-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, U/5xHDqrtyQsDIPuUHpCXFErPGUsomqfixjscqswRQc5z6LkQhwT9zODMC0nfecI xHWHDh8wJGh6bIVwo6L9Eg== 0001104659-10-043499.txt : 20100810 0001104659-10-043499.hdr.sgml : 20100810 20100810160730 ACCESSION NUMBER: 0001104659-10-043499 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20100810 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20100810 DATE AS OF CHANGE: 20100810 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ALPHA PRO TECH LTD CENTRAL INDEX KEY: 0000884269 STANDARD INDUSTRIAL CLASSIFICATION: ORTHOPEDIC, PROSTHETIC & SURGICAL APPLIANCES & SUPPLIES [3842] IRS NUMBER: 631030494 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-15725 FILM NUMBER: 101005152 BUSINESS ADDRESS: STREET 1: 60 CENTURIAN DR STREET 2: SUITE 112 CITY: MARKHAM ONTARIO CANA STATE: A6 BUSINESS PHONE: 9054790654 MAIL ADDRESS: STREET 1: 60 CENTURION DR STREET 2: STE 112 CITY: MARKHAM ON STATE: A6 FORMER COMPANY: FORMER CONFORMED NAME: BFD INDUSTRIES INC DATE OF NAME CHANGE: 19930328 8-K 1 a10-15592_18k.htm 8-K

 

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

 

Date of report (Date of earliest event reported):  August 10, 2010

 

ALPHA PRO TECH, LTD.

(Exact Name of Registrant as Specified in Charter)

 

Delaware

 

01-15725

 

63-1009183

(State or Other Jurisdiction of
Incorporation)

 

(Commission File Number)

 

(IRS Employer Identification No.)

 

60 Centurian Drive, Suite 112
Markham, Ontario

 

L3R 9R2

(Address of Principal Executive
Offices)

 

(Zip Code)

 

Registrant’s telephone number, including area code: 905-479-0654

 

N/A

(Former Name or Former Address, if Changed Since Last Report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

o            Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

o            Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

o            Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

o            Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 



 

Item 2.02.              Results of Operations and Financial Condition.

 

On August 10, 2010, Alpha Pro Tech, Ltd. issued a press release announcing its financial results for the second quarter ended June 30, 2010.

 

The press release is attached as Exhibit 99.1 to this Form 8-K and is furnished to, but not filed with, the Commission.

 

Item 9.01               Financial Statements and Exhibits.

 

(d)  Exhibits

 

Exhibit No.

 

Exhibit

 

 

 

99.1

 

Press release dated August 10, 2010, announcing financial results for the second quarter ended June 30, 2010.

 

2



 

Signatures

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

 

ALPHA PRO TECH, LTD.

 

 

 

Date: August 10, 2010

 

By:

/s/ Lloyd Hoffman

 

 

 

Lloyd Hoffman

 

 

 

Chief Financial Officer

 

3


EX-99.1 2 a10-15592_1ex99d1.htm EX-99.1

Exhibit 99.1

 

Alpha Pro Tech

 

LTD.

ALPHA PRO TECH, LTD. ANNOUNCES FINANCIAL RESULTS FOR THE SECOND QUARTER
AND SIX MONTHS ENDED JUNE 30, 2010

 

Second Quarter 2010 Building Supply Segment Sales Increased 29.4% from the same period of 2009

 

FOR IMMEDIATE RELEASE

 

Company Contact:

 

Investor Relations Contact:

Alpha Pro Tech, Ltd.

 

Hayden IR

Al Millar/Donna Millar

 

Cameron Donahue

905-479-0654

 

651-653-1854

e-mail: ir@alphaprotech.com

 

e-mail: cameron@haydenir.com

 

·                  Second quarter 2010 consolidated revenue decreased 22.9%, to $11.2 million, from $14.5 million in the second quarter of 2009, primarily due to a decrease in demand for N-95 respirator masks relating to the H1N1 Influenza A pandemic in 2009.

·                  Building Supply segment sales for the second quarter of 2010 increased 29.4%, to $4.9 million, from $3.8 million in the same quarter of 2009.  The Company added to Building Supply segment sales staff in anticipation of significant growth opportunities.

·                  Inventory increased by $4.8 million, or 36.4%, to $17.9 million as of June 30, 2010, from $13.1 million as of December 31, 2009.  The increase was primarily due to an increase in inventory for the Disposable Protective Apparel segment to strengthen our position in the marketplace, an increase in inventory in the Infection Control segment due to a stockpiling of N-95 particulate respirator masks and an increase in inventory in the Building Supply segment due to increased sales.

·                  The Company continues to broaden and diversify the distribution network for its Disposable Protective Apparel segment as it shifts its Critical Cover® product line from its previous exclusive distributor relationship.

·                  The Company currently plans to launch a new breathable housewrap in the third quarter of 2010.

 

Nogales, Arizona — August 10, 2010, Alpha Pro Tech, Ltd. (NYSE Amex: APT), a leading manufacturer of products designed to protect people, products and environments, including disposable protective apparel, infection control and building supply products, today announced financial results for the three and six months ended June 30, 2010.

 

Consolidated sales for the second quarter of 2010 decreased by $3.3 million, or 22.9%, to $11.2 million, from $14.5 million in the second quarter of 2009.  Sales for the Disposable Protective Apparel segment for the three months ended June 30, 2010 decreased by $1.2 million, or 20.3%, to $4.8 million, compared to $6.1 million for the same period of 2009.  Building Supply segment sales for the three months ended June 30, 2010 increased by $1.1 million, or 29.4%, to $4.9 million, compared to $3.8 million for the same period of

 



 

2009.  Building Supply segment sales were the second highest on record exceeded only by sales in the third quarter of 2009.  The increase in Building Supply segment sales was primarily due to a 24.0% increase in sales of REX™ SynFelt synthetic roof underlayment and a 45.9% increase in sales of REX™ Wrap housewrap, as compared to the second quarter of 2009.  The sales mix of the Building Supply segment for the three months ended June 30, 2010 was 68% for synthetic roof underlayment and 32% for housewrap.  This compared to 71% for synthetic roof underlayment and 29% for housewrap for the second quarter of 2009.  Infection Control segment sales for the three months ended June 30, 2010 decreased by $3.2 million, or 67.9%, to $1.5 million, compared to $4.7 million for the same period of 2009.  Mask sales were down by 69.5%, to $1.1 million, and shield sales were down by 72.6%, to $0.3 million.

 

Al Millar, President of Alpha Pro Tech, commented, “The decrease in sales in the Disposable Protective Apparel segment was partially due to a decline in sales of disposable shoecovers to our former largest distributor.  We have and continue to expect to sell our apparel line to this distributor, excluding shoe and bootcovers.  This decrease was partially offset by increased sales to a broad base of our distribution network and, in particular, to a major national distributor.  Sales to this national distributor increased over two and a half times in the second quarter of 2010, as compared to the same period of 2009.”

 

Mr. Millar continued, “During the second quarter, we increased our Building Supply segment sales team in anticipation of significant growth in the coming periods.  Discussions with potential and existing distributors have been very encouraging.  In addition to growth opportunities with existing products, we are also excited about the launch of a breathable housewrap in the third quarter of 2010 that should increase our potential market share.  We are very optimistic about the future of this segment.”

 

Mr. Millar concluded, “The decrease in mask sales was primarily attributable to a decrease in demand for our N-95 respirator mask sales relating to the global H1N1 Influenza A pandemic in 2009.  Shield sales were down in the second quarter of 2010, primarily due to the final shipments of a $1.7 million non-recurring shield order received in the fourth quarter of 2008.  That order was shipped out over a period of three quarters and commenced shipping in the fourth quarter of 2008.  General shield sales also decreased in the second quarter of 2010, partially related to the H1N1 Influenza A pandemic of 2009.”

 

Consolidated sales for the six months ended June 30, 2010 decreased by $1.0 million, or 4.3%, to $22.9 million, from $23.9 million for the six months ended June 30, 2009.  This decrease resulted from decreased sales of Infection Control and Disposable Protective Apparel products, offset by increased sales of Building Supply products.  Sales for the Disposable Protective Apparel segment for the six months ended June 30, 2010 decreased by $1.0 million, or 9.0%, to $9.9 million, compared to $10.9 million for the same period of 2009. The decrease was primarily due to decreased sales of disposable shoecovers to the Company’s former largest distributor, partially offset by increased sales of our Disposable Protective Apparel products to a broader based distribution network and, in particular, to the major national distributor mentioned above.  Building Supply segment sales for the six months ended June 30, 2010 increased by $3.6 million, or 59.4%, to $9.6 million, compared to $6.0 million for the same period of 2009.  The segment increase was primarily due to a 62.8% increase in sales of REX™ SynFelt synthetic roof underlayment and a 58.1% increase in sales of REX™ Wrap housewrap, compared to the same period of 2009.  The sales mix of the Building Supply segment for the six months ended June 30, 2010 was 69% for synthetic roof underlayment and 31% for housewrap.  This compared to 68% for synthetic roof underlayment and 32% for housewrap for the six months ended June 30, 2009.  Infection Control segment sales for the six months ended June 30, 2010 decreased by $3.6 million, or 52.0%, to $3.3 million, compared to $6.9 million for the same period of 2009.  Mask sales were down by $2.3 million, or 48.7%, to $2.4 million, primarily due to the surge in N-95 respirator mask sales in 2009 in relation to the H1N1 Influenza A pandemic.  Shield sales were down by $1.4 million, or 67.0%, to $0.7 million, due to the $1.7 million non-recurring order mentioned above.

 



 

Gross profit for the three months ended June 30, 2010 decreased by 38.6%, to $4.2 million, for the second quarter of 2010, or a 37.6% gross profit margin, from $6.9 million, or a 47.2% gross profit margin, for the same period of 2009.  Gross profit for the six months ended June 30, 2010 decreased 16.2%, to $9.2 million, or a 40.3% gross profit margin, from $11.0 million, or a 46.0% gross profit margin, for the same period in 2009.

 

Gross profit margin for the three months ended June 30, 2010 was negatively affected by the change in product mix in which Building Supply segment sales, which have lower margins, increased as a percentage of total sales, and Infection Control segment sales, which have higher margins, decreased as a percentage of total sales.  Gross margin in the Disposable Protective Apparel segment was down for the 2010 second quarter, compared to the same quarter of 2009; as part of the Company’s strategy to increase inventory levels to strengthen our position in the marketplace, we acquired some inventory primarily from alternative suppliers at a higher cost in the second quarter of 2010.  We do not expect to incur these higher costs on a going forward basis.  Gross profit margin for this segment is expected to be softer in 2010, as compared to 2009, but should increase from the second quarter levels.

 

Selling, general and administrative expenses increased by 3.5% to $3.5 million for the second quarter 2010, from $3.4 million for the same quarter last year.  As a percentage of net sales, selling, general and administrative expenses increased to 31.4% for the three months ended June 30, 2010, from 23.4% for the same period in 2009.

 

Selling, general and administrative expenses for the six months ended June 30, 2010 increased by 10.0% to $7.3 million, from $6.6 million for the same period last year.  The increase was primarily due to increased employee compensation, sales and marketing expenses, professional fees, public company expenses and general administrative and factory expenses, offset by a severance agreement with a former executive, which was expensed in the first quarter of 2009, and decreased executive bonuses.  As a percentage of net sales, selling, general and administrative expenses increased to 32.0% for the six months ended June 30, 2010, from 27.8% for the same period in 2009.

 

Net income decreased 82.8% for the three months ended June 30, 2010 to $0.4 million, compared to net income of $2.2 million for the three months ended June 30, 2009.  Net income as a percentage of sales for the three months ended June 30, 2010 and 2009 was 3.3% and 14.9%, respectively.  Basic and diluted income per share for the three months ended June 30, 2010 and 2009 was $0.02 and $0.10, respectively.

 

Net income decreased 60.6% for the six months ended June 30, 2010 to $1.1 million, compared to net income of $2.7 million for the six months ended June 30, 2009.  Net income as a percentage of sales for the six months ended June 30, 2010 and 2009 was 4.6% and 11.2%, respectively.  Basic and diluted income per share for the six months ended June 30, 2010 and 2009 was $0.05 and $0.12, respectively.

 

The Consolidated Balance Sheet remained strong with a current ratio of 26 to 1 as of June 30, 2010.  The Company completed the quarter with cash and cash equivalents of $3.0 million, down from $9.8 million as of December 31, 2009, and working capital of $30.0 million, up from working capital of $29.0 million at December 31, 2009.  The decrease in cash and cash equivalents during the first six months of 2010 was primarily due to cash used in operating activities of $6.4 million and cash used in investing activities of $0.4 million.  Inventory increased by $4.8 million, or 36.4%, to $17.9 million as of June 30, 2010, from $13.1 million as of December 31, 2009.

 

Lloyd Hoffman, Chief Financial Officer, commented, “Inventory increased for the Disposable Protective Apparel segment due to our strategy of having a strong inventory position to strengthen our position in the marketplace.  Inventory for the Infection Control segment increased due to a stockpiling of N-95 particulate

 



 

respirator masks but is down from the first quarter of 2010.  In addition, inventory for the Building Supply segment increased as a result of our increased sales.”

 

Mr. Hoffman concluded, “The decrease in cash for the six months ended June 30, 2010 was primarily due to an increase in our inventory levels by $4.8 million and our pay down of accrued liabilities of approximately $2.2 million in the first quarter of 2010.  Management expects the cash position to improve over the coming periods, as we anticipate a decrease in our overall inventory levels, and the impact on cash in the first quarter of 2010 resulting from the annual payment of 2009 accrued liabilities will not occur in the latter half of 2010.”

 

The Company currently has no outstanding debt and maintains an unused $3.5 million credit facility.

 

About Alpha Pro Tech, Ltd.

 

Alpha Pro Tech, Ltd. is the parent company of Alpha Pro Tech, Inc. and Alpha ProTech Engineered Products, Inc. Alpha Pro Tech, Inc. develops, manufactures and markets innovative disposable and limited-use protective apparel products for the industrial, clean room, medical and dental markets. Alpha ProTech Engineered Products, Inc. manufactures and markets a line of construction weatherization products, including building wrap and roof underlayment.  The Company has manufacturing facilities in Salt Lake City, Utah; Nogales, Arizona; Janesville, Wisconsin; Valdosta, Georgia; and a joint venture in India. For more information and copies of all news releases and financials, visit Alpha Pro Tech’s Website at http://www.alphaprotech.com.

 

Certain statements made in this press release constitute “forward-looking statements” within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include any statement that may predict, forecast, indicate or imply future results, performance or achievements instead of historical facts and may be identified generally by the use of forward-looking terminology and words such as “expects,” “anticipates,” “estimates,” “believes,” “predicts,” “intends,” “plans,” “potential,” “may,” “continue,” “should,” “will” and words of similar meaning. Without limiting the generality of the preceding statement, all statements in this press release relating to estimated and projected earnings, margins, costs, expenditures, cash flows, sources of capital, growth rates and future financial and operating results are forward-looking statements. We caution investors that any such forward-looking statements are only estimates based on current information and involve risks and uncertainties that may cause actual results to differ materially from the results contained in the forward-looking statements. We cannot give assurances that any such statements will prove to be correct. Factors that could cause actual results to differ materially from those estimated by us include the risks, uncertainties and assumptions described from time to time in our public releases and reports filed with the Securities and Exchange Commission, including, but not limited to, our most recent Annual Report on Form 10-K. We also caution investors that the forward-looking information described herein represents our outlook only as of this date, and we undertake no obligation to update or revise any forward-looking statements to reflect events or developments after the date of this press release. Given these uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results.

 

-tables follow-

 



 

Consolidated Balance Sheets (Unaudited)

 

 

 

June 30,
2010

 

December 31,
2009 (1)

 

 

 

 

 

 

 

Assets

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

 

$

2,967,000

 

$

9,753,000

 

Accounts receivable, net of allowance for doubtful accounts of $92,000 at June 30, 2010 and $65,000 at December 31, 2009

 

6,450,000

 

8,593,000

 

Inventories

 

17,862,000

 

13,094,000

 

Prepaid expenses and other current assets

 

3,460,000

 

2,792,000

 

Deferred income taxes

 

457,000

 

457,000

 

Total current assets

 

31,196,000

 

34,689,000

 

 

 

 

 

 

 

Property and equipment, net

 

3,896,000

 

3,843,000

 

Goodwill

 

55,000

 

55,000

 

Intangible assets, net

 

171,000

 

184,000

 

Equity investments in and advances to unconsolidated affiliates

 

1,796,000

 

1,701,000

 

Total assets

 

$

37,114,000

 

$

40,472,000

 

 

 

 

 

 

 

Liabilities and Shareholders’ Equity

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Accounts payable

 

$

448,000

 

$

2,963,000

 

Accrued liabilities

 

757,000

 

2,732,000

 

Total current liabilities

 

1,205,000

 

5,695,000

 

 

 

 

 

 

 

Deferred income taxes

 

906,000

 

906,000

 

Total liabilities

 

2,111,000

 

6,601,000

 

 

 

 

 

 

 

Shareholders’ equity:

 

 

 

 

 

Common stock, $0.01 par value, 50,000,000 shares authorized, 22,424,285 and 22,419,285 issued and outstanding at June 30, 2010 and December 31, 2009, respectively

 

224,000

 

224,000

 

Additional paid-in capital

 

23,238,000

 

23,164,000

 

Retained earnings

 

11,541,000

 

10,483,000

 

Total shareholders’ equity

 

35,003,000

 

33,871,000

 

Total liabilities and shareholders’ equity

 

$

37,114,000

 

$

40,472,000

 

 


(1)           The consolidated balance sheet as of December 31, 2009 has been prepared using information from the audited financial statements at that date.

 



 

Consolidated Income Statements (Unaudited)

 

 

 

For the Three Months Ended
June 30,

 

For the Six Months Ended
June 30,

 

 

 

2010

 

2009

 

2010

 

2009

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

$

11,221,000

 

$

14,547,000

 

$

22,850,000

 

$

23,874,000

 

 

 

 

 

 

 

 

 

 

 

Cost of goods sold, excluding depreciation and amortization

 

7,000,000

 

7,676,000

 

13,640,000

 

12,884,000

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

4,221,000

 

6,871,000

 

9,210,000

 

10,990,000

 

 

 

 

 

 

 

 

 

 

 

Expenses:

 

 

 

 

 

 

 

 

 

Selling, general and administrative

 

3,518,000

 

3,399,000

 

7,302,000

 

6,639,000

 

Depreciation and amortization

 

218,000

 

162,000

 

426,000

 

322,000

 

 

 

 

 

 

 

 

 

 

 

Income from operations

 

485,000

 

3,310,000

 

1,482,000

 

4,029,000

 

 

 

 

 

 

 

 

 

 

 

Other income:

 

 

 

 

 

 

 

 

 

Equity in income of unconsolidated affiliates

 

99,000

 

72,000

 

172,000

 

170,000

 

Interest, net

 

5,000

 

 

15,000

 

1,000

 

 

 

 

 

 

 

 

 

 

 

Income before provision for income taxes

 

589,000

 

3,382,000

 

1,669,000

 

4,200,000

 

 

 

 

 

 

 

 

 

 

 

Provision for income taxes

 

217,000

 

1,214,000

 

611,000

 

1,517,000

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

372,000

 

$

2,168,000

 

$

1,058,000

 

$

2,683,000

 

 

 

 

 

 

 

 

 

 

 

Basic net income per share

 

$

0.02

 

$

0.10

 

$

0.05

 

$

0.12

 

 

 

 

 

 

 

 

 

 

 

Diluted net income per share

 

$

0.02

 

$

0.10

 

$

0.05

 

$

0.12

 

 

 

 

 

 

 

 

 

 

 

Basic weighted average shares outstanding

 

22,424,285

 

22,795,003

 

22,423,788

 

23,245,300

 

 

 

 

 

 

 

 

 

 

 

Diluted weighted average shares outstanding

 

22,869,037

 

22,820,145

 

23,019,380

 

23,245,300

 

 


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