Alpha Pro Tech, Ltd. Announces Financial Results for the Second
Quarter
Income From Operations Increased 343% for the Second Quarter
NOGALES, AZ-(Marketwired - Aug 3, 2016) - Alpha Pro Tech, Ltd.
(NYSE MKT: APT)
- Consolidated sales increased 5.1% to $12.7 million for the
quarter ended June 30, 2016, compared to $12.1 million for the
quarter ended June 30, 2015.
- Income from operations increased 343% to $1.1 million for the
quarter ended June 30, 2016, compared to $246,000 for the quarter
ended June 30, 2015.
- Net income for the second quarter of 2016 increased 177% to
$797,000, compared to $288,000 for the same period in 2015.
- Diluted earnings per common share for the quarter ended June
30, 2016 were $0.05, compared to $0.02 for the quarter ended June
30, 2015.
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 three and six month
periods ended June 30, 2016.
Consolidated sales for the second quarter of 2016 increased 5.1%
to $12.7 million from $12.1 million for the comparable quarter of
2015. Building Supply segment sales for the three months ended June
30, 2016 increased by 12.0% to a second quarter record of $7.9
million, compared to $7.1 million for the same period of 2015. The
sales mix of the Building Supply segment for the three months ended
June 30, 2016 was 63% for synthetic roof underlayment, 32% 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 second quarter of 2015. Sales for the
Disposable Protective Apparel segment for the three months ended
June 30, 2016 decreased 5.6% to $3.6 million, compared to $3.8
million for the same period of 2015. Infection Control segment
sales for the three months ended June 30, 2016 decreased by
$25,000, or 2.1%, to $1.16 million, compared to $1.19 million for
the same period of 2015.
Lloyd Hoffman, Chief Executive Officer of Alpha Pro Tech,
commented, "Double-digit sales growth in our Building Supply
segment was driven by strong demand across all of our product
lines. We are optimistic about continued low, double-digit growth
in this segment for all of 2016. Market demand coupled with our
continued focus on reducing costs are having a positive impact on
our income as well as our competitive positioning."
"As part of our continuing commitment to our shareholders, the
board of directors authorized a $2.0 million expansion of our
existing share repurchase program during the quarter," said
Hoffman. "This program expansion, combined with our efforts to
reduce costs to drive margin expansion, demonstrates our focus on
delivering increased value to our shareholders."
Consolidated sales for the six months ended June 30, 2016
increased 7.9% to a first half of the year record of $24.6 million,
up from $22.7 million for the comparable period of 2015. This
increase was due to increased sales in the Building Supply and the
Infection Control segments, which was partially offset by decreased
sales in the Disposable Protective Apparel segment.
Building Supply segment sales for the six months ended June 30,
2016 increased by $1.8 million, or 13.9%, to a first half of the
year record of $14.7 million, compared to $12.9 million for the
same period of 2015. This increase was due to increased sales
across all product lines, including a 10.5% increase in sales of
housewrap, a 13.2% increase in sales of synthetic roof underlayment
and a 15.1% increase in sales of other woven material.
Gross profit for the three months ended June 30, 2016 increased
by 15.9% to $4.5 million, compared to $3.9 million for the same
period in 2015. The gross profit margin was 35.7% for the three
months ended June 30, 2016, compared to 32.4% for the same period
of 2015. Gross profit for the six months ended June 30, 2016
increased 13.5% to $8.8 million, or 35.8% gross profit margin, from
$7.7 million, or 34.0% gross profit margin, for the same period of
2015. Management expects gross profit margin to be in a similar
range for the balance of 2016 and is continuing to work on reducing
product costs.
Selling, general and administrative expenses decreased by 5.3%
to $3.3 million for the second quarter of 2016 from $3.5 million
for the same quarter of 2015. As a percentage of net sales,
selling, general and administrative expenses decreased to 26.2% for
the three months ended June 30, 2016 from 29.1% for the same period
of 2015. Selling, general and administrative expenses decreased by
$306,000, or 4.3%, to $6.8 million for the six months ended June
30, 2016, from $7.1 million for the six months ended June 30, 2015.
As a percentage of net sales, selling, general and administrative
expenses decreased to 27.7% for the six months ended June 30, 2016,
from 31.2% for the same period of 2015.
Income from operations increased by 342.7% to $1.1 million for
the three months ended June 30, 2016, compared to $246,000 for the
three months ended June 30, 2015. Income from operations increased
by 433.4% to $1.7 million for the six months ended June 30, 2016,
compared to $323,000 for the six months ended June 30, 2015. The
increased income from operations for the three and six month
periods ended June 30, 2016 was primarily due to an increase in
gross profit, a decrease in selling, general and administrative
expenses and a decrease in depreciation and amortization
expense.
Net income increased for the three months ended June 30, 2016 to
$797,000, compared to $288,000 for the same period in 2015, an
increase of $509,000, or 176.7%. This increase was due to an
increase in income before provision for income taxes of $806,000,
partially offset by an increase in provision for income taxes of
$297,000. Net income as a percentage of net sales for the three
months ended June 30, 2016 and 2015 was 6.3% and 2.4%,
respectively. Basic and diluted earnings per common share for the
three months ended June 30, 2016 and 2015 were $0.05 and $0.02,
respectively.
Net income for the six months ended June 30, 2016 was $1.3
million, compared to $436,000 for the same period in 2015, an
increase of $868,000, or 199.1%. Net income as a percentage of net
sales for the six months ended June 30, 2016 was 5.3%, and net
income as a percentage of net sales for the same period of 2015 was
1.9%. Diluted earnings per common share for the six months ended
June 30, 2016 and 2015 were $0.07 and $0.02, respectively.
The consolidated balance sheet remained strong with a current
ratio of 16:1 as of June 30, 2016, compared to a 15:1 current ratio
as of December 31, 2015, and a cash balance of $10.6 million. The
Company ended the second quarter of 2016 with working capital of
$30.3 million.
Inventory decreased by $3.7 million, or 22.8%, to $12.7 million
as of June 30, 2016 from $16.4 million as of December 31, 2015. The
decrease was primarily due to a decrease in inventory for the
Disposable Protective Apparel segment of $1.0 million, or 17.4%, a
decrease in inventory for the Building Supply segment of $2.5
million, or 31.3%, and a decrease in inventory for the Infection
Control segment of $287,000, or 10.2%.
Colleen McDonald, Chief Financial Officer, commented, "At the
end of the second quarter of 2016, we had $1.5 million available
for additional stock purchases under our stock repurchase program.
Year-to-date we have repurchased 890,100 shares of common stock at
a cost of $1.8 million, bringing the program total to 13,407,731
shares of common stock at a cost of $19,994,000 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.
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Condensed Consolidated Balance Sheets (Unaudited)
|
|
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June 30,
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|
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December 31,
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|
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2016
|
|
|
2015 (1)
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|
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Assets
|
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
|
|
Cash
|
|
$
|
10,588,000
|
|
|
$
|
9,681,000
|
|
|
Investments
|
|
|
574,000
|
|
|
|
656,000
|
|
|
Accounts receivable, net of allowance for doubtful accounts of
$61,000 and $46,000 as of June 30, 2016 and December 31, 2015,
respectively
|
|
|
5,113,000
|
|
|
|
2,762,000
|
|
|
Accounts receivable, unconsolidated affiliate
|
|
|
2,000
|
|
|
|
8,000
|
|
|
Inventories
|
|
|
12,656,000
|
|
|
|
16,398,000
|
|
|
Prepaid expenses and other current assets
|
|
|
2,942,000
|
|
|
|
3,092,000
|
|
|
Deferred income tax assets
|
|
|
484,000
|
|
|
|
484,000
|
|
|
|
Total current assets
|
|
|
32,359,000
|
|
|
|
33,081,000
|
|
|
|
|
|
|
|
|
|
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Property and equipment, net
|
|
|
2,806,000
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|
|
|
2,907,000
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|
|
Goodwill
|
|
|
55,000
|
|
|
|
55,000
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|
|
Definite-lived intangible assets, net
|
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|
42,000
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|
|
51,000
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Equity investments in unconsolidated affiliate
|
|
|
3,231,000
|
|
|
|
3,040,000
|
|
|
|
Total assets
|
|
$
|
38,493,000
|
|
|
$
|
39,134,000
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|
|
|
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|
|
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Liabilities and Shareholders' Equity
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Current liabilities:
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|
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|
|
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Accounts payable
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$
|
965,000
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|
|
$
|
1,027,000
|
|
|
Accrued liabilities
|
|
|
1,087,000
|
|
|
|
1,128,000
|
|
|
|
Total current liabilities
|
|
|
2,052,000
|
|
|
|
2,155,000
|
|
|
|
|
|
|
|
|
|
|
|
Deferred income tax liabilities
|
|
|
820,000
|
|
|
|
867,000
|
|
|
|
Total liabilities
|
|
|
2,872,000
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|
|
|
3,022,000
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|
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|
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Commitments
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Shareholders' equity:
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|
|
|
|
|
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Common stock, $.01 par value: 50,000,000 shares authorized;
16,960,356 and 17,850,456 shares outstanding as of June 30, 2016
and December 31, 2015, respectively
|
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|
170,000
|
|
|
|
178,000
|
|
|
Additional paid-in capital
|
|
|
14,817,000
|
|
|
|
16,526,000
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|
|
Accumulated other comprehensive loss
|
|
|
(226,000
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)
|
|
|
(148,000
|
)
|
|
Retained earnings
|
|
|
20,860,000
|
|
|
|
19,556,000
|
|
|
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Total shareholders' equity
|
|
|
35,621,000
|
|
|
|
36,112,000
|
|
|
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Total liabilities and shareholders' equity
|
|
$
|
38,493,000
|
|
|
$
|
39,134,000
|
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(1)
|
|
The condensed consolidated balance sheet as of December 31, 2015
has been prepared using information from the audited consolidated
balance sheet as of that date.
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Condensed Consolidated Income Statements (Unaudited)
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|
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|
For the Three Months Ended
|
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For the Six Months Ended
|
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|
June 30,
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June 30,
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2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
12,708,000
|
|
$
|
12,095,000
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|
$
|
24,555,000
|
|
$
|
22,749,000
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
Cost of goods sold, excluding depreciation and amortization
|
|
|
8,168,000
|
|
|
8,179,000
|
|
|
15,770,000
|
|
|
15,008,000
|
|
|
Gross profit
|
|
|
4,540,000
|
|
|
3,916,000
|
|
|
8,785,000
|
|
|
7,741,000
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|
|
|
|
|
|
|
|
|
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Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
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Selling, general and administrative
|
|
|
3,334,000
|
|
|
3,520,000
|
|
|
6,791,000
|
|
|
7,097,000
|
|
Depreciation and amortization
|
|
|
117,000
|
|
|
150,000
|
|
|
271,000
|
|
|
321,000
|
|
|
Total operating expenses
|
|
|
3,451,000
|
|
|
3,670,000
|
|
|
7,062,000
|
|
|
7,418,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from operations
|
|
|
1,089,000
|
|
|
246,000
|
|
|
1,723,000
|
|
|
323,000
|
|
|
|
|
|
|
|
|
|
|
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Other income:
|
|
|
|
|
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|
|
|
|
|
|
|
|
Equity in income of unconsolidated affiliate
|
|
|
93,000
|
|
|
117,000
|
|
|
191,000
|
|
|
215,000
|
|
Interest income, net
|
|
|
1,000
|
|
|
14,000
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|
|
2,000
|
|
|
15,000
|
|
|
Total other income
|
|
|
94,000
|
|
|
131,000
|
|
|
193,000
|
|
|
230,000
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
Income before provision for income taxes
|
|
|
1,183,000
|
|
|
377,000
|
|
|
1,916,000
|
|
|
553,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income taxes
|
|
|
386,000
|
|
|
89,000
|
|
|
612,000
|
|
|
117,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
797,000
|
|
$
|
288,000
|
|
$
|
1,304,000
|
|
$
|
436,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per common share
|
|
$
|
0.05
|
|
$
|
0.02
|
|
$
|
0.07
|
|
$
|
0.02
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per common share
|
|
$
|
0.05
|
|
$
|
0.02
|
|
$
|
0.07
|
|
$
|
0.02
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic weighted average common shares outstanding
|
|
|
17,211,268
|
|
|
18,208,947
|
|
|
17,440,299
|
|
|
18,254,188
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted weighted average common shares outstanding
|
|
|
17,211,268
|
|
|
18,308,806
|
|
|
17,440,299
|
|
|
18,388,228
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Company Contact:Alpha Pro Tech, Ltd.Al Millar/Donna
Millar905-479-0654e-mail: ir@alphaprotech.comInvestor Relations
Contact:Hayden IRCameron Donahue651-653-1854e-mail:
cameron@haydenir.com
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