi-family and commercial construction segments. We expect to see a general slowdown in sales during the fourth quarter as new home construction starts continue to decrease but we do not expect it to be as severe as the deterioration in the broader construction market, since we are also expanding our distribution reach and market share to offset the reduction in construction spending. We are also working to expand our product offerings focused on the wall and roof weatherization side of the construction process. As these new products are introduced, we expect to see an increase in revenue based on completing the overall systems used in construction. Management is encouraged about our growth potential in the coming year. However, there is uncertainty in the economy in relation to interest rates, possible recession and the continued slowdown in building that could impact the Building Supply segment sales.”
Net Sales
Consolidated sales for the three months ended September 30, 2022 increased to
Building Supply segment sales for the three months ended September 30, 2022 decreased by
The sales mix of the Building Supply segment for the three months ended September 30, 2022 was approximately
The Company has committed to increasing production capacity in our Building Supply segment by investing approximately
Sales for the Disposable Protective Apparel segment for the three months ended September 30, 2022 increased by
The sales mix of the Disposable Protective Apparel segment for the three months ended September 30, 2022 was approximately
Consolidated sales for the nine months ended September 30, 2022 decreased to
Building Supply segment sales for the nine months ended September 30, 2022 increased by
Building Supply segment sales during the first nine months of 2022 experienced growth due to increased demand for our housewrap products, other non-woven products and, to a lesser extent, synthetic roof underlayment products. The housewrap family of products continued to grow with a
The sales mix of the Building Supply segment for the nine months ended September 30, 2022 was
Sales for the Disposable Protective Apparel segment for the nine months ended September 30, 2022 decreased by
The sales mix of the Disposable Protective Apparel segment for the nine months ended September 30, 2022 was
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 started to come down. Additionally, our portfolio of products has been affected by much higher than normal raw material costs and increased labor costs. In the current environment, cost increases may rise more rapidly than our sales prices, which affects gross profit. In order to offset cost increases, the Company increased prices on many products during the latter part of the third quarter of 2022, which should have a positive effect in the coming quarters. Management expects the gross profit margin to improve next year, although continuing inflationary pressures could limit such improvements.
Selling, General and Administrative Expenses
Selling, general and administrative expenses increased 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 decreased by
Other income decreased by
Net Income
Net income for the three months ended September 30, 2022 was
Net income for the nine months ended September 30, 2022 was
Balance Sheet
As of September 30, 2022, the Company had cash and cash equivalents of
Inventory increased by
Colleen McDonald, Chief Financial Officer, commented, “During the three months ended September 30, 2022, we repurchased 259,200 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. 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 --
| Consolidated Balance Sheets (Unaudited) | |||||||||||
| September 30, | December 31, | ||||||||||
| 2022 | 2021 (1) | ||||||||||
| Assets | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | 15,517,000 | $ | 16,307,000 | |||||||
| Accounts receivable, net of allowance for doubtful accounts of | |||||||||||
| 6,077,000 | 3,397,000 | ||||||||||
| Accounts receivable, related party | 1,222,000 | 1,383,000 | |||||||||
| Inventories | 25,124,000 | 24,969,000 | |||||||||
| Prepaid expenses | 4,569,000 | 6,943,000 | |||||||||
| Total current assets | 52,509,000 | 52,999,000 | |||||||||
| Property and equipment, net | 5,773,000 | 6,064,000 | |||||||||
| Goodwill | 55,000 | 55,000 | |||||||||
| Definite-lived intangible assets, net | 2,000 | 3,000 | |||||||||
| Right-of-use assets | 1,959,000 | 2,648,000 | |||||||||
| Equity investment in unconsolidated affiliate | 6,207,000 | 6,120,000 | |||||||||
| Total assets | $ | 66,505,000 | $ | 67,889,000 | |||||||
| Liabilities and Shareholders' Equity | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable | $ | 272,000 | $ | 528,000 | |||||||
| Accrued liabilities | 747,000 | 1,250,000 | |||||||||
| Current portion of lease liabilities | 895,000 | 883,000 | |||||||||
| Total current liabilities | 1,914,000 | 2,661,000 | |||||||||
| Lease liabilities, net of current portion | 1,115,000 | 1,817,000 | |||||||||
| Deferred income tax liabilities, net | 791,000 | 791,000 | |||||||||
| Total liabilities | 3,820,000 | 5,269,000 | |||||||||
| Commitments and contingencies | |||||||||||
| Shareholders' equity: | |||||||||||
| Common stock, $.01 par value: 50,000,000 shares authorized; | |||||||||||
| 12,477,306 and 13,115,341 shares outstanding as of | |||||||||||
| September 30, 2022 and December 31, 2021, respectively | 126,000 | 132,000 | |||||||||
| Additional paid-in capital | - | - | |||||||||
| Retained earnings | 62,559,000 | 62,488,000 | |||||||||
| Total shareholders' equity | 62,685,000 | 62,620,000 | |||||||||
| Total liabilities and shareholders' equity | $ | 66,505,000 | $ | 67,889,000 | |||||||
1) The condensed consolidated balance sheet as of December 31, 2021 has been prepared using information from the audited consolidated balance sheet as of that date.
| Condensed Consolidated Statements of Comprehensive Income (Unaudited) | |||||||||||||||||||
| For the Three Months Ended | For the Nine Months Ended | ||||||||||||||||||
| September 30, | September 30, | ||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||||||
| Net sales | $ | 14,722,000 | $ | 14,475,000 | $ | 49,756,000 | $ | 55,442,000 | |||||||||||
| Cost of goods sold, excluding depreciation | |||||||||||||||||||
| and amortization | 9,904,000 | 9,533,000 | 32,884,000 | 35,089,000 | |||||||||||||||
| Gross profit | 4,818,000 | 4,942,000 | 16,872,000 | 20,353,000 | |||||||||||||||
| Operating expenses: | |||||||||||||||||||
| Selling, general and administrative | 3,970,000 | 3,884,000 | 12,341,000 | 12,661,000 | |||||||||||||||
| Depreciation and amortization | 201,000 | 209,000 | 641,000 | 611,000 | |||||||||||||||
| Total operating expenses | 4,171,000 | 4,093,000 | 12,982,000 | 13,272,000 | |||||||||||||||
| Income from operations | 647,000 | 849,000 | 3,890,000 | 7,081,000 | |||||||||||||||
| Other income (loss): | |||||||||||||||||||
| Loss on fixed assets | - | - | (490,000 | ) | - | ||||||||||||||
| Equity in income (loss) of unconsolidated affiliate | (13,000 | ) | 112,000 | 87,000 | 623,000 | ||||||||||||||
| Interest income, net | 28,000 | 1,000 | 39,000 | 2,000 | |||||||||||||||
| Total other income (loss) | 15,000 | 113,000 | (364,000 | ) | 625,000 | ||||||||||||||
| Income before provision for income taxes | 662,000 | 962,000 | 3,526,000 | 7,706,000 | |||||||||||||||
| Provision for income taxes | 159,000 | 196,000 | 808,000 | 1,550,000 | |||||||||||||||
| Net income | $ | 503,000 | $ | 766,000 | $ | 2,718,000 | $ | 6,156,000 | |||||||||||
| Basic earnings per common share | $ | 0.04 | $ | 0.06 | $ | 0.21 | $ | 0.46 | |||||||||||
| Diluted earnings per common share | $ | 0.04 | $ | 0.06 | $ | 0.21 | $ | 0.45 | |||||||||||
| Basic weighted average common shares outstanding | 12,615,187 | 13,177,520 | 12,834,505 | 13,255,125 | |||||||||||||||
| Diluted weighted average common shares outstanding | 12,688,381 | 13,419,485 | 12,909,870 | 13,555,925 | |||||||||||||||
| 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 were Alpha Pro Tech's earnings for Q3 2022?
How did sales perform in Q3 2022 for APT?
What factors affected Alpha Pro Tech's Building Supply segment sales?
What is the financial outlook for Alpha Pro Tech after Q3 2022?
