Alpha Pro Tech, Ltd. Announces Financial Results for the Fourth
Quarter and Year Ended December 31, 2015
Fourth Quarter Net Sales of $10.0 Million and 2015 Net Sales of
$45.0 Million
NOGALES, AZ-(Marketwired - Mar 2, 2016) - 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,
2015.
Consolidated sales for the fourth quarter of 2015 decreased
18.0% to $10.0 million from $12.2 million for the comparable
quarter of 2014. Building Supply segment sales for the fourth
quarter of 2015 decreased by 9.7% to $5.5 million, compared to $6.1
million for the same period of 2014. The sales mix of the Building
Supply segment for the fourth quarter of 2015 was 63% for synthetic
roof underlayment, 35% for housewrap and 2% for other woven
material. This compared to 61% for synthetic roof underlayment, 35%
for housewrap and 4% for other woven material for the fourth
quarter of 2014. Sales for the Disposable Protective Apparel
segment for the fourth quarter of 2015 decreased 14.1% to $3.5
million, compared to $4.1 million for the same period of 2014. The
decrease was primarily due to decreased sales to our major
international supply chain partner, as well as sales in the fourth
quarter of 2014 resulting from the Ebola outbreak, partially offset
by increased sales to our regional and national distributors.
Infection Control segment sales for the fourth quarter of 2015
decreased by 49.5%, or $1.0 million, to $1.1 million, compared to
$2.1 million for the same period of 2014, also due to the increase
in sales resulting from the Ebola outbreak in the fourth quarter of
2014.
Consolidated sales for the year ended December 31, 2015
decreased by 5.7%, or $2.6 million, to $45.0 million from $47.6
million for the year ended December 31, 2014. This decrease
consisted of decreased sales in the Building Supply segment of $1.7
million, decreased sales of $9,000 in the Disposable Protective
Apparel segment and decreased sales of $936,000 in the Infection
Control segment.
Building Supply segment sales in 2015 decreased 6.3%, or $1.7
million, to $25.8 million, compared to $27.5 million in 2014. The
decrease in 2015 was primarily due to a 4.4% decrease in sales of
REX Wrap Housewrap, a 5.9% decrease in sales of synthetic roof
underlayment and a 5.7% decrease in sales of other woven material.
The sales mix of the Building Supply segment for the year ended
December 31, 2015 was 62% for synthetic roof underlayment, 33% for
housewrap and 5% for other woven material. This compared to 63% for
synthetic roof underlayment, 33% for housewrap and 4% for other
woven material for the year ended December 31, 2014.
Sales for the Disposable Protective Apparel segment for the year
ended December 31, 2015 decreased by $9,000, or 0.1%, to $14.7
million, compared to 2014. The slight decrease was primarily due to
a decrease in sales to national and regional distributors,
partially offset by an increase in sales to our major international
supply chain partner.
Infection Control segment sales for the year ended December 31,
2015 decreased by $936,000, or 17.2%, to $4.5 million, compared to
$5.4 million for 2014. Shield sales were down by 43.9%, or
$960,000, to $1.2 million, and mask sales were up by 0.7%, or
$24,000, to $3.3 million, all compared to the year ended December
31, 2014. The overall decrease in this segment was primarily due to
increased sales in the fourth quarter of 2014 as a result of the
Ebola outbreak.
Al Millar, President of Alpha Pro Tech, commented, "Despite
difficult comparable sales from the increases due to the Ebola
outbreak in 2014, we generated approximately $6.0 million from
operating activities cash flow in 2015. In our Building Supply
segment, sales of our new TECHNO family of synthetic roof
underlayment increased 32% during 2015. We expect growth in the
Building Supply segment in 2016 in conjunction with a return of
positive sales growth in our other two segments."
Gross profit for the fourth quarter of 2015 decreased by 23.0%
to $3.4 million, or 34.2% gross profit margin, compared to $4.4
million, or 36.4% gross profit margin, for the same period of 2014.
Gross profit for the year ended December 31, 2015 decreased by $1.5
million, or 8.5%, to $16.0 million from $17.5 million for 2014.
Gross profit margin was 35.5% for the year ended December 31, 2015,
compared to 36.6% for 2014.
Gross profit margin was positively affected in 2015 by the U.S.
Customs and Border Protection issuing a retroactive Generalized
System of Preferences (GSP) refund for duty paid on eligible
products. The GSP is a U.S. trade program designed to promote
economic growth in the developing world by providing preferential
duty-free entry for products from designated beneficiary countries.
The GSP duty refund positively affected gross profit margin in the
third quarter of 2015. For the year ended December 31, 2015, the
GSP duty refund positively affected the gross profit margin by
1.5%. However, gross profit margin was negatively affected in 2015
by competitive pricing pressures and increased rebates in the
Building Supply and Disposable Protective Apparel segments and
increased manufacturing costs, especially in the Disposable
Protective Apparel segment, which more than offset the favorable
impact of the GSP duty refund.
Selling, general and administrative expenses decreased by 20.8%
to $2.8 million for the fourth quarter of 2015 from $3.5 million
for the same period of 2014. As a percentage of net sales, selling,
general and administrative expenses decreased to 28.0% for the
fourth quarter ended December 31, 2015 from 29.1% for the same
period of 2014.
Selling, general and administrative expenses increased by
$281,000, or 2.1%, to $13.8 million for the year ended December 31,
2015 from $13.5 million for the year ended December 31, 2014. As a
percentage of net sales, selling, general and administrative
expenses increased to 30.7% for the year ended December 31, 2015
from 28.4% for 2014.
Income from operations decreased by $298,000, or 40.6%, to
$435,000 for the fourth quarter of 2015, compared to income from
operations of $733,000 for the fourth quarter of 2014. Income from
operations decreased by $1.7 million, or 54.2%, to $1.5 million for
the year ended December 31, 2015, compared to income from
operations of $3.2 million for the year ended December 31,
2014.
Net income decreased for the fourth quarter of 2015 to $300,000,
compared to $612,000 for the same period of 2014, a decrease of
$312,000, or 51.0%. Net income as a percentage of net sales for the
fourth quarter of 2015 and 2014 was 3.0% and 5.0%, respectively.
Basic and diluted earnings per common share for the fourth quarters
of 2015 and 2014 were $0.02 and $0.03, respectively.
Net income for the year ended December 31, 2015 was $1.0
million, compared to net income of $2.7 million for the year ended
December 31, 2014, a decrease of $1.7 million, or 62.0%. The net
income decrease was primarily due to a decrease in income before
provision for income taxes of $2.4 million, partially offset by a
decrease in income taxes of $721,000. Net income as a percentage of
sales for the year ended December 31, 2015 was 2.3%, and net income
as a percentage of sales for the year ended December 31, 2014 was
5.8%. Basic and diluted earnings per common share for each of the
years ended December 31, 2015 and 2014 were $0.06 and $0.15,
respectively.
The consolidated balance sheet remained strong with a cash
balance of $9.7 million as of December 31, 2015, an increase of
$4.2 million from $5.5 million as of December 31, 2014. The
increase in cash was due to cash provided by operating activities
of $6.0 million, partially offset by cash used in investing
activities of $449,000 and cash used in financing activities of
$1.3 million. The Company completed 2015 with working capital of
$30.9 million.
Inventories decreased by $146,000, or 0.9%, to $16.4 million as
of December 31, 2015 from $16.5 million as of December 31, 2014.
The decrease was primarily due to a decrease in inventories for the
Building Supply segment of $854,000, or 9.8%, to $7.8 million and a
decrease in inventories for the Infection Control segment of
$501,000, or 15.1%, to $2.8 million, partially offset by an
increase in inventories for the Disposable Protective Apparel
segment of $1.2 million, or 26.5%, to $5.8 million. Inventory as of
the end of the fourth quarter of 2015 decreased $1.5 million
compared to the third quarter of 2015, with all three segments
down, led by a $1.1 million decrease in the Building Supply
segment.
Colleen McDonald, Chief Financial Officer, commented, "During
2015, we repurchased 973,100 shares of common stock at a cost of
$2.1 million, bringing the repurchase program total to 12.5 million
shares of common stock at a cost of $18.2 million since the
program's inception. At the end of 2015, we had $1.3 million
available for additional stock purchases under our stock repurchase
program. 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 Pro Tech 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 relating to
estimated and projected earnings, margins, costs, expenditures,
cash flows, sources of capital, growth rates, 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.
|
|
|
|
|
|
Condensed Consolidated Balance Sheets
|
|
|
|
|
|
|
|
December 31,
|
|
|
2015
|
|
|
2014
|
Assets
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
|
Cash
|
|
$
|
9,681,000
|
|
|
$
|
5,495,000
|
|
Investments
|
|
|
656,000
|
|
|
|
2,840,000
|
|
Accounts receivable, net of allowance for doubtful accounts of
$46,000 and $60,000 as of December 31, 2015 and 2014,
respectively
|
|
|
2,762,000
|
|
|
|
5,333,000
|
|
Accounts receivable, related party
|
|
|
8,000
|
|
|
|
333,000
|
|
Inventories
|
|
|
16,398,000
|
|
|
|
16,544,000
|
|
Prepaid expenses
|
|
|
3,092,000
|
|
|
|
4,472,000
|
|
Deferred income tax assets
|
|
|
484,000
|
|
|
|
486,000
|
|
|
Total current assets
|
|
|
33,081,000
|
|
|
|
35,503,000
|
|
|
|
|
|
|
|
|
Property and equipment, net
|
|
|
2,907,000
|
|
|
|
3,315,000
|
Goodwill
|
|
|
55,000
|
|
|
|
55,000
|
Definite-lived intangible assets, net
|
|
|
51,000
|
|
|
|
71,000
|
Equity investments in unconsolidated affiliate
|
|
|
3,040,000
|
|
|
|
3,008,000
|
|
|
Total assets
|
|
$
|
39,134,000
|
|
|
$
|
41,952,000
|
|
|
|
|
|
|
|
|
Liabilities and Shareholders' Equity
|
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|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
1,027,000
|
|
|
$
|
1,099,000
|
|
Accrued liabilities
|
|
|
1,128,000
|
|
|
|
1,195,000
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|
|
Total current liabilities
|
|
|
2,155,000
|
|
|
|
2,294,000
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|
|
|
|
|
|
|
|
Deferred income tax liabilities
|
|
|
867,000
|
|
|
|
1,752,000
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|
Total liabilities
|
|
|
3,022,000
|
|
|
|
4,046,000
|
|
|
|
|
|
|
|
|
Commitments
|
|
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|
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|
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Shareholders' equity:
|
|
|
|
|
|
|
|
|
Common stock, $.01 par value: 50,000,000 shares authorized;
17,850,456 and 18,348,556 shares outstanding as of December 31,
2015 and 2014, respectively
|
|
|
178,000
|
|
|
|
183,000
|
|
Additional paid-in capital
|
|
|
16,526,000
|
|
|
|
17,833,000
|
|
Accumulated other comprehensive income (loss)
|
|
|
(148,000
|
)
|
|
|
1,375,000
|
|
Retained earnings
|
|
|
19,556,000
|
|
|
|
18,515,000
|
|
|
Total shareholders' equity
|
|
|
36,112,000
|
|
|
|
37,906,000
|
|
|
Total liabilities and shareholders' equity
|
|
$
|
39,134,000
|
|
|
$
|
41,952,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Condensed Consolidated Statements of Income
|
|
|
|
|
|
|
|
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Three Months Ended
|
|
Year Ended
|
|
|
December 31,
|
|
December 31,
|
|
|
2015
|
|
|
2014
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
10,030,000
|
|
|
$
|
12,228,000
|
|
$
|
44,955,000
|
|
$
|
47,649,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods sold, excluding depreciation and amortization
|
|
|
6,604,000
|
|
|
|
7,781,000
|
|
|
28,983,000
|
|
|
30,197,000
|
|
|
Gross profit
|
|
|
3,426,000
|
|
|
|
4,447,000
|
|
|
15,972,000
|
|
|
17,452,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative
|
|
|
2,815,000
|
|
|
|
3,555,000
|
|
|
13,794,000
|
|
|
13,513,000
|
|
Depreciation and amortization
|
|
|
176,000
|
|
|
|
159,000
|
|
|
703,000
|
|
|
721,000
|
|
|
Total operating expenses
|
|
|
2,991,000
|
|
|
|
3,714,000
|
|
|
14,497,000
|
|
|
14,234,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from operations
|
|
|
435,000
|
|
|
|
733,000
|
|
|
1,475,000
|
|
|
3,218,000
|
Other income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in income (loss) of unconsolidated affiliate
|
|
|
(18,000
|
)
|
|
|
84,000
|
|
|
32,000
|
|
|
300,000
|
|
Gain on sale of marketable securities and investment in common
stock warrants
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|
|
-
|
|
|
|
-
|
|
|
-
|
|
|
409,000
|
|
Interest income (expense), net
|
|
|
(1,000
|
)
|
|
|
3,000
|
|
|
14,000
|
|
|
16,000
|
|
|
Total other income (expense)
|
|
|
(19,000
|
)
|
|
|
87,000
|
|
|
46,000
|
|
|
725,000
|
Income before provision for income taxes
|
|
|
416,000
|
|
|
|
820,000
|
|
|
1,521,000
|
|
|
3,943,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income taxes
|
|
|
116,000
|
|
|
|
208,000
|
|
|
480,000
|
|
|
1,201,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
300,000
|
|
|
$
|
612,000
|
|
$
|
1,041,000
|
|
$
|
2,742,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per common share
|
|
$
|
0.02
|
|
|
$
|
0.03
|
|
$
|
0.06
|
|
$
|
0.15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per common share
|
|
$
|
0.02
|
|
|
$
|
0.03
|
|
$
|
0.06
|
|
$
|
0.15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic weighted average common shares outstanding
|
|
|
18,005,304
|
|
|
|
18,369,640
|
|
|
18,197,109
|
|
|
18,414,775
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted weighted average common shares outstanding
|
|
|
18,005,304
|
|
|
|
18,713,830
|
|
|
18,238,364
|
|
|
18,724,185
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Company Contact: Alpha Pro Tech, Ltd. Al Millar/Donna Millar
905-479-0654 e-mail: ir@alphaprotech.com Investor Relations
Contact: Hayden IR Cameron Donahue 651-653-1854 e-mail:
cameron@haydenir.com
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