Alpha Pro Tech, Ltd. Announces Financial Results for the First
Quarter Ended March 31, 2017
Net Income Increased 8.5% as a Result of Continued Focus on
Management of Product
NOGALES, AZ-(Marketwired - May 9, 2017) - Alpha Pro Tech, Ltd.
(NYSE MKT: APT)
- Net income for the first quarter of 2017 increased 8.5% to
$550,000, or $0.04 per diluted share, compared to $507,000, or
$0.03 per diluted share, for the same period of 2016
- Gross margin for the first quarter of 2017 increased to 39.9%,
up from 35.8% in the first quarter of 2016
- Company repurchased and retired 362,700 shares of common stock
at a cost of $1.2 million
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 quarter ended March 31,
2017.
Lloyd Hoffman, CEO of Alpha Pro Tech, commented, "Our earnings
increased year-over-year as a result of our continued efforts to
reduce product costs while controlling operating expenses, despite
a softness in Building Supply sales, particularly in our synthetic
roof underlayment line of products. A corporate mandate from one of
our large distributors to lower inventory levels was a significant
driver of lower sales in the Building Supply segment for the
quarter. We expect that Building Supply segment sales will
accelerate in the latter half of 2017 and may reach record
levels."
"We further reduced inventory levels by another 3% compared to
year-end 2016 in an effort to further improve efficiencies in our
operations, optimize the use of capital and generate positive cash
from operations to support our share repurchase program," concluded
Hoffman.
Net sales Consolidated sales for the first quarter of 2017 were
$10.8 million, compared to $11.8 million in the first quarter of
2016. Building Supply segment sales for the three months ended
March 31, 2017 decreased by 12.1% to $5.9 million, compared to $6.8
million for the same period of 2016. The sales mix of the Building
Supply segment for the three months ended March 31, 2017 was 54%
for synthetic roof underlayment, 41% 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 first quarter of 2016. Sales for the Disposable Protective
Apparel segment for the three months ended March 31, 2017 decreased
13.9% to $3.3 million, compared to $3.8 million for the same period
of 2016. Infection Control segment sales for the three months ended
March 31, 2017 increased by $249,000, or 19.6%, to $1.5 million,
compared to $1.3 million for the same period of 2016.
Gross profit Gross profit for the first quarter of 2017
increased by 1.2% to $4.3 million, or 39.9% gross profit margin,
compared to $4.2 million, or 35.8% gross profit margin, for the
same period of 2016.
Selling, general and administrative expenses Selling, general
and administrative expenses of $3.5 million for the first quarter
of 2017 were essentially unchanged from the same period of 2016. As
a percentage of net sales, selling, general and administrative
expenses increased to 32.3% for the first quarter ended March 31,
2017, up from 29.2% for the same period of 2016.
Net income Net income increased for the first quarter of 2017 to
$550,000, compared to $507,000 for the same period of 2016, an
increase of $43,000, or 8.5%. Net income as a percentage of net
sales for the first quarter of 2017 and 2016 was 5.1% and 4.3%,
respectively. Basic and diluted earnings per common share for the
first quarters of 2017 and 2016 were $0.04 and $0.03,
respectively.
Balance Sheet The consolidated balance sheet remained strong
with a cash balance of $7.9 million as of March 31, 2017, a
decrease of $1.6 million from $9.5 million as of December 31, 2016.
The change in cash position was due to cash provided by operating
activities of $162,000, offset by cash used in investing activities
of $584,000 and cash used in financing activities, solely the
repurchase of our common stock, of $1.2 million. The Company ended
the quarter with working capital of $25.6 million and a current
ratio of 14:1, compared to a 12:1 current ratio as of December 31,
2016.
Inventory decreased by $315,000, or 2.9%, to $10.7 million as of
March 31, 2017 from $11.0 million as of December 31, 2016. The
decrease was primarily due to a decrease in inventory for the
Disposable Protective Apparel segment of $612,000, or 16.4%, to
$3.1 million, and a decrease in inventory for the Infection Control
segment of $123,000, or 5.3%, to $2.2 million, partially offset by
an increase in inventory for the Building Supply segment of
$420,000, or 8.6%, to $5.3 million.
Colleen McDonald, Chief Financial Officer, commented, "At the
end of the quarter, we had $1.4 million available for additional
stock purchases under our stock repurchase program. During the
quarter we repurchased 362,700 shares of common stock at a cost of
$1.2 million, bringing the program total to 15,334,231 shares of
common stock at a cost of $26.2 million since the program's
inception. All stock is retired upon repurchase, and 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,
customer demand 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
March 31, December 31,
2017 2016 (1)
------- -------
Assets
Current assets:
Cash $ 7,884,000 $ 9,456,000
Investments 500,000 607,000
Accounts receivable, net of allowance for
doubtful accounts of $67,000 and $66,000 as
of March 31, 2017 and December 31, 2016,
respectively 5,514,000 4,648,000
Accounts receivable, unconsolidated
affiliate 109,000 174,000
Inventories 10,679,000 10,994,000
Prepaid expenses and other current assets 2,956,000
3,346,000
Deferred income tax assets - 438,000
------- -------
Total current assets 27,642,000 29,663,000
Property and equipment, net 3,078,000 2,646,000
Goodwill 55,000 55,000
Definite-lived intangible assets, net 32,000 34,000
Equity investment in unconsolidated affiliate 3,643,000
3,538,000
------- -------
Total assets $ 34,450,000 $ 35,936,000
============= =============
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable $ 1,256,000 $ 1,005,000
Accrued liabilities 786,000 1,460,000
------- -------
Total current liabilities 2,042,000 2,465,000
Deferred income tax liabilities 340,000 807,000
------- -------
Total liabilities 2,382,000 3,272,000
------- -------
Commitments
Shareholders' equity:
Common stock, $.01 par value: 50,000,000
shares authorized;
15,048,856 and 15,411,556 shares outstanding
as of
March 31, 2017 and December 31, 2016,
respectively 150,000 154,000
Additional paid-in capital 8,059,000 9,990,000
Accumulated other comprehensive loss (281,000) (204,000)
Retained earnings 24,140,000 22,724,000
------- -------
Total shareholders' equity 32,068,000 32,664,000
------- -------
Total liabilities and shareholders' equity $ 34,450,000 $
35,936,000
============= =============
(1) The condensed consolidated balance sheet as of December 31,
2016 has
been prepared using information from the audited consolidated
balance
sheet as of that date.
Condensed Consolidated Income Statements
For the Three Months Ended
March 31,
---------------
2017 2016
------- -------
Net sales $ 10,751,000 $ 11,847,000
Cost of goods sold, excluding depreciation and
amortization 6,457,000 7,602,000
------- -------
Gross profit 4,294,000 4,245,000
------- -------
Operating expenses:
Selling, general and administrative 3,474,000 3,457,000
Depreciation and amortization 154,000 154,000
------- -------
Total operating expenses 3,628,000 3,611,000
------- -------
Income from operations 666,000 634,000
------- -------
Other income:
Equity in income of unconsolidated affiliate 105,000 98,000
Interest income, net 1,000 1,000
------- -------
Total other income 106,000 99,000
------- -------
Income before provision for income taxes 772,000 733,000
Provision for income taxes 222,000 226,000
------- -------
Net income $ 550,000 $ 507,000
============== ==============
Basic earnings per common share $ 0.04 $ 0.03
============== ==============
Diluted earnings per common share $ 0.04 $ 0.03
============== ==============
Basic weighted average common shares
outstanding 15,207,659 17,669,331
============== ==============
Diluted weighted average common shares
outstanding 15,301,801 17,669,331
============== ==============
Contact Information
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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