Fourth Quarter Consolidated Sales Increased
16.4% to $12.2 MillionIncome from Operations Increased 42.3% for
the Fourth Quarter and 34.4% for the Full Year
- Consolidated sales increased 8.8% to
$47.6 million for the year ended December 31, 2014, compared to
$43.8 million for the year ended December 31, 2013.
- Net income increased 31.9% to $2.7
million for the year ended December 31, 2014, compared to $2.1
million for the year ended December 31, 2013.
- Diluted earnings per common share
for the year ended December 31, 2014 were $0.15, compared to $0.11
per diluted common share for the year ended December 31,
2013.
Alpha Pro Tech, Ltd. (NYSE MKT: 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 fourth quarter
and year ended December 31, 2014.
Consolidated sales for the fourth quarter ended December 31,
2014 increased 16.4% to $12.2 million from $10.5 million for the
comparable quarter of 2013. Building Supply segment sales for the
fourth quarter of 2014 increased by 2.6% to $6.1 million, compared
to $5.9 million for the same period of 2013. The sales mix of the
Building Supply segment for the fourth quarter of 2014 was 61% for
synthetic roof underlayment, 35% for housewrap and 4% for other
woven material. This compared to 57% for synthetic roof
underlayment, 40% for housewrap and 3% for other woven material for
the fourth quarter of 2013. Sales for the Disposable Protective
Apparel segment for the fourth quarter of 2014 increased 13.3% to
$4.1 million, compared to $3.6 million for the same period of 2013.
The increase was primarily due to increased sales to our regional,
national and international distributor network, as well as
increased sales resulting from the Ebola outbreak. Infection
Control segment sales for the fourth quarter of 2014 increased by
107%, or $1.1 million, to $2.1 million, compared to $1.0 million
for the same period of 2013, primarily due to the increase in sales
resulting from the Ebola outbreak.
Consolidated sales for the year ended December 31, 2014
increased by 8.8%, or $3.8 million, to $47.6 million from $43.8
million for the comparable period of 2013. This increase consisted
of increased sales in all three of the Company’s segments -
Building Supply, Disposable Protective Apparel and Infection
Control.
Building Supply segment sales in 2014 increased 4.5%, or $1.2
million, to a record $27.5 million, compared to $26.4 million in
2013. Building Supply segment sales have increased each year since
2008. The increase in 2014 was primarily due to an 8.6% increase in
sales of synthetic roof underlayment, partially offset by a 1.5%
decrease in sales of housewrap. The sales mix of the Building
Supply segment for the year ended December 31, 2014 was 63% for
synthetic roof underlayment, 33% for housewrap and 4% for other
woven material. This compared to 61% for synthetic roof
underlayment, 35% for housewrap and 4% for other woven material for
the year ended December 31, 2013.
Sales for the Disposable Protective Apparel segment for the year
ended December 31, 2014 increased 11.2%, or $1.5 million, to $14.7
million, compared to $13.2 million for 2013. The increase was
primarily due to a significant increase in sales of disposable
protective apparel to regional and national distributors.
Infection Control segment sales for the year ended December 31,
2014 increased 28.0%, or $1.2 million, to $5.4 million, compared to
$4.2 million for 2013. Mask sales were up by 8.6%, or $0.3 million,
to $3.2 million, and shield sales were up by 73.4%, or $0.9
million, to $2.2 million. The overall increase in sales in this
segment was primarily due to the increased demand generated by the
Ebola outbreak in the fourth quarter of 2014.
Al Millar, President of Alpha Pro Tech, commented, “We delivered
solid top-line growth across all segments of our business during
2014. The Building Supply segment grew as a direct result of an
increase in sales of our synthetic roof underlayment products, REX™
SynFelt and TECHNOply™. This segment has shown year over year
growth for seven consecutive years, and we believe that sales will
continue to grow as we introduce new products and gain market
share. Our Disposable Protective Apparel segment had significant
growth in 2014 as a result of our focus on broadening our
distribution network. Our Infection Control segment benefited from
demand resulting from the fight against infectious diseases,
including the deadly Ebola virus. During the Ebola crisis in the
fourth quarter of 2014, we experienced a real and quantifiable
impact on our business, especially the Infection Control segment.
We were able to react quickly and ramp up our production capacity
in the Infection Control segment to increase output and meet the
rising demand. This resulted in a doubling in sales for this
segment during the fourth quarter of 2014 compared to the same
quarter of 2013.”
Gross profit for the fourth quarter ended December 31, 2014
increased by 13.1% to $4.4 million, or 36.4% gross profit margin,
compared to $3.9 million, or 37.4% gross profit margin, for the
same period in 2013. Gross profit for the year ended December 31,
2014 increased 7.5% to $17.5 million, or 36.6% gross profit margin,
from $16.2 million, or 37.1% gross profit margin, for the same
period of 2013.
Selling, general and administrative expenses increased by 10.1%
to $3.6 million for the fourth quarter of 2014 from $3.2 million
for the same quarter of 2013. As a percentage of net sales,
selling, general and administrative expenses decreased to 29.1% for
the fourth quarter ended December 31, 2014 from 30.7% for the same
period of 2013.
Selling, general and administrative expenses increased by 3.0%
to $13.5 million for the year ended December 31, 2014 from $13.1
million for 2013. As a percentage of net sales, selling, general
and administrative expenses decreased to 28.4% for the year ended
December 31, 2014 from 29.9% for 2013.
Income from operations increased by $218,000, or 42.3%, to
$733,000 for the fourth quarter of 2014, compared to income from
operations of $515,000 for the fourth quarter of 2013. Income from
operations increased by $823,000, or 34.4%, to $3,218,000 for the
year ended December 31, 2014, compared to income from operations of
$2,395,000 for the year ended December 31, 2013.
Net income decreased for the fourth quarter of 2014 to $612,000,
compared to $684,000 for the same period in 2013, a decrease of
$72,000 or 10.5% as compared to the same period in 2013. Excluding
a gain on investment in common stock warrants of $350,000 in the
fourth quarter of 2013, net income for the fourth quarter of 2014
was up 83.2%. Management believes that the exclusion of the gain on
investment in common stock warrants recognized in the fourth
quarter of 2013 when comparing the change in fourth quarter net
income between periods is relevant as the warrants were exercised
during 2014 and will no longer impact net income going forward. Net
income as a percentage of net sales for the fourth quarter of 2014
and 2013 was 5.0% and 6.5%, respectively. Basic and diluted
earnings per common share for the quarters ended December 31, 2014
and 2013 were $0.03 and $0.04, respectively.
Net income increased by 31.9% to $2.7 million for the year ended
December 31, 2014, compared to $2.1 million for the same period of
2013. Net income as a percentage of net sales for the year ended
December 31, 2014 was 5.8%, and net income as a percentage of net
sales for 2013 was 4.7%. Basic and diluted earnings per common
share for the years ended December 31, 2014 and 2013 were $0.15 and
$0.11, respectively.
The consolidated balance sheet remained strong with a current
ratio of 15:1 as of December 31, 2014, compared to 19:1 as of
December 31, 2013. The Company completed 2014 with working capital
of $33.2 million.
Inventories increased by $2.4 million, or 17.0%, to $16.5
million as of December 31, 2014 from $14.1 million as of December
31, 2013. The increase was primarily due to an increase in
inventories for the Building Supply segment of $2.9 million, or
50.0%, to $8.7 million and an increase in inventories for the
Infection Control segment of $58,000, or 1.8%, to $3.3 million,
partially offset by a decrease in inventories for the Disposable
Protective Apparel segment of $547,000, or 10.7%, to $4.6
million.
Lloyd Hoffman, Chief Financial Officer, commented, “At the end
of the fourth quarter of 2014, we had $1.4 million available for
additional stock purchases under our stock repurchase program. For
the 2014 year, we repurchased 1,019,553 shares of common stock at a
cost of $2.2 million, bringing the program total to 11,544,531
shares of common stock repurchased at an aggregate cost of $16.1
million since the program’s inception. Future repurchases are
expected to be funded from cash on hand and cash flows from
operating activities.”
The Company currently has no outstanding debt and maintains an
unused $3.5 million credit facility. The Company believes that
current cash balances and the borrowings available under its credit
facility 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, 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. 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
December 31,
2014
2013
Assets
Current Assets
Cash $ 5,495,000 $ 8,215,000 Investments 2,840,000 1,606,000
Accounts receivable, net of allowance for doubtful accounts of
$60,000 and $85,000 as of December 31, 2014 and 2013, respectively
5,333,000 4,815,000 Accounts receivable, related party 333,000
256,000 Inventories 16,544,000 14,140,000 Prepaid expenses
4,472,000 2,968,000 Deferred income tax assets 486,000 640,000
Total current assets 35,503,000 32,640,000
Property and equipment, net
3,315,000 3,068,000
Goodwill
55,000 55,000
Definite-lived intangible assets, net
71,000 92,000
Equity investments in and advances to
unconsolidated affiliate
3,008,000 2,708,000 Total assets $ 41,952,000 $ 38,563,000
Liabilities and Shareholders'
Equity
Current Liabilities
Accounts payable $ 1,099,000 $ 689,000 Accrued liabilities
1,195,000 1,036,000 Total current liabilities 2,294,000 1,725,000
Deferred income tax liabilities
1,752,000 1,257,000 Total liabilities 4,046,000 2,982,000
Commitments
Shareholders' equity:
Common stock, $.01 par value: 50,000,000 shares authorized;
18,348,556 and 18,878,109 shares outstanding as of December 31,
2014 and 2013, respectively 183,000 189,000 Additional paid-in
capital 17,833,000 18,994,000 Accumulated other comprehensive
income 1,375,000 625,000 Retained earnings 18,515,000 15,773,000
Total shareholders' equity 37,906,000 35,581,000 Total liabilities
and shareholders' equity $ 41,952,000 $ 38,563,000
Condensed Consolidated Statements of Income
Quarter Ended
Year Ended December 31, December 31,
2014 2013 2014 2013
Net sales $ 12,228,000 $ 10,508,000 $ 47,649,000 $
43,806,000 Cost of goods sold, excluding depreciation and
amortization 7,781,000 6,575,000 30,197,000 27,574,000 Gross profit
4,447,000 3,933,000 17,452,000 16,232,000 Operating
expenses: Selling, general and administrative 3,555,000 3,230,000
13,513,000 13,115,000 Depreciation and amortization 159,000 188,000
721,000 722,000 Total operating expenses 3,714,000 3,418,000
14,234,000 13,837,000 Income from operations 733,000 515,000
3,218,000 2,395,000 Other income: Equity in income of
unconsolidated affiliate 84,000 38,000 300,000 210,000 Gain on sale
of marketable securites and investments in common stock warrants -
350,000 409,000 350,000 Interest, net 3,000 6,000 16,000 9,000
Total other income 87,000 394,000 725,000 569,000 Income
before provision for income taxes $ 820,000 $ 909,000 3,943,000
2,964,000 Provision for income taxes 208,000 225,000
1,201,000 885,000 Net income $ 612,000 $ 684,000 $ 2,742,000
$ 2,079,000 Basic earnings per common share $ 0.03 $
0.04 $ 0.15 $ 0.11 Diluted earnings per common share $ 0.03
$ 0.04 $ 0.15 $ 0.11 Basic weighted average common
shares outstanding 18,369,640 18,838,166 18,414,775 19,203,406
Diluted weighted average common shares outstanding
18,713,830 18,987,579 18,724,185 19,227,867
Company Contact:Alpha Pro Tech,
Ltd.Al Millar/Donna Millar,
905-479-0654ir@alphaprotech.comorInvestor
Relations Contact:Hayden IRCameron Donahue,
651-653-1854cameron@haydenir.com
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