Alpha Pro Tech: Alpha Pro Tech, Ltd. Announces Fourth Quarter and Full Year 2023 Financial Results

Net sales for the fourth quarter of 2023 was $15.3 million, up by 24.9% compared to $12.2 million for the fourth quarter of 2022 Building Supply segment sales increased by $3.5 million, or 55.7%, to $9.8 million, compared to $6.3 million for the three months ended December 31, 2022 Disposable Protective Apparel segment sales decreased by 7.7%, to $5.5 million, compared to $5.9 million for the same period of 2022 Net income for the fourth quarter of 2023 was $1.1 million, or $0.09 per diluted share, compared to $564,000, or $0.05 per diluted share, for the fourth quarter of 2022 Net income for the year ended December 31, 2023 was $4.2 million, or $0.35 per diluted share, compared to $3.3 million, or $0.26 per diluted share, for the year ended December 31, 2022 Cash of $20.4 million and working capital of $50.3 million with no debt, as of December 31, 2023 NOGALES, Ariz., March 13, 2024 (GLOBE NEWSWIRE) -- Alpha Pro Tech, Ltd. 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 year ended December 31, 2023. Lloyd Hoffman, President and Chief Executive Officer of Alpha Pro Tech, commented, "We have experienced the six highest quarters on record for the Building Supply segment over the past eight quarters: the second, third, and fourth quarters of 2023 and the first, second and third quarters of 2022. These achievements come despite the continued softness in the housewrap market, as housing starts in 2023 in the United States decreased by 8.8%, compared to the same period a year ago. Management is encouraged by the full year 22.2% increase in housewrap and accessories sales, as we continue to significantly outperform the market through diversification and product development. Sales of our REX Wrap® and REX Wrap Plus®, our entry-level housewrap products, were up by 15.1% over the prior year, despite the decrease in housing starts, as we continue to form relationships with new dealers. Management expects to see continued growth opportunities with REX Wrap Fortis, our premium housewrap line, as we continue to make inroads into the multi-family and commercial construction sector, evidenced by a 33.9% increase in sales for this product in 2023. We also experienced a 180% increase in sales of our housewrap accessories, REXTREME Window and Door Flashing and REX Premium Seam Tape, in 2023. 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 continued decrease in new home starts, economic uncertainty, more offshore competition and a push in the market to reduce product selling prices. Despite these pressures, our synthetic roof underlayment sales also outperformed the market despite being down 3.0% in 2023 compared to 2022. We launched our new line of self-adhered roofing products in late 2023, which management expects will result in revenue growth within our current customer base and allow for expansion into new markets and business segments. We continue to work closely with our customers to develop and expand our product lines. Other woven material sales increased by 18.0% in 2023 compared to the same period of 2022, due to increased sales to our major customer, but management does not expect this to be a growth driver in the coming year." Mr. Hoffman continued, "Sales of disposable protective garments in 2023 were up by 4.0% as our channel partners and end customers are continuing to work through their excess inventory, which had accumulated as a result of the pandemic. Our sales have been positively affected as we can now meet face-to-face with our distribution partners and end customers, something we have not been able to do since 2020. Disposable protective garment sales in 2023 were up by approximately 19% as compared to pre-pandemic levels. We expect continued growth for disposable protective garments in 2024. Face mask and face shield sales are still suffering from the COVID-19 residual excess inventories at the distributor level, but sales in the fourth quarter of 2023 showed improvement and approximately doubled as compared to the prior quarter. The market continues to be saturated with products, but management is cautiously optimistic that face mask and face shield sales will show growth in the coming year." 2023 Results Consolidated sales for the three months ended December 31, 2023 increased to $15.3 million, from $12.2 million for the three months ended December 31, 2022, representing an increase of $3.0 million, or 24.9%. This increase consisted of higher sales in the Building Supply segment of $3.5 million, partially offset by decreased sales in the Disposable Protective Apparel segment of $460,000. Building Supply segment sales for the three months ended December 31, 2023, increased by $3.5 million, or 55.7%, to $9.8 million, compared to $6.3 million for the three months ended December 31, 2022. The Building Supply segment increase during the three months ended December 31, 2023 was primarily due to a 61.9% increase in sales of housewrap, a 35.2% increase in sales of synthetic roof underlayment and a $661,000 increase in sales of other woven material compared to the same period of 2022. The sales mix of the Building Supply segment for the three months ended December 31, 2023 was approximately 42% for synthetic roof underlayment, 52% for housewrap and 6% for other woven material. This compared to approximately 49% for synthetic roof underlayment, 51% for housewrap and 0% for other woven material for the three months ended December 31, 2022. Disposable Protective Apparel segment sales for the three months ended December 31, 2023 decreased by $460,000, or 7.7%, to $5.5 million, compared to $5.9 million for the same period of 2022. This segment decrease was due to a 5.6% decrease in sales of disposable protective garments, a 11.0% decrease in sales of face masks and a 33.9% decrease in sales of face shields. The sales mix of the Disposable Protective Apparel segment for the three months ended December 31, 2023 was approximately 85% for disposable protective garments, 11% for face masks and 4% for face shields. This sales mix is compared to approximately 83% for disposable protective garments, 12% for face masks and 5% for face shields for the three months ended December 31, 2022. Consolidated sales for the year ended December 31, 2023, decreased to $61.2 million, from $62.0 for the year ended December 31, 2022, representing a decrease of $749,000, or 1.2%. This decrease consisted of decreased sales in the Disposable Protective Apparel segment of $4.2 million, partially offset by increased sales in the Building Supply segment of $3.5 million. Building Supply segment sales for the year ended December 31, 2023 increased by $3.5 million, or 9.4%, to a record sales year of $40.4 million, compared to $36.9 million for the year ended December 31, 2023. The Building Supply segment increase during the year ended December 31, 2023 was primarily due to a 22.2% increase in sales of housewrap and a 18.0% increase in sales of other woven material, partially offset by a 3.0% decrease in sales of synthetic roof underlayment and an increase in rebates compared to the same period of 2022. The sales mix of the Building Supply segment for the year ended December 31, 2023 was approximately 42% for synthetic roof underlayment, 47% for housewrap and 11% for other woven material. This compared to approximately 47% for synthetic roof underlayment, 43% for housewrap and 10% for other woven material for the year ended December 31, 2022. Disposable Protective Apparel segment sales for the year ended December 31, 2023 decreased by $4.2 million, or 16.8%, to $20.8 million, compared to $25.0 million for 2022. This segment decrease was due to a 4.0% increase in sales of disposable protective garments that was more than offset by a 62.3% decrease in sales of face masks and a 75.5% decrease in sales of face shields. The sales mix of the Disposable Protective Apparel segment for the year ended December 31, 2023 was approximately 88% for disposable protective garments, 9% for face masks and 3% for face shields. This sales mix is compared to approximately 71% for disposable protective garments, 19% for face masks and 10% for face shields for the year ended December 31, 2022. Gross Profit Gross profit decreased by $895,000, or 18.6%, to $5.7 million for the three months ended December 31, 2023, from $4.8 million for the three months ended December 31, 2022. The gross profit margin was 37.4% for the three months ended December 31, 2023, compared to 39.4% for the three months ended December 31, 2022. Gross profit increased by $1.1 million or 5.3%, to $22.8 million for the year ended December 31, 2023, from $21.7 million for the year ended December 31, 2022. The gross profit margin was 37.3% for the year ended December 31, 2023, compared to 35.0% for the year ended December 31, 2022. The gross profit margin in 2023 was positively affected by ocean freight rates that have come down since the latter part of 2022. Management expects the gross profit margin to be in a similar range in 2024, although gross 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 $619,000, or 16.0%, to $4.5 million for the three months ended December 31, 2023, from $3.9 million for the three months ended December 31, 2022. As a percentage of net sales, selling, general and administrative expenses decreased to 29.5% for the three months ended December 31, 2023, from 31.7% for the same period of 2022. The increase in selling, general