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NOGALES, ARIZONA - March 8, 2007 -- Alpha Pro Tech
(AMEX: APT; CHX:APT),a leading manufacturer of products designed to
protect people, products and environments, including disposable protective
apparel and building products, today announced its financial results for the
fourth quarter and full-year period ended December 31, 2006. The results are
in-line with the expectations announced February 15th.
Consolidated sales for the fourth quarter ended December 31, 2006 increased
50.1% to a record $10.5 million from $7.0 million in the comparable 2005
quarter. The increase was primarily due to a significant increase in disposable
protective apparel products, and an increase in engineered products
construction supply weatherization products, and infection control product
sales, partially offset by a decrease in extended care product sales. Sales for
the Disposable Protective Apparel segment for the quarter increased 73.8% to
$6.4 million compared to $3.7 million for the same period of 2005. We expect
continued growth in 2007 due to the market acceptance of our new ComforTech®
line of products and our efforts to expand the distribution network. Infection
Control segment sales for the quarter increased 25.8% to $2.0 million compared
to $1.6 million for the same period of 2005. Mask sales in this segment,
especially sales of the N-95 NIOSH approved respirator mask, continued the
trend of sales growth throughout 2006, as concerns about Avian Flu have not
abated. Engineered Products segment sales for the quarter increased 49.2% to
$1.8 million compared to $1.2 million for the same period of 2005.
Al Millar, President of Alpha Pro Tech commented, “In just two years, our
Engineered Products segment has grown from a true startup to a strong driver of
our consolidated top and bottom line results, contributing 20.8% of our net
sales. This segment posted 65.1% sales growth for the year, and we believe our
decision to move forward on a non-exclusive basis with our distributor will
enable us to maintain this growth rate as we add to our distribution channels.
Due to this change in distribution channel strategy, we anticipate that our
sales will likely be affected in the early part of 2007, but the full-year 2007
should have a rate of growth similar to that realized in 2006. The latest
product in this segment is the state-of-the-art REX SynFelt™ synthetic roof
underlayment, which will add depth to our current product offering representing
an attractive opportunity for our distributors. Our apparel segment recovered
from a slow first quarter of the year to report positive annual growth,
supported by the successful introduction of our ComforTech® line and the
pending launch of our ComforTech® Sterile™ product. Today, Alpha Pro Tech has
the most comprehensive and sophisticated line of products in its history, and
as we round out our distribution channels we are well positioned for continued
growth in 2007 and beyond. Our game plan is to show overall growth for the
Company of at least 20% in 2007.”
Gross profit increased by 59.2% to a record $5.0 million for the quarter, or
47.0% gross profit margin, from $3.1 million, or 44.3% gross profit margin, for
the same period in 2005. Gross profit margin on the Engineered Products segment
improved in each of the four quarters of 2006 and is expected to continue to
improve into 2007.
Selling, general and administrative expenses increased by 23.2% to $3.1 million
for the quarter from $2.5 million for the same quarter last year. Despite the
actual increase in operating expenses, operating expenses as a percentage of
revenue decreased to 29.3% from 35.7%, year-over-year.
Income from operations increased by 266.7%, to $1.8 million for the quarter as
compared to income from operations of $478,000 for the quarter ended December
31, 2005.
Net income for the quarter was $1.1 million compared to net income of $309,000
for the quarter ended December 31, 2005. Basic and diluted income per share for
the quarter was $0.04, based on 25.3 million fully diluted shares, compared to
basic and fully diluted earnings per share of $0.01, based on 25.5 million
fully diluted shares, for the fourth quarter last year.
Mr. Millar added, “For the year, strong sales across all of our core segments
resulted in a record year of revenue and profitability for Alpha Pro Tech. We
continue to carefully manage our pricing structure, which has allowed us to
maintain and slightly expand margins across our businesses, and manage
expenses, leading to a reduction of our selling, general and administrative
expenses as a percent of revenue.”
For the full-year period ended December 31, 2006, consolidated sales increased
20.1% to $37.3 million from $31.1 million for the year ended December 31, 2005
due to increased sales of engineered products construction supply
weatherization products, disposable protective apparel products and infection
control segment sales. The Engineered Products segment sales for the year
increased 65.1% to $7.8 million from $4.7 million in the 2005 period. Sales for
the Disposable Protective Apparel segment for the year were $21.2 million, an
increase of 8.9% from the $19.4 million for the prior year, helped by an
increase of sales in the second half of the year. Infection Control segment
sales for the year increased 35.2% to $6.9 million from $5.1 million in the
same period of 2005 due in large part to sales of our N-95 NIOSH approved
Respirator mask.
Gross profit increased 22.4% to $17.3 million, or 46.4% gross profit margin for
the 2006 year compared to gross profit of $14.1 million, or 45.5% gross profit
margin, for 2005. Selling, general and administrative expenses increased 11.7%
to $10.9 million, or 29.3% of sales, for the year from $9.8 million, or 31.5%
of sales, for the prior year. We believe that as our sales grow, our expenses
will continue to decrease as a percentage of sales.
Income from operations for 2006 increased 54.0% to $5.9 million from $3.9
million for the prior-year period. Net income for the year was $3.7 million, or
$0.15 per basic and fully diluted share (based on 25.1 million shares) compared
to net income of $2.4 million, or $0.10 per basic and fully diluted (based on
25.2 million shares) for the comparable prior-year period.
The balance sheet continued to remain strong with a current ratio of 8.3 to 1 on
December 31, 2006. The Company completed the quarter with cash and cash
equivalents of $1.8 million and working capital of $19.6 million. Additionally
at year end, the Company reported no outstanding debt, maintains an unused $3.5
million credit facility and shareholders’ equity improved to $23.5 million from
$18.6 million on December 31, 2005. Inventories on December 31, 2006 totaled
$12.7 million and were up $2.1 million or 19.8% compared to inventories as of
December 31, 2005. The increase is primarily attributable to an increase of
$2.2 million in inventory for the Engineered Product segment.
Lloyd Hoffman, Chief Financial Officer commented, “Although our Engineered
Products segment inventory of $6.8 million has increased in 2006, the number of
months of sales in inventory has decreased slightly from 2005. We expect
through sales growth that the number of months of sales in inventory in this
segment will be reduced during 2007.”
About Alpha Pro Tech, Ltd
Alpha Pro Tech, Ltd. is a leader in protecting environments. Alpha Pro Tech
develops, manufactures and markets innovative disposable and limited-use
protective apparel products for the industrial, clean room, medical and dental
markets. In addition, Alpha ProTech Engineered Products, Inc. manufactures and
markets a line of construction weatherization products, including building
wrap, roof underlayment and mold resistant framing sealant. The Company has
manufacturing facilities in Salt Lake City, Utah; Nogales, Arizona; Janesville,
Wisconsin; Valdosta, Georgia; and a joint venture in India.
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