Alpha Pro Tech, Ltd. (NYSE American: 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 full year
ended December 31, 2020.
Lloyd Hoffman, President and Chief Executive
Officer of Alpha Pro Tech, commented, “Alpha Pro Tech delivered an
exceptional year, reaching several milestones, including surpassing
$100 million in revenue, over $27 million in net income and $1.94
diluted earnings per share. 2020 was a record year for face masks,
with sales totaling $41.8 million, blowing past the prior record
set in 2009 during the H1N1 pandemic by a multiple of 2.4 times.
Face mask sales grew during each quarter of 2020. Fourth quarter
face mask sales were $15.4 million, compared $13.4 million in the
third quarter of 2020, $8.5 million in the second quarter of 2020
and $4.5 million in the first quarter of 2020. The increase in face
mask sales was primarily attributable to increased sales of our
proprietary N-95 Particulate Respirator face mask, manufactured in
Salt Lake City, Utah, resulting from increased customer demand
associated with the COVID-19 pandemic.”
Mr. Hoffman continued, “We also saw a record
year in 2020 for face shield sales, which increased by a multiple
of 2.9 times compared to the prior record set in 2009. Sales of our
disposable protective garments increased by an impressive 23.7% in
2020.”
Mr. Hoffman added, “Despite the challenges of
2020, our Building Supply segment experienced a record year with
growth across all product lines. Our TECHNO family of synthetic
roof underlayment products showed continued growth as a result of
strong sales of our TECHNO SB®25 product line, which was
instrumental in the 16.4% growth of this family of products in
2020. Housewrap sales also hit record levels in 2020, and the
addition of housewrap accessories, namely flashing and tape
products, to our portfolio opened up new market distribution
opportunities and contributed to an increase of housewrap sales of
12.5%. Sales of both synthetic roof underlayment and housewrap
benefitted from an increase in new home construction during 2020
and management’s determination to expand the Company’s distribution
reach to cover the new home growth. As anticipated, sales of our
other woven materials improved in 2020, with an increase of 20.2%,
as our historically largest customer for these products resumed its
normal buying pattern.”
Looking Ahead
Mr. Hoffman continued, “As we turn the page on a
record 2020 and look ahead to 2021, we expect the market for our
products to normalize in some respects, although we believe that
sales will remain strong as compared to historical levels. More
specifically:
- So far in 2021, we are witnessing a
softening in the demand for NIOSH-approved N-95 particulate
respirator face masks manufactured by smaller companies like Alpha
Pro Tech, creating some uncertainty in the market. Factors
contributing to this include (i) increased availability of N-95
face masks resulting from manufacturers ramping up production
capacity and actual production, especially in the early months of
the pandemic, (ii) increased competition, driven by more
manufacturers entering the N-95 face mask market since the pandemic
began in 2020, as well as Emergency Use Authorization in the U.S.
that has allowed foreign manufactured, non-NIOSH approved KN-95
face masks, among others, to gain prevalence, (iii) decreased
demand from some distributors and their ultimate consumers in light
of high levels of stockpiled inventory, resulting from a rush to
obtain face masks in the early months of the pandemic, and (iv) the
improvement in outlook with respect to the duration, scope and
severity of the pandemic and the rollout and availability of
vaccines. As a result of these factors, we expect that face mask
sales, primarily sales of our N-95 particulate respirator face
mask, in the first quarter of 2021 will be materially lower than in
the fourth quarter of 2020, although we should still show revenue
growth as compared to the first quarter of 2020. Additionally, we
expect that, due to certain of these factors, specifically the
improvement in outlook with respect to the pandemic and the growing
number of individuals being vaccinated to protect against COVID-19,
face mask sales may continue to decline in future periods.
- We expect that face shield sales
will remain at levels higher than those experienced before the
COVID-19 pandemic.
- Open orders for our disposable
protective garments remain at historically high levels. The
Company’s joint venture through which these products are
manufactured has ramped up production capacity in order to respond
to this demand.
- Based on open orders for both our
synthetic roof underlayment and housewrap products, we expect
continued growth in our Building Supply segment, and the Company
has committed to investing approximately $4.0 million in new
equipment to increase production capacity of this segment. However,
economic uncertainty resulting from the COVID-19 pandemic remains
and could negatively impact demand for these products
longer-term.
Management will continue to carefully monitor
the current dynamic market conditions and work to respond to them
swiftly and effectively.”
2020 Results
Net Sales
4th Quarter 2020 Compared to 4th Quarter
2019
Consolidated sales for the three months ended
December 31, 2020 increased to $29.0 million, from $10.9 million
for the three months ended December 31, 2019, representing an
increase of $18.1 million, or 165.7%. This increase consisted of
increased sales in the Disposable Protective Apparel segment of
$16.3 million and increased sales in the Building Supply segment of
$1.8 million.
Disposable Protective Apparel SegmentSales for
the Disposable Protective Apparel segment for the three months
ended December 31, 2020 increased by $16.3 million, or 342.9%, to
$21.1 million, compared to $4.8 million for the same period of
2019. This segment increase was due to a 2,287% increase in sales
of face masks, a 163.7% increase in sales of face shields and a
28.9% increase in sales of disposable protective garments compared
to the same period of 2019, all primarily due to increased demand
resulting from the COVID-19 pandemic.
The sales mix of the Disposable Protective
Apparel segment for the three months ended December 31, 2020 was
approximately 23% for disposable protective garments, 73% for face
masks and 4% for face shields. This compared to approximately 80%
for disposable protective garments, 13% for face masks and 7% for
face shields for the three months ended December 31, 2019.
Building Supply SegmentBuilding Supply segment
sales for the three months ended December 31, 2020 increased by
$1.8 million, or 28.4%, to $7.9 million, compared to $6.2 million
for the three months ended December 31, 2019. The Building Supply
segment increase was primarily due to an increase in sales of
synthetic roof underlayment of 39.4%, an increase in sales of
housewrap of 17.0% and an increase in sales of other woven material
of 22.0% compared to the same period of 2019.
The sales mix of the Building Supply segment for
the three months ended December 31, 2020 was approximately 52% for
synthetic roof underlayment, 39% for housewrap and 9% for other
woven material. This compared to approximately 48% for synthetic
roof underlayment, 43% for housewrap and 9% for other woven
material for the three months ended December 31, 2019. Our
synthetic roof underlayment product line includes REX SynFelt®, REX
TECHNOply® and TECHNO SB®, and our housewrap product line consists
of REX Wrap®, REX Wrap Plus® and REX Wrap Fortis®.
Fiscal Year 2020 Compared to Fiscal Year
2019
Consolidated sales for the year ended December
31, 2020 increased to a record $102.7 million, from $46.7 million
for the year ended December 31, 2019, representing an increase of
$56.0 million, or 120.1%. This increase consisted of increased
sales in the Disposable Protective Apparel segment of $52.0 million
and increased sales in the Building Supply segment of $4.0 million
compared to 2019.
Disposable Protective Apparel SegmentSales for
the Disposable Protective Apparel segment for the year ended
December 31, 2020 increased by $52.0 million, or 259.0%, to a
record $72.1 million, compared to $20.1 million for 2019, primarily
driven by increased demand resulting from the COVID-19 pandemic.
This segment increase was due to a 1,262% increase in sales of face
masks, a 631.2% increase in face shields and a 23.7% increase in
sales of disposable protective garments. The sales mix of the
Disposable Protective Apparel segment for the year ended December
31, 2020 was approximately 58% for face masks, 15% for face shields
and 27% for disposable protective garments. This sales mix is
compared to approximately 15% for face masks, 8% for face shields
and 77% for disposable protective garments for the year ended
December 31, 2019.
Building Supply SegmentBuilding Supply segment
sales for the year ended December 31, 2020 increased by $4.0
million, or 15.1%, to a record $30.6 million, compared to $26.6
million for the year ended December 31, 2019. The Building Supply
segment increase was primarily due to an increase in sales of
synthetic roof underlayment of 16.4%, an increase in sales of
housewrap of 12.5% and an increase of sales of other woven material
of 20.2% compared to 2019.
The sales mix of the Building Supply segment for
the year ended December 31, 2020 was approximately 48% for
synthetic roof underlayment, 43% for housewrap and 9% for other
woven material. This compared to approximately 47% for synthetic
roof underlayment, 44% for housewrap and 9% for other woven
material for the year ended December 31, 2019.
Gross Profit
Gross profit increased by $10.3 million, or
269.0%, to $14.2 million for the three months ended December 31,
2020, from $3.8 million for the same period of 2019. The gross
profit margin was 48.9% for the three months ended December 31,
2020, compared to 35.2% for the same period of 2019. The gross
profit margin was positively affected by the significant change in
product mix, which was altered due to a surge in customer demand as
a result of the COVID-19 pandemic for face masks, specifically the
Company’s N-95 Particulate Respirator face mask, and face shields,
which generally have a higher gross profit margin than the
Company’s other products.
Gross profit increased by $33.5 million, or
197.4%, to $50.5 million for the year ended December 31, 2020, from
$17.0 million for 2019. The gross profit margin was 49.2% for the
year ended December 31, 2020, compared to 36.4% for the year ended
December 31, 2019.
Gross profit margin in 2020 was significantly
higher than historical levels, but management believes that gross
profit margin could be negatively affected in 2021 as a result of
potential changes in product mix and changes in distribution
channels associated with the pandemic, as well as expected
increases in raw material costs, resin in particular, and ocean
freight and other transportation costs.
Selling, General and Administrative
Expenses
Selling, general and administrative expenses
increased by $1.7 million, or 52.3%, to $4.9 million for the three
months ended December 31, 2020, from $3.2 million for the three
months ended December 31, 2019, largely due to the pandemic
response. However, as a percentage of net sales, selling, general
and administrative expenses decreased to 17.0% for the three months
ended December 31, 2020, from 29.7% for the same period of 2019,
primarily as a result of the growth in net sales.
Selling, general and administrative expenses
increased by $4.8 million, or 36.1%, to $18.2 million for the year
ended December 31, 2020, from $13.3 million for the year ended
December 31, 2019, also largely due to the pandemic response.
Again, however, as a percentage of net sales, selling, general and
administrative expenses decreased to 17.7% for the year ended
December 31, 2020, down from 28.6% for 2019, primarily as a result
of the growth in net sales due to the pandemic.
Income from Operations
Income from operations increased by $8.7
million, or 2,105%, to $9.1 million for the three months ended
December 31, 2020, compared to $411,000 for the same period of
2019. The increased income from operations was primarily due to an
increase in gross profit of $10.3 million, partially offset by an
increase in selling, general and administrative expenses of $1.7
million. Income from operations as a percentage of net sales for
the three months ended December 31, 2020 was 31.2%, compared to
3.8% for the same period of 2019.
Income from operations increased by $28.6
million, or 945.1%, to $31.6 million for the year ended December
31, 2020, compared to $3.0 million for 2019. The increased income
from operations was primarily due to an increase in gross profit of
$33.5 million, partially offset by an increase in selling, general
and administrative expenses of $4.8 million and an increase in
depreciation and amortization expense of $127,000. Income from
operations as a percentage of net sales for the year ended December
31, 2020 was 31.0%, compared to 6.5% for the same period of
2019.
Net Income
Net income for the three months ended December
31, 2020 was $7.4 million, compared to net income of $335,000 for
the same period of 2019, representing an increase of $7.1 million,
or 2,114%. The net income increase was due to an increase in income
before provision for income taxes of $8.9 million, partially offset
by an increase in provision for income taxes of $1.8 million. Net
income as a percentage of net sales for the three months ended
December 31, 2020 was 25.6%, and net income as a percentage of net
sales for the three months ended December 31, 2019 was 3.1%. Basic
earnings per common share for the three months ended December 31,
2020 and 2019 were $0.55 and $0.03, respectively. Diluted earnings
per common share for the three months ended December 31, 2020 and
2019 were $0.53 and $0.03, respectively.
Net income for the year ended December 31, 2020
was $27.1 million, compared to net income of $3.0 million for the
year ended December 31, 2019, representing an increase of $24.1
million, or 8,029%. Net income for 2020 significantly exceeded the
Company’s previous net income record of $9.0 million for the year
ended December 31, 2009, which resulted primarily from increased
sales due to the H1N1 pandemic. Net income as a percentage of net
sales for the year ended December 31, 2020 was 26.4%, and net
income as a percentage of net sales for the year ended December 31,
2019 was 6.4%. Basic earnings per common share for the year ended
December 31, 2020, and 2019 were $2.01 and $0.23, respectively.
Diluted earnings per common share for the year ended December 31,
2020 and 2019 were $1.94 and $0.23, respectively.
Balance Sheet
As of December 31, 2020, the Company had cash of
$23.3 million and working capital of $49.5 million. Cash increased
by 255.7%, or $16.7 million, to $23.3 million as of December 31,
2020, compared to $6.5 million as of December 31, 2019, and working
capital increased by $25.7 million from $23.8 million as of
December 31, 2019. The increase in cash from December 31, 2019 was
due to cash provided by operating activities of $18.3 million,
partially offset by cash used in investing activities of $862,000
and cash used in financing activities of $668,000.
Colleen McDonald, Chief Financial Officer,
commented, “As of December 31, 2020, the company had $4.5 million
available for additional stock purchases under our stock repurchase
program. For the year ended December 31, 2020, we repurchased
223,100 shares of common stock at a cost of $2.7 million. As of
December 31, 2020, we had repurchased a total of 18.1 million
shares of common stock at a cost of $38.0 million through our
repurchase program. We retire all stock upon repurchase. Future
repurchases are expected to be funded from cash on hand and cash
flows from operating activities. We believe that our current cash
balance will be sufficient to satisfy our projected working capital
and planned capital expenditures for the foreseeable future. We
have made approximately $4.0 million in commitments for capital
investments to increase production capacity in our Building supply
segment, of which $1.2 million had been made in deposits as of
December 31, 2020.”
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, expectations regarding order volume, timing of
fulfillment of orders, production capacity and our plans to
ramp up production and expand capacity, product
demand, availability of raw materials and supply chain access,
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 and Quarterly Report on
Form 10-Q. Specifically, these factors include, but are not
limited to, changes in global economic conditions; the effects of
the COVID-19 pandemic on our business and operations, the business
and operations of those within our supply chain and global economic
conditions generally; changes in order volume by our customers; the
inability of our suppliers and contractors to meet our
requirements; potential challenges related to international
manufacturing; our partnership with a joint venture partner; the
inability to protect our intellectual property; competition in our
industry; customer preferences; the timing and market acceptance of
new product offerings; security breaches or disruptions to the
information technology infrastructure; the impact of legal and
regulatory proceedings or compliance challenges; and volatility in
our common stock price and our investments. 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.
Consolidated Balance Sheets
|
|
|
|
|
|
|
December 31, |
|
December 31, |
|
|
|
|
|
|
|
2020 |
|
2019 |
Assets |
|
|
|
|
|
Current
assets: |
|
|
|
|
Cash and cash
equivalents |
$ |
23,292,000 |
|
$ |
6,548,000 |
|
Investments |
- |
|
335,000 |
|
Accounts
receivable, net of allowance for doubtful accounts of |
|
|
|
|
|
$71,000 as of
December 31, 2020 and $53,000 as of December 31, 2019 |
8,132,000 |
|
3,568,000 |
|
Accounts
receivable, related party |
905,000 |
|
724,000 |
|
Inventories |
16,749,000 |
|
11,303,000 |
|
Prepaid
expenses |
6,225,000 |
|
3,587,000 |
|
|
|
Total current
assets |
55,303,000 |
|
26,065,000 |
|
|
|
|
|
|
|
|
|
|
Property and
equipment, net |
4,353,000 |
|
3,943,000 |
Goodwill |
|
55,000 |
|
55,000 |
Definite-lived
intangible assets, net |
7,000 |
|
11,000 |
Right-of-use
assets |
3,535,000 |
|
3,178,000 |
Equity investment
in unconsolidated affiliate |
5,549,000 |
|
4,839,000 |
|
|
|
Total assets |
$ |
68,802,000 |
|
$ |
38,091,000 |
|
|
|
|
|
|
|
|
|
|
Liabilities and Shareholders' Equity |
|
|
|
Current
liabilities: |
|
|
|
|
Accounts
payable |
$ |
1,983,000 |
|
$ |
501,000 |
|
Accrued
liabilities |
2,793,000 |
|
920,000 |
|
Customer advance
payments of orders |
209,000 |
|
- |
|
Lease
liabilities |
867,000 |
|
882,000 |
|
|
|
Total current
liabilities |
5,852,000 |
|
2,303,000 |
|
|
|
|
|
|
|
|
|
|
Lease liabilities,
net of current portion |
2,719,000 |
|
2,337,000 |
Deferred income
tax liabilities, net |
211,000 |
|
224,000 |
|
|
|
Total
liabilities |
8,782,000 |
|
4,864,000 |
Commitments |
|
|
|
Shareholders'
equity: |
|
|
|
|
Common stock, $.01
par value: 50,000,000 shares authorized; |
|
|
|
|
|
13,419,847 and
12,885,273 shares outstanding as of |
|
|
|
|
|
December 31, 2020
and December 31, 2019, respectively |
135,000 |
|
129,000 |
|
Additional paid-in
capital |
409,000 |
|
708,000 |
|
Retained
earnings |
59,476,000 |
|
32,390,000 |
|
|
|
Total
shareholders' equity |
60,020,000 |
|
33,227,000 |
|
|
|
Total liabilities
and shareholders' equity |
$ |
68,802,000 |
|
$ |
38,091,000 |
Consolidated Statements of Income
|
Three Months Ended |
|
Year Ended |
|
December 31, |
|
December 31, |
|
|
2020 |
|
|
|
2019 |
|
|
|
2020 |
|
|
|
2019 |
|
|
|
|
|
|
|
|
|
Net sales |
$ |
29,019,000 |
|
|
$ |
10,920,000 |
|
|
$ |
102,700,000 |
|
|
$ |
46,665,000 |
|
|
|
|
|
|
|
|
|
Cost of goods sold, excluding
depreciation |
|
|
|
|
|
|
|
and amortization |
|
14,840,000 |
|
|
|
7,077,000 |
|
|
|
52,218,000 |
|
|
|
29,693,000 |
|
Gross profit |
|
14,179,000 |
|
|
|
3,843,000 |
|
|
|
50,482,000 |
|
|
|
16,972,000 |
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
Selling, general and administrative |
|
4,935,000 |
|
|
|
3,240,000 |
|
|
|
18,171,000 |
|
|
|
13,348,000 |
|
Depreciation and amortization |
|
183,000 |
|
|
|
192,000 |
|
|
|
729,000 |
|
|
|
602,000 |
|
Total operating expenses |
|
5,118,000 |
|
|
|
3,432,000 |
|
|
|
18,900,000 |
|
|
|
13,950,000 |
|
|
|
|
|
|
|
|
|
Income from operations |
|
9,061,000 |
|
|
|
411,000 |
|
|
|
31,582,000 |
|
|
|
3,022,000 |
|
|
|
|
|
|
|
|
|
Other income (expenses): |
|
|
|
|
|
|
|
Equity in income of unconsolidated affiliate |
|
254,000 |
|
|
|
(12,000 |
) |
|
|
710,000 |
|
|
|
359,000 |
|
Gain (loss) from marketable securities |
|
(20,000 |
) |
|
|
8,000 |
|
|
|
(62,000 |
) |
|
|
231,000 |
|
Interest income, net |
|
1,000 |
|
|
|
16,000 |
|
|
|
18,000 |
|
|
|
68,000 |
|
Total other income, net |
|
235,000 |
|
|
|
12,000 |
|
|
|
666,000 |
|
|
|
658,000 |
|
Income before provision |
|
|
|
|
|
|
|
for income taxes |
|
9,296,000 |
|
|
|
423,000 |
|
|
|
32,248,000 |
|
|
|
3,680,000 |
|
|
|
|
|
|
|
|
|
Provision for income
taxes |
|
1,878,000 |
|
|
|
88,000 |
|
|
|
5,162,000 |
|
|
|
680,000 |
|
|
|
|
|
|
|
|
|
Net income |
$ |
7,418,000 |
|
|
$ |
335,000 |
|
|
$ |
27,086,000 |
|
|
$ |
3,000,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per common
share |
$ |
0.55 |
|
|
$ |
0.03 |
|
|
$ |
2.01 |
|
|
$ |
0.23 |
|
|
|
|
|
|
|
|
|
Diluted earnings per common
share |
$ |
0.53 |
|
|
$ |
0.03 |
|
|
$ |
1.94 |
|
|
$ |
0.23 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic weighted average common
shares outstanding |
|
13,505,909 |
|
|
|
12,944,867 |
|
|
|
13,449,987 |
|
|
|
13,142,872 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted weighted average
common shares outstanding |
|
13,947,738 |
|
|
|
12,985,847 |
|
|
|
13,972,145 |
|
|
|
13,168,725 |
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Company
Contact: |
Investor Relations Contact: |
Alpha Pro Tech, Ltd. |
HIR Holdings |
Donna Millar |
Cameron Donahue |
905-479-0654 |
651-707-3532 |
e-mail: ir@alphaprotech.com |
e-mail: cameron@hirholdings.com |
Alpha Pro Tech (AMEX:APT)
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Von Mär 2024 bis Apr 2024
Alpha Pro Tech (AMEX:APT)
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Von Apr 2023 bis Apr 2024