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Letter To Shareholders 

To Our Shareholders

It was a challenging year for Alpha Pro Tech in 2015, as both revenue and profitability declined year over year. Consolidated sales for 2015 were $45.0 million, down $2.7 million, with the Building Supply segment down $1.7 million, the Infection Control segment down $1.0 million, and the Disposable Protective Apparel segment remaining flat. The decline in Building Supply segment sales was due to competition in the building market, which led to an influx of lower quality and lower cost imports that put pressure on our pricing. The trend we are now seeing in the market is that customers are recognizing the value proposition of our quality product and the benefit of dealing with a vertically integrated supplier. Customers value our reputation, service, quality in manufacturing and brand recognition.

The decrease in Infection Control segment sales was the result of the Ebola outbreak in the fourth quarter of 2014, which was not repeated in 2015. Despite this, we remained profitable, drove growth in our new Building Supply segment products and strengthened our distribution network in our Disposable Protective Apparel segment, which has positioned the Company for growth in 2016.

Our goal for 2016 is to achieve both top and bottom line growth, as we are optimistic that results can be achieved across all segments. We will continue to innovate, launch new products and further build our brands in our business segments, as well as continue to strengthen our distribution networks. Our proven track record should give shareholders comfort that we will prevail during challenging periods and that both profitability and growth remain our primary objectives going forward.

We continue to have a strong balance sheet, which provides us with the flexibility to invest in opportunities while remaining financially stable. As of December 31, 2015, cash increased by 76% to $9.7 million. Cash generated from operating activities in 2015 was $6.0 million, and we continue to have no debt. That being said, management continues to believe that our share repurchase program is an effective use of our strong balance sheet and cash position. In 2015, we purchased 973,100 shares and have purchased 12.5 million shares since the inception of the repurchase program. All stock is retired upon purchase, and we plan on continuing to remain active in the repurchase market during 2016.

We are also excited to highlight a recent realignment of our management team. Lloyd Hoffman has been promoted to the role of Chief Executive Officer and a position on the Board of Directors. Al Millar has been promoted to the role of Chairman of the Board and will continue to serve as President. Lastly, Colleen McDonald has been promoted to the role of Chief Financial Officer. We think this new structure will drive further success and operational efficiencies in the years to come.

We are committed to delivering significantly improved financial results and shareholder value. We look forward to keeping you informed on our progress and continuing to build an Alpha Pro Tech that creates value for you while protecting people, products and environments. As always, we thank you for your continued support.



 Alexander W. Millar
 Chairman & President


 Lloyd Hoffman
 Chief Executive Officer