First Quarter Net Sales Increased 7% to $10.7
MillionIncome from Operations Increased 51% for the First
Quarter
Alpha Pro Tech, Ltd. (NYSE MKT:APT):
- Consolidated sales increased 7.0% to
$10.7 million for the quarter ended March 31, 2015, compared to
$10.0 million for the quarter ended March 31, 2014.
- Operating income increased 51.0% to
$77,000 for the quarter ended March 31, 2015, compared to $51,000
for the quarter ended March 31, 2014.
- Diluted earnings per common share
for the quarter ended March 31, 2015 and 2014 were $0.01.
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 first quarter
ended March 31, 2015.
Consolidated sales for the first quarter increased 7.0% to $10.7
million, from $10.0 million for the comparable quarter of 2014.
Building Supply segment sales for the three months ended March 31,
2015 increased by 5.3% to $5.8 million, compared to $5.5 million
for the same period of 2014. The sales mix of the Building Supply
segment for the three months ended March 31, 2015 was 61% for
synthetic roof underlayment, 34% for housewrap and 5% for other
woven material. This compared to 62% for synthetic roof
underlayment, 34% for housewrap and 4% for other woven material for
the first quarter of 2014. Sales for the Disposable Protective
Apparel segment for the three months ended March 31, 2015 increased
8.4% to $3.6 million, compared to $3.4 million for the same period
of 2014. Infection Control segment sales for the three months ended
March 31, 2015 increased by $124,000, or 11.6%, to $1.2 million,
compared to $1.1 million for the same period of 2014.
Al Millar, President of Alpha Pro Tech, commented, “Today, we
are again reporting solid top-line growth for the quarter across
all segments of our business. Sales for the Disposable Protective
Apparel segment were up a notable 8.4%, and sales for the Infection
Control segment were up an impressive 11.6%. Our Building Supply
segment continues to grow, with the economy version of our
synthetic roof underlayment, TECHNOplyTM, showing particular
strength by more than doubling first quarter sales year over year.
At the same time, we continue to explore opportunities to broaden
our market share through innovative products, with plans to
introduce a third synthetic roof underlayment product, positioned
between our REX™ product and TECHNOplyTM, later this year.”
“Severe weather hampered the construction industry and crippled
certain sectors of the construction market during the first quarter
of 2015, creating some pent up demand for building products that we
expect will lead to sales growth in the coming quarters,” continued
Mr. Millar.
Gross profit for the three months ended March 31, 2015 increased
by 6.0% to $3.8 million, for a 35.9% gross profit margin, compared
to $3.6 million, for a 36.3% gross profit margin, for the same
period in 2014.
Selling, general and administrative (SG&A) expenses
increased by 6.1% to $3.6 million for the first quarter of 2015,
from $3.4 million for the same quarter of 2014. As a percentage of
net sales, SG&A expenses decreased to 33.6% for the three
months ended March 31, 2015, from 33.9% for the same period of
2014. Although SG&A expenses were up, two out of three segments
SG&A percentage increase for the quarter was lower than the
percentage increase in sales for the quarter.
Income from operations increased by $26,000, or 51.0%, to
$77,000 for the three months ended March 31, 2015, compared to
$51,000 for the three months ended March 31, 2014. The increased
income from operations was primarily due to an increase in gross
profit of $215,000 and a decrease in depreciation and amortization
expense of $17,000, partially offset by an increase in SG&A
expenses of $206,000.
Net income decreased for the three months ended March 31, 2015
to $148,000, compared to $269,000 for the same period in 2014, a
decrease of 45.0%. The decrease was primarily due to $191,000 of
pre-tax gains on investments in the first quarter of 2014 and no
such gains in the first quarter of 2015, partially offset by
increased operating income in the first quarter of 2015. Net income
as a percentage of net sales for the three months ended March 31,
2015 and 2014 was 1.4% and 2.7%, respectively. Basic and diluted
earnings per common share for each of the three months ended March
31, 2015 and 2014 was $0.01.
The condensed consolidated balance sheet remained strong with a
current ratio of 11:1 as of March 31, 2015, compared to 15:1 as of
December 31, 2014. The Company ended the first quarter of 2015 with
working capital of $32.5 million. Cash at the end of the quarter
totaled $1.1 million and, as of April 30, 2015, had increased to
$2.6 million, primarily from the collection of accounts receivable,
which are typically higher in the first quarter of the year due to
extended payment terms offered at year end in our Building Supply
segment, consistent with our competitors in this industry.
Inventory increased by $2.6 million, or 15.6%, to $19.1 million
as of March 31, 2015, from $16.5 million as of December 31, 2014.
The increase was primarily due to an increase in inventory for the
Disposable Protective Apparel segment of $805,000, or 17.7%, to
$5.4 million and an increase in inventory for the Building Supply
segment of $1.8 million, or 21.1%, to $10.5 million, partially
offset by a decrease in inventory for the Infection Control segment
of $61,000, or 1.8%, to $3.2 million.
Lloyd Hoffman, Chief Financial Officer, commented, “Inventory
levels were was higher to mitigate supply chain interruptions as a
result of national holidays in Asia and to support future growth,
in particular the increased demand for our TECHNOply™ synthethic
roof underlayment product. As in the past two years, inventory is
expected to be down in the upcoming two quarters, which should have
a positive impact on our cash position.”
Mr. Hoffman continued, “At the end of the quarter, we had $1.1
million available for additional stock purchases under our stock
repurchase program. As of March 31, 2015, we have repurchased
129,100 shares of common stock at a cost of $311,000, bringing the
program total to 11,673,631 shares of common stock at a cost of
$16.4 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,
future product offerings 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 (Unaudited)
March 31,
December 31, 2015 2014 (1) Assets
Current assets: Cash $ 1,105,000 $ 5,495,000 Investments 2,307,000
2,840,000 Accounts receivable, net of allowance for doubtful
accounts of $60,000 and $60,000 as of March 31, 2015 and December
31, 2014, respectively 7,792,000 5,333,000 Accounts receivable,
related party 417,000 333,000 Inventories 19,117,000 16,544,000
Prepaid expenses 4,528,000 4,472,000 Deferred income tax assets
486,000 486,000 Total current assets 35,752,000
35,503,000 Property and equipment, net 3,208,000 3,315,000
Goodwill 55,000 55,000 Definite-lived intangible assets, net 65,000
71,000 Equity investments in unconsolidated affiliate
3,106,000 3,008,000 Total assets $ 42,186,000 $ 41,952,000
Liabilities and Shareholders' Equity Current
liabilities: Accounts payable $ 2,679,000 $ 1,099,000 Accrued
liabilities 540,000 1,195,000 Total current
liabilities 3,219,000 2,294,000 Deferred income tax
liabilities 1,546,000 1,752,000 Total liabilities
4,765,000 4,046,000 Commitments Shareholders'
equity: Common stock, $.01 par value: 50,000,000 shares authorized;
18,219,456 and 18,348,556 shares outstanding as of March 31, 2015
and December 31, 2014, respectively 182,000 183,000 Additional
paid-in capital 17,529,000 17,833,000 Accumulated other
comprehensive income 1,047,000 1,375,000 Retained earnings
18,663,000 18,515,000 Total shareholders' equity
37,421,000 37,906,000 Total liabilities and shareholders'
equity $ 42,186,000 $ 41,952,000
(1) The condensed consolidated balance sheet as of December 31,
2014 has been prepared using information from the audited
consolidated balance sheet as of that date.
Condensed Consolidated Income Statements (Unaudited)
For the Three Months Ended December
31, March 31, 2015
2014 Net sales $ 10,654,000 $ 9,956,000
Cost of goods sold, excluding depreciation
and amortization
6,829,000 6,346,000 Gross profit
3,825,000
3,610,000 Operating expenses: Selling, general and
administrative 3,577,000 3,371,000 Depreciation and amortization
171,000 188,000
Total operating expenses
3,748,000
3,559,000 Income from operations 77,000
51,000 Other income: Equity in income of
unconsolidated affiliate 98,000 110,000 Gain on sale of marketable
securities and investment in common stock warrants - 191,000
Interest, net 1,000 3,000
Total other income
99,000
304,000 Income before provision
for income taxes
176,000
355,000 Provision for income taxes 28,000
86,000 Net income $ 148,000
$ 269,000 Basic earnings per common share $ 0.01 $
0.01 Diluted earnings per common share $ 0.01 $ 0.01
Basic weighted average common shares outstanding 18,299,933
18,859,834 Diluted weighted average common shares
outstanding 18,499,572 19,163,050
Alpha Pro Tech, Ltd.Al Millar or Donna Millar,
905-479-0654ir@alphaprotech.comorInvestor Relations:Hayden
IRCameron Donahue, 651-653-1854cameron@haydenir.com
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