Alpha Pro Tech: Alpha Pro Tech : Announces Q4 and Year End Financial Results for Period Ended December 31, 2024

ALPHA PRO TECH, LTD. ANNOUNCES FOURTH QUARTER AND FULL YEAR 2024 FINANCIAL RESULTS FOR IMMEDIATE RELEASE 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 Net sales for the year ended December 31, 2024 were $57.8 million, down 5.5% compared to $61.2 million for the year ended December 31, 2023 Net income for the year ended December 31, 2024 was $3.9 million, or $0.35 per diluted share, compared to $4.2 million, or $0.35 per diluted share, for the year ended December 31, 2023 Cash of $18.6 million and working capital of $47.5 million with no debt, as of December 31, 2024 Nogales, Arizona - March 12, 2025 - 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 three month period and full year, ended December 31, 2024. Lloyd Hoffman, President and Chief Executive Officer of Alpha Pro Tech, commented, "The housing market continues to show weakness, with housing starts down 4.4% in 2024 compared to 2023. Although sales of the core building products (housewrap and synthetic roof underlayment), were down 7.9% in 2024, exceeding the decline in housing starts, we are optimistic about the future for the following reasons. Excluding the decline of sales by two private label distributors, the 2024 sales performance of our core building products would have resulted in a lower percentage decline then the reduction in housing starts, indicating that we otherwise outperformed the overall market. Housewrap sales were encouraging through the first nine months of 2024, especially since the percentage decline of housing starts was higher than the percentage decline of housewrap sales of 2.6%. Lower housewrap sales in the final quarter of 2024, were primarily due to one of our larger 1 distributors losing business from certain end users, but we have not lost share with this distributor. Presenting an additional challenge in 2024, multi-family housing starts in 2024 were down 11.3% compared to 2023 with 2024 being the lowest in ten years. Sales of synthetic roof underlayment, which were down double digits through the first nine months of 2024, ended the year down single digits. After hurricanes Helene and Milton, we saw a surge in synthetic roof underlayment orders in the fourth quarter of 2024 to assist in the southeast rebuild. Sales of this product line continue to be affected by uncertain economic conditions, more offshore competition and a push in the market to reduce product selling prices. We expect growth in 2025 in the synthetic roof underlayment category. Despite the challenges faced in 2024, our efforts are now focused on builders and contractors and we are educating the industry on our extensive manufacturing capabilities which are expected to contribute to future growth. Our top fifteen accounts have increased sales compared to 2023, excluding one of our top accounts mentioned above. This is a testament to the hard work and commitment of our sales team. Late in the year, we added two Territory Mangers that will assist in strengthening relationships with our customers and driving new business. Sales of other woven material decreased by $1.3 million, or 28.2% in 2024 compared to 2023, primarily due to one of our customers being acquired by another company. We are pursuing new opportunities for other woven material sales that could improve sales. We have recently created the position of Director of Product and Business Development. This role will be instrumental in helping us expand our product offerings and explore new opportunities and industries where we currently do not have a presence. Management expects growth in the Building Supply segment in the coming year, as the projected number of housing starts in 2025 is expected to increase. However, there continues to be uncertainty in housing starts and the economy in general that could affect this segment." Mr. Hoffman continued, "Sales of disposable protective garments in 2024 were up approximately 19% as compared to pre-pandemic levels, increasing due to further integration and growth among some of our largest regional channel partners. We have signed new distribution agreements with regional and national channel partners, which should provide for an enhanced level of engagement and mutual growth incentives. In addition, we signed a new agreement with our largest international channel partner and achieved elevated status and were named as a preferred supplier going forward. We believe this achievement will provide some growth opportunities, and management expects continued growth for disposable protective garments in 2025." 2024 Results Consolidated sales for the three months ended December 31, 2024 decreased to $13.8 million, from $15.3 million for the three months ended December 31, 2023, representing a decrease of $1.5 million, or 9.5%. Building Supply segment sales for the three months ended December 31, 2024, decreased by $800,000, or 8.1%, to $9.0 million, compared to $9.8 million for the three months ended December 2 31, 2023. This decrease during the three months ended December 31, 2024 was primarily due to a 16.9% decrease in sales of housewrap and a 17.6% decrease in sales of other woven material, partially offset by an increase in sales of synthetic roof underlayment of 5%, compared to the same period of 2023. Disposable Protective Apparel segment sales for the three months ended December 31, 2024 decreased by $700,000, or 11.9%, to $4.8 million, compared to $5.5 million for the same period of 2023. This decrease was due to a 13.9% decrease in sales of disposable protective garments and a 2.2% decrease in sales of face masks, slightly offset by a 1.4% increase in face shield sales. Consolidated sales for the year ended December 31, 2024 , decreased to $57.8 million, from $61.2 million for the year ended December 31, 2023, representing a decrease of $3.4 million, or 5.5%. Building Supply segment sales for the year ended December 31, 2024, decreased by $4.4 million, or 11.0%, to $36.0 million compared to $40.4 million for the year ended December 31, 2023. This decrease was primarily due to a 6.4% decrease in sales of housewrap, an 8.8% decrease in sales of synthetic roof underlayment and a 28.2% decrease in sales of other woven material, compared to the same period of 2023. Disposable Protective Apparel segment sales for the year ended December 31, 2024, increased by $1.0 million or 5.0%, to $21.9 million, compared to $20.8 million for 2023. This increase was due to a 0.8% increase in sales of disposable protective garments and a 43.5% increase in sales of face shields, partially offset by a 34.6% decrease in sales of face masks. Gross Profit Gross profit decreased by $516,000, or 9.0%, to $5.2 million for the three months ended December 31, 2024, from $5.7 million for the three months ended December 31, 2023. The gross profit margin was 37.6% for the three months ended December 31, 2024, compared to 37.4% for the three months ended December 31, 2023. Gross profit increased by $104,000, or 0.5%, to $22.9 million for the year ended December 31, 2024, from $22.8 million for the year ended December 31, 2023. The gross profit margin was 39.6% for the year ended December 31, 2024, compared to 37.3% for the year ended December 31, 2023. The gross profit margin in 2024 was positively affected by a margin increase in both the Disposable Protective Apparel and Building Supply segments. However, management expects that the gross profit margin could be negatively affected during 2025 by ocean freight rates that experienced significant volatility in 2024, due to factors such as geopolitical tensions, labor disputes and market dynamics. As we progress into next year, the outlook suggests continued volatility and unpredictability in freight rates. 3 Net Income Net income for the three months ended December 31, 2024 was $847,000, compared to net income of $1.1 million for the three months ended December 31, 2023, representing a decrease of $214,000, or 20.2%. Net income as a percentage of net sales for the three months ended December 31, 2024 was 6.1%, and net income as a percentage of net sales for the same period of 2023 was 7.0%. Basic and diluted earnings per common share for the three months ended December 31, 2024, and 2023 were $0.08 and $0.09, respectively. Net income for the year ended December 31, 2024, was $3.9 million compared to net income of $4.2 million for 2023, representing a decrease of $260,000, or 6.2%. The net income decrease between 2024 and 2023 was due to a decrease in income before provision for income taxes of $405,000, partially offset by a decrease in provision for income taxes of $145,000. Net income as a percentage of net sales was 6.8% for both years ended December 31, 2024 and 2023. Basic and diluted earnings per common share for the years ended December 31, 2024 and 2023, were $0.35. Balance Sheet As of December 31, 2024, the Company had cash of $18.6 million compared to $20.4 million as of December 31, 2023. Working capital totaled $47.5 million and the Company's current ratio was 16:1, compared to a current ratio of 21:1 as of December 31, 2023. Colleen McDonald, Chief Financial Officer, commented, "As of December 31, 2024, we had $2.7 million available for additional stock purchases under our stock repurchase program. During the year ended December 31, 2024, we repurchased 831,000 shares of common stock at a cost of $4.5 million. As of December 31, 2024, we had repurchased a total of 21.2 million shares of common stock at a cost of approximately $54.8 million through our repurchase program. We retire all stock upon repurchase and future repurchases are expected to be funded from cash on hand and cash flows from op