Alpha Pro Tech: Alpha Pro Tech, Ltd. Announces First Quarter 2024 Financial Results

Alpha Pro Tech Total Sales Decreased by 2.3% to $13.5 Million Compared to the Prior Year Period Housewrap and Accessory Product Sales Increase by 24.3% Net sales for the first quarter of 2024 were $13.5 million, down 2.3%, compared to $13.8 million for the first quarter of 2023. Building Supply segment sales decreased by $391,000, or 4.5%, to $8.2 million, compared to $8.6 million for the three months ended March 31, 2023. Disposable Protective Apparel segment sales increased by $73,000, or 1.4%, to $5.24 million, compared to $5.17 million for the same period of 2023. Net income for the first quarter of 2024 was $576,000, or $0.05 per diluted share compared to net income of $552,000, or $0.05 per diluted share for the same period of 2023. Cash of $18.5 million and working capital of $50.3 million, with no debt, as of March 31, 2024. NOGALES, Ariz., May 08, 2024 (GLOBE NEWSWIRE) -- 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 ended March 31, 2024. Lloyd Hoffman, President and Chief Executive Officer of Alpha Pro Tech, commented, "The Building Supply segment continues to show strength, as it achieved 7.6% growth on its core building products (excluding other woven materials) in the first quarter of 2024, as compared to the same period of 2023. This was accomplished even though there continues to be economic uncertainty in the housing market due to inflation, high interest rates and historical volatility during election years. Our housewrap and accessories sales continue to significantly outperform the market, with 24.3% growth in the first quarter of 2024, as compared to the same period of 2023. We continue to make inroads into the multi-family and commercial construction section, with our premium housewrap line (REX Wrap Fortis), which was up 13.7% in the first quarter of 2024. We also experienced a 53.3% increase in sales of housewrap accessories in the first quarter. Management expects that we will continue to see positive trends relative to the industry for both our entry level and premium housewrap and housewrap accessories product lines. The synthetic roof underlayment market has also been affected by the uncertain economic conditions, more offshore competition and a push in the market to reduce product selling prices. Despite these pressures, our synthetic roof underlayment sales performed reasonably well, despite being down 5.4% in the first quarter of 2024 compared to the same period of 2023. We launched our new line of self-adhered roofing products in late 2023 and have already achieved revenue in the first quarter of 2024 and we expect continued revenue growth from this new product line within our current customer base and anticipate expansion into new markets and business segments. Self-adhered roof underlayment has proven to be a good addition to our roof category. Market acceptance has been well received, as evidenced by our sales outpacing expectations. As we progress through the year, we expect these products will lead to additional conversions of our full line of mechanically fastened products. We are currently exploring additional products such as roof deck flashing. As building codes evolve, we see this as an opportunity to capture additional business, specifically in coastal and high wind markets. Other woven material sales decreased by 71.4% in the first quarter of 2024 compared to the same period of 2023 due to one of our customers being acquired and to a decrease in sales to our major customer, which we believe is an order timing issue. The Company is pursuing new opportunities for other woven material sales that may improve sales, but management does not expect other woven material sales to be a growth driver in 2024. Management expects growth in the building supply segment in the coming year, especially in housewrap sales. While housing starts are weak nationally, we have continued to grow market share. We also hope to build on our success within the multi-family and commercial segment and the single-family segment. However, there continues to be uncertainty in housing starts and the economy in general that could affect this segment. Sales of disposable protective garments in the first quarter in 2024 were up by 0.5% because of increased sales to regional and national distributors, partially offset by decreased sales to our major international supply chain partner. However, this partner's sales to its end users in the first quarter of 2024, calculated using our cost to them, were up approximately 24% compared to our sales to that partner, demonstrating demand for our products. Orders from this major international supply chain partner have been much stronger than normal recently, which we expect will result in higher sales in the coming quarter to this supply chain partner, compared to the current quarter. We expect continued growth for disposable protective garments in 2024. Face mask and face shield sales are still suffering from the post COVID-19 residual excess inventories at the distributor level, but sales in the fourth quarter of 2023 and first quarter of 2024 showed improvement and approximately doubled as compared to the prior two quarters. The market continues to be saturated with products but we're cautiously optimistic that face mask and face shield sales will show growth in the coming year," concluded Mr. Hoffman. Net sales Consolidated sales for the three months ended March 31, 2024, decreased to $13.5 million, from $13.8 million for the three months ended March 31, 2023, representing a decrease of $318,000, or 2.3%. This decrease consisted of decreased sales in the Building Supply segment of $391,000, partially offset by increased sales in the Disposable Protective Apparel segment of $73,000. Building Supply Segment: Building Supply segment sales for the three months ended March 31, 2024, decreased by $391,000, or 4.5%, to $8.2 million, compared to $8.6 million for the three months ended March 31, 2023. The Building Supply segment decrease during the three months ended March 31, 2024, was primarily due to a 5.4% decrease in sales of synthetic roof underlayment and a 71.4% decrease in sales of other woven material, partially offset by a 24.3% increase in sales of housewrap compared to the same period of 2023. Our core Building Supply products, which include housewrap, and synthetic roof underlayment, was up 7.6% in the first quarter of 2024 as compared to the same period of 2023. The sales mix of the Building Supply segment for the three months ended March 31, 2024, was approximately 40% for synthetic roof underlayment, 56% for housewrap and 4% for other woven material. This compared to approximately 41% for synthetic roof underlayment, 45% for housewrap and 14% for other woven material for the three months ended March 31, 2023. Disposable Protective Apparel Segment: Sales for the Disposable Protective Apparel segment for the three months ended March 31, 2024, increased by $73,000, or 1.4%, to $5.2 million, compared to $5.2 million for the same period of 2023. This segment increase was due to a 0.5% increase in sales of disposable protective garments, a 6.3% increase in sales of face masks and a 7.6% increase in sales of face shields. The sales mix of the Disposable Protective Apparel segment for the three months ended March 31, 2024, was approximately 84% for disposable protective garments, 11% for face masks and 5% for face shields. This sales mix is compared to approximately 85% for disposable protective garments, 11% for face masks and 4% for face shields for the three months ended March 31, 2023. Gross profit Gross Profit. Gross profit increased by $435,000, or 8.7%, to $5.4 million for the three months ended March 31, 2024, from $5.0 million for the three months ended March 31, 2023. The gross profit margin was 40.2% for the three months ended March 31, 2024, compared to 36.1% for the three months ended March 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. Management expects the gross profit margin could be negatively affected by the ongoing wars in Ukraine and the Middle East, which have resulted in increased freight rates. Selling, General and Administrative Expenses Selling, general and administrative expenses increased by $534,000, or 12.4%, to $4.8 million for the three months ended March 31, 2024, from $4.3 million for the three months ended March 31, 2023. As a percentage of net sales, selling, general and administrative expenses increased to 36.0% for the three months ended March 31, 2024, from 31.3% for 2023. The change in expenses by segment for the three months ended March 31, 2024, was as follows: Disposable Protective Apparel was up by $108,000, or 8.6%; Building Supply was up by $100,000, or 5.3%; and corporate unallocated expenses were up by $326,000, or 27.8%. The increase in the Disposable Protective Apparel segment expenses was primarily related to increased employee compensation, tradeshow expenses and rent expenses, partially offset by decreased travel expenses and insurance expenses. The increase in the Building Supply segment expenses was related to increased employee compensation, sales commission and general factory expenses, partially offset by a decrease in travel expenses. The increase in corporate unallocated expenses was primarily due to increased employee compensation, stock option and restricted stock expenses, professional fees, insurance expenses and general office expenses. Income from Operations Income from operations decreased by $100,000, or 23.5%, to $326,000 for the three months ended March 31, 2024, compared to $426,000 for the three months ended March 31, 2023. The decreased income from operations was primari