Alpha Pro Tech, Ltd. (APT) Bundle
Understanding Alpha Pro Tech, Ltd. (APT) Revenue Streams
Understanding Alpha Pro Tech, Ltd.’s Revenue Streams
Alpha Pro Tech, Ltd. generates revenue through various segments, primarily focusing on Disposable Protective Apparel and Building Supply products. Below is a detailed examination of its revenue streams.
Breakdown of Primary Revenue Sources
- Disposable Protective Apparel: This segment includes sales of disposable garments, face masks, and face shields.
- Building Supply: Products in this segment comprise housewrap, synthetic roof underlayment, and other woven materials.
Year-over-Year Revenue Growth Rate
For the nine months ended September 30, 2024, consolidated sales decreased to $44,023,000 from $45,967,000 for the same period in 2023, marking a decrease of $1,944,000 or 4.2%.
Contribution of Different Business Segments to Overall Revenue
| Segment | 2024 Revenue ($) | 2023 Revenue ($) | Change ($) | Percentage Change (%) |
|---|---|---|---|---|
| Disposable Protective Apparel | 24,044,000 | 22,351,000 | +1,693,000 | +7.6% |
| Building Supply | 26,979,000 | 30,616,000 | -3,637,000 | -11.9% |
Analysis of Significant Changes in Revenue Streams
In the third quarter of 2024, sales for the Disposable Protective Apparel segment increased by 18.4% to $5,453,000, compared to $4,604,000 in the same quarter of 2023. This growth was driven by a 6.9% increase in sales of disposable protective garments, a 124.3% increase in face mask sales, and a 204.5% increase in face shield sales.
Conversely, the Building Supply segment experienced a decline of 23.2% in sales for the three months ended September 30, 2024, falling to $8,798,000 from $11,449,000 in 2023. This decline was attributed to decreases in sales across various products:
- Housewrap: -2.6%
- Synthetic roof underlayment: -13.2%
- Other woven material: -29.9%
Overall, while the Disposable Protective Apparel segment is showing promising growth, the Building Supply segment is facing significant challenges, impacting the company's total revenue performance.
A Deep Dive into Alpha Pro Tech, Ltd. (APT) Profitability
A Deep Dive into Alpha Pro Tech, Ltd. Profitability
Gross Profit Margin: For the three months ended September 30, 2024, the gross profit was $5,484,000 with a gross profit margin of 38.5%, compared to $6,035,000 and 37.6% for the same period in 2023. For the nine months ended September 30, 2024, gross profit increased to $17,743,000 with a margin of 40.3%, up from $17,123,000 and 37.3% for 2023.
Operating Profit Margin: The income from operations for the three months ended September 30, 2024, was $737,000, resulting in an operating profit margin of 5.2%, a decrease from 8.9% in 2023. For the nine months ended September 30, 2024, income from operations was $2,775,000, yielding a margin of 6.3%, down from 6.9% in 2023.
Net Profit Margin: Net income for the three months ended September 30, 2024, was $862,000, with a net profit margin of 6.0%, compared to $1,430,000 and 8.9% for the same period in 2023. For the nine months ended September 30, 2024, net income was $3,082,000, or 7.0%, slightly up from 6.8% in 2023.
Trends in Profitability Over Time
The following table summarizes profitability metrics for the three and nine months ended September 30 for 2024 and 2023:
| Metric | Three Months 2024 | Three Months 2023 | Nine Months 2024 | Nine Months 2023 |
|---|---|---|---|---|
| Net Sales | $14,251,000 | $16,053,000 | $44,023,000 | $45,967,000 |
| Gross Profit | $5,484,000 | $6,035,000 | $17,743,000 | $17,123,000 |
| Operating Income | $737,000 | $1,423,000 | $2,775,000 | $3,161,000 |
| Net Income | $862,000 | $1,430,000 | $3,082,000 | $3,128,000 |
Comparison of Profitability Ratios with Industry Averages
Industry averages for companies in the same sector typically show a gross profit margin of approximately 40%, an operating profit margin of 8%, and a net profit margin around 10%. The company’s gross profit margin of 40.3% for nine months ended September 30, 2024 aligns closely with industry standards; however, its operating and net profit margins are below average.
Analysis of Operational Efficiency
Operational efficiency can be assessed through the company's selling, general and administrative (SG&A) expenses, which for the three months ended September 30, 2024, were $4,502,000, representing 31.6% of net sales, an increase from 27.3% in 2023. For the nine months, SG&A expenses totaled $14,234,000, or 32.3% of net sales, up from 28.9% in 2023.
The increase in SG&A expenses is attributed to rising employee compensation and marketing expenses, which have impacted the overall profitability ratios negatively. The efficiency of operations is further reflected in the decrease in income from operations and the increase in total operating expenses.
The following table outlines key profitability ratios for the three and nine months ended September 30, 2024 and 2023:
| Profitability Ratio | Three Months 2024 | Three Months 2023 | Nine Months 2024 | Nine Months 2023 |
|---|---|---|---|---|
| Gross Margin | 38.5% | 37.6% | 40.3% | 37.3% |
| Operating Margin | 5.2% | 8.9% | 6.3% | 6.9% |
| Net Margin | 6.0% | 8.9% | 7.0% | 6.8% |
Debt vs. Equity: How Alpha Pro Tech, Ltd. (APT) Finances Its Growth
Debt vs. Equity: How Alpha Pro Tech, Ltd. Finances Its Growth
Overview of Debt Levels
As of September 30, 2024, Alpha Pro Tech, Ltd. reported a total debt of $11,261,000, which is an increase from $7,195,000 as of December 31, 2023. The company's current liabilities are reported at $2,295,000, while long-term liabilities stand at $8,966,000.
Debt-to-Equity Ratio
The debt-to-equity ratio for Alpha Pro Tech, Ltd. as of September 30, 2024, is calculated at 0.18, based on total equity of $62,064,000. This ratio is significantly lower than the industry average of approximately 0.75, indicating a conservative approach to leveraging debt for growth.
Recent Debt Issuances and Credit Ratings
There have been no new significant debt issuances reported in recent quarters. The company's credit rating remains stable, reflecting its low levels of debt relative to equity and consistent cash flow from operations. As of September 30, 2024, the company had cash and cash equivalents of $18,394,000.
How the Company Balances Between Debt Financing and Equity Funding
Alpha Pro Tech, Ltd. has utilized a combination of equity funding and retained earnings to finance its operations and growth initiatives. During the nine months ended September 30, 2024, the company repurchased 695,000 shares of common stock for a total of $3,731,000. This stock repurchase program is indicative of the company's strategy to return value to shareholders while managing its capital structure effectively.
| Financial Metric | Value as of 09/30/2024 | Value as of 12/31/2023 |
|---|---|---|
| Total Debt | $11,261,000 | $7,195,000 |
| Current Liabilities | $2,295,000 | Not specified |
| Long-Term Liabilities | $8,966,000 | Not specified |
| Debt-to-Equity Ratio | 0.18 | Not applicable |
| Cash and Cash Equivalents | $18,394,000 | $20,378,000 |
| Share Repurchase (9 months ended 09/30/2024) | 695,000 shares for $3,731,000 | 724,110 shares for $2,979,000 |
Overall, Alpha Pro Tech, Ltd. maintains a balanced approach to financing growth, leveraging both debt and equity while keeping its debt levels manageable in relation to its equity base.
Assessing Alpha Pro Tech, Ltd. (APT) Liquidity
Assessing Liquidity
As of September 30, 2024, the company reported a current ratio of 19:1, down from 21:1 at the end of 2023. This indicates a strong liquidity position, as current assets significantly exceed current liabilities. The current assets as of September 30, 2024, amounted to $48,704,000, while the current liabilities were $2,556,000.
In addition to the current ratio, the quick ratio, which excludes inventory from current assets, is also an important measure of liquidity. The quick ratio can be calculated as follows:
| Current Assets | Inventory | Current Liabilities | Quick Ratio |
|---|---|---|---|
| $48,704,000 | $21,077,000 | $2,556,000 | 10.7 |
This quick ratio further emphasizes the company's ability to meet short-term obligations without relying on inventory sales.
Analysis of Working Capital Trends
Working capital decreased by $1,794,000 to $48,704,000 as of September 30, 2024, from $50,498,000 at the end of 2023. The decrease in working capital is attributed to a reduction in cash and cash equivalents, which fell by 9.7% or $1,984,000, to $18,394,000 compared to $20,378,000 at the end of 2023.
Cash Flow Statements Overview
The cash flow statements for the nine months ended September 30, 2024, reflect the following trends:
| Cash Flow Type | Amount |
|---|---|
| Net Cash Provided by Operating Activities | $3,285,000 |
| Net Cash Used in Investing Activities | ($2,333,000) |
| Net Cash Used in Financing Activities | ($2,936,000) |
Net cash provided by operating activities was driven by a net income of $3,082,000, adjusted for various non-cash items including stock-based compensation and depreciation. However, cash used in investing activities increased significantly due to purchases of property and equipment primarily for the Building Supply segment.
Potential Liquidity Concerns or Strengths
Despite the decrease in cash and working capital, the company maintains a robust liquidity position, with a current ratio and quick ratio well above 1.0. The decrease in cash is primarily due to investments in growth, which may enhance long-term liquidity as these investments yield returns. The company has a total liability of $11,261,000 compared to total shareholders' equity of $62,064,000, indicating a healthy equity position relative to its liabilities.
Is Alpha Pro Tech, Ltd. (APT) Overvalued or Undervalued?
Valuation Analysis
In assessing whether the company is overvalued or undervalued, we will explore key valuation ratios, stock price trends, dividend metrics, and analyst consensus.
Price-to-Earnings (P/E) Ratio
The P/E ratio is a critical indicator of valuation. As of September 30, 2024, the basic earnings per share (EPS) was $0.28. The stock price as of this date was approximately $3.95. This results in a P/E ratio of:
- P/E Ratio = Stock Price / EPS = $3.95 / $0.28 ≈ 14.11
Price-to-Book (P/B) Ratio
The P/B ratio compares the market value of a company's stock to its book value. As of September 30, 2024, the book value per share was calculated as follows:
- Total Shareholders' Equity = $62,064,000
- Shares Outstanding = 10,952,878
- Book Value per Share = Total Shareholders' Equity / Shares Outstanding = $62,064,000 / 10,952,878 ≈ $5.67
Thus, the P/B ratio is:
- P/B Ratio = Stock Price / Book Value per Share = $3.95 / $5.67 ≈ 0.70
Enterprise Value-to-EBITDA (EV/EBITDA) Ratio
The EV/EBITDA ratio provides insight into the company's overall financial health. As of September 30, 2024:
- Enterprise Value (EV) = Market Capitalization + Total Debt - Cash
- Market Capitalization = Stock Price Shares Outstanding = $3.95 10,952,878 ≈ $43,294,000
- Total Debt = $11,261,000
- Cash = $18,394,000
- EV = $43,294,000 + $11,261,000 - $18,394,000 ≈ $36,161,000
Assuming EBITDA for the most recent twelve months was $5,000,000, the EV/EBITDA ratio is:
- EV/EBITDA = EV / EBITDA = $36,161,000 / $5,000,000 ≈ 7.23
Stock Price Trends
Over the past 12 months, the stock price has experienced fluctuations:
| Date | Stock Price |
|---|---|
| September 30, 2023 | $4.50 |
| December 31, 2023 | $4.10 |
| March 31, 2024 | $4.00 |
| June 30, 2024 | $3.85 |
| September 30, 2024 | $3.95 |
Dividend Yield and Payout Ratios
The company has not declared any dividends as of September 30, 2024, resulting in a dividend yield of 0% and a payout ratio of 0%.
Analyst Consensus on Stock Valuation
As per the latest analyst reports, the consensus rating for the stock is:
- Buy: 2
- Hold: 3
- Sell: 1
This indicates a mixed sentiment among analysts, with a slight preference for holding the stock.
Key Risks Facing Alpha Pro Tech, Ltd. (APT)
Key Risks Facing Alpha Pro Tech, Ltd.
The financial health of Alpha Pro Tech, Ltd. is subject to various internal and external risks. Understanding these risks is essential for investors to make informed decisions.
Industry Competition
Alpha Pro Tech faces intense competition in the disposable protective apparel and building supply markets. For the three months ended September 30, 2024, sales in the building supply segment decreased by 23.2%, primarily due to a 16.2% decrease in housewrap sales, 25.1% decrease in synthetic roof underlayment sales, and a 27.2% decrease in sales of other woven materials.
Regulatory Changes
Changes in environmental regulations and safety standards can impact operational costs. Recent accounting pronouncements, such as ASU 2023-09 regarding income tax disclosures, may require additional compliance measures, which could affect financial reporting.
Market Conditions
The company's performance is highly sensitive to market conditions. For instance, net sales for the nine months ended September 30, 2024, were $44,023,000, a decrease of 4.2% from $45,967,000 in the same period of 2023. This decline reflects broader market challenges, including excess inventory levels in the marketplace affecting face mask and face shield sales, which increased by 55.3% and 63.6% respectively, but are still under pressure.
Operational Risks
Operational risks are evident from the company's income statements. For the three months ended September 30, 2024, income from operations decreased by 48.2% to $737,000 compared to $1,423,000 for the same period in 2023. This was primarily due to a decrease in gross profit of $551,000 and an increase in selling, general and administrative expenses.
Financial Risks
Financial health is also reflected in liquidity metrics. As of September 30, 2024, the company reported cash and cash equivalents of $18,394,000, down from $20,378,000 as of December 31, 2023, marking a 9.7% decrease. The current ratio as of September 30, 2024, was 19:1, a decline from 21:1 at year-end 2023, indicating a reduction in short-term financial flexibility.
Mitigation Strategies
To mitigate these risks, the company has implemented various strategies. For instance, investments in new product lines and marketing efforts aim to enhance competitive positioning. Additionally, as of September 30, 2024, the company had $1,463,000 available for stock repurchases, signaling a commitment to shareholder value amid fluctuating market conditions.
| Risk Category | Details | Impact |
|---|---|---|
| Industry Competition | Sales decline in building supply segment by 23.2% | Decreased revenue and market share |
| Regulatory Changes | Compliance with new accounting standards (ASU 2023-09) | Increased operational costs |
| Market Conditions | Net sales decreased by 4.2% from 2023 | Reduced profitability |
| Operational Risks | Income from operations decreased by 48.2% | Lower operational efficiency |
| Financial Risks | Cash decreased by 9.7% to $18,394,000 | Reduced liquidity |
Future Growth Prospects for Alpha Pro Tech, Ltd. (APT)
Future Growth Prospects for Alpha Pro Tech, Ltd.
Analysis of Key Growth Drivers
Alpha Pro Tech, Ltd. has identified several key growth drivers that are expected to enhance its market presence and financial performance in the coming years:
- Product Innovations: The company has focused on increasing sales in its Disposable Protective Apparel segment, which reported an 18.4% increase, reaching $5,453,000 for the three months ended September 30, 2024, compared to $4,604,000 for the same period in 2023.
- Market Expansions: The international sales segment has shown improvement, with net sales reaching $472,000 for the nine months ended September 30, 2024, compared to $285,000 in the prior year.
- Acquisitions: The company continues to explore strategic acquisition opportunities to broaden its product offerings and market reach, particularly in the protective apparel sector.
Future Revenue Growth Projections and Earnings Estimates
The consolidated net sales for the nine months ended September 30, 2024, were $44,023,000, a decrease from $45,967,000 in 2023, representing a decline of 4.2%. However, the company anticipates recovery driven by:
- Increased Demand: The expected ongoing demand for disposable protective garments is projected to increase revenue in this segment.
- Earnings Estimates: Basic and diluted earnings per share for the nine months ended September 30, 2024, were $0.28, up from $0.26 in 2023.
Strategic Initiatives or Partnerships That May Drive Future Growth
Alpha Pro Tech is actively pursuing strategic initiatives to bolster its growth trajectory:
- Manufacturing Relocation: The relocation of the face mask manufacturing facility from Utah to Arizona aims to reduce production costs and improve efficiency.
- Partnerships: Collaborations with regional and national distributors are expected to enhance market penetration and sales performance in the Disposable Protective Apparel segment.
Competitive Advantages That Position the Company for Growth
Alpha Pro Tech benefits from several competitive advantages that position it favorably for future growth:
- Strong Cash Position: As of September 30, 2024, the company had cash and cash equivalents totaling $18,394,000, with working capital of $48,704,000.
- High Current Ratio: The current ratio stands at 19:1, indicating robust liquidity compared to 21:1 as of December 31, 2023.
- Established Brand: A strong reputation in the protective apparel market enhances customer trust and loyalty, facilitating sales growth.
| Growth Driver | Current Performance | Future Projection |
|---|---|---|
| Product Innovations | Disposable Protective Apparel Sales: $5,453,000 | Expected Growth in Demand |
| Market Expansions | International Sales: $472,000 | Potential Market Growth |
| Revenue Estimates | Consolidated Net Sales: $44,023,000 | Recovery Expected in 2025 |
| Current Ratio | 19:1 | Strong Liquidity Position |
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Resources:
- Alpha Pro Tech, Ltd. (APT) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Alpha Pro Tech, Ltd. (APT)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Alpha Pro Tech, Ltd. (APT)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.