Alpha Pro Tech, Ltd. Announces Third Quarter Financial Results for the Period Ended September 30, 2007.* 18.3% Increase in Quarterly Disposable Protective Apparel Revenue to $ 6.2 Million * Company Anticipates Long-term Growth in this Segment with New Channel Strategy in Place NOGALES Nogales (nōgä`lās), city (1990 pop. 19,489), Santa Cruz co., S Ariz. on the Mexican border with its adjacent city, Nogales (1990 pop. 105,873), Sonora, NW Mexico. There are copper, silver, and lead mines. , Ariz. -- Alpha Pro Tech (AMEX AMEX See: American Stock Exchange :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 third quarter and nine months of fiscal 2007, the period ended September 30, 2007. Consolidated sales for the third quarter ended September 30, 2007 increased 4.0% to $9.3 million from $8.9 million in the comparable quarter in 2006. The increase was primarily due to increased sales of Disposable Protective Apparel and Infection Control products, partially offset by a decrease in Engineered Product sales. Sales for the Disposable Protective Apparel segment for the quarter increased 18.3% to $6.2 million compared to $5.2 million for the same period of 2006. The increase is primarily attributable to increased sales to cleanroom and industrial distributors and to a lesser extent to increased sales to the Company's largest distributor. Infection Control segment sales for the quarter increased 2.6% to $1.5 million compared to $1.4 million for the same period of 2006. Both Mask and Shield sales in this segment were up slightly during the third quarter of 2007. Engineered Products segment sales for the quarter decreased by 28.7% to $1.4 million compared to $2.0 million for the same period of 2006. The decrease is primarily related to a 40.8% decrease in sales of house wrap, partially offset by a 3.3% increase in sales of roof underlayment. The decrease relates to a change in the Company's distribution strategy, in which the Company decided to move forward on a non-exclusive basis with its former distributor, which led the distributor to source product from other suppliers and to ultimately discontinue dis·con·tin·ue v. dis·con·tin·ued, dis·con·tin·u·ing, dis·con·tin·ues v.tr. 1. To stop doing or providing (something); end or abandon: purchasing from Alpha Pro Tech. In addition, the downturn in the housing market hurt sales, primarily the house wrap line, as fewer houses are being built and distributors are keeping inventories low. Al Millar, President of Alpha Pro Tech commented, "The positive impact of the change in our distribution strategy for our Disposable Protective Apparel segment is reflected in the double digit Noun 1. double digit - a two-digit integer; from 10 to 99 integer, whole number - any of the natural numbers (positive or negative) or zero; "an integer is a number that is not a fraction" sales growth in the third quarter year over year. This change in strategy has enabled us to gain additional market share as we develop relationships with other industrial and cleanroom distributors. We are greatly encouraged by the acceptance of our product line by our expanded distribution channel. We see this as a strong positive indicator and are optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op that we can continue to diversify diversify To acquire a variety of assets that do not tend to change in value at the same time. To diversify a securities portfolio is to purchase different types of securities in different companies in unrelated industries. sales in this key growth area. In addition, we continued our Engineered Products marketing efforts, which are primarily focused on our REX REX - The original name for Restructured EXtended eXecutor. Synfelt[TM] roof underlayment. We expect significant growth from this product line in 2008 as our pipeline of new customers continues to expand. Since the formation of our internal sales team, we have increased our distribution opportunities and anticipate increased revenue from these efforts as we move into 2008. We also expect that our house wrap sales should start to improve in 2008 as we sign up new distributors and as our vendor agreement with ABC ABC in full American Broadcasting Co. Major U.S. television network. It began when the expanding national radio network NBC split into the separate Red and Blue networks in 1928. Supply Co. and its division, Amcraft Building Products ramps up. This has started off very slowly due to a weak housing market but we expect it to start to gain traction in early 2008 as depleted de·plete tr.v. de·plet·ed, de·plet·ing, de·pletes To decrease the fullness of; use up or empty out. [Latin d inventories will need to be replenished." Gross profit increased by 7.1% to $4.4 million for the third quarter 2007, or 47.2% gross profit margin Gross profit margin Gross profit divided by sales, which is equal to each sales dollar left over after paying for the cost of goods sold. gross profit margin A measure calculated by dividing gross profit by net sales. , from $4.1 million, or 45.9% gross profit margin, for the same period in 2006. Gross profit margin on the Engineered Products segment continued to improve in the third quarter of 2007 and although the gross profit margin in the Engineered Products segment remains considerably lower than the overall company margin, management expects continual improvement Continual Improvement (also called incremental improvement or staircase improvement) is a process or productivity improvement tool intended to have a stable and consistent growth and improvement of all the segments of a process or processes. in 2007. Selling, general and administrative expenses increased by 11.9% to $2.9 million for the third quarter 2007 from $2.6 million for the same quarter last year. Expenses in the quarter are the lowest this year although still up quarter over quarter from the year-ago period. The increase was primarily due to increased travel to Asia and increased expenses in the Engineered Products segments for employee compensation, sales compensation and marketing and general expenses. Income from operations decreased by $21,000, or 1.6%, to $1,332,000 for the third quarter of 2007 as compared to income from operations of $1,353,000 for the same quarter last year due to the increase in SG&A expenses partially offset by an increase in gross profit. Income before provision for income taxes for the third quarter was $1,488,000 compared to $1,400,000 last year, an increase of 6.3%. The provision for income taxes for the third quarter was $572,000 compared to $518,000 for the third quarter of 2006. The effective tax rate was 38.4% for the quarter ended September 30, 2007 and was 37.0% for the same quarter of 2006. Net income for the quarter was $916,000, or $0.04 per basic and diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share (based on 25.6 and 25.6 million shares, respectively) compared to net income of $882,000, or $0.04 per basic and diluted share (based on 24.1 and 25.1 million shares, respectively) for the third quarter of 2006. Net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight for the first nine months of 2007 were $27.5 million, an increase of 2.6% compared to net sales of $26.8 million last year. Gross profit for the first nine months was $12.8 million, or 46.7% gross profit margin, compared to gross profit of $12.4 million, or 46.1% gross profit margin last year. Selling, general and administrative expenses were $9.6 million, an increase of 21.8% compared to SG&A expenses of $7.8 million for the first nine months of last year. Income from operations for the nine months was $2.9 million, a decrease of 30.0% compared to income from operations of $4.2 million last year. Net income for the first nine months of 2007 was $2.0 million, or $0.08 per basic and fully diluted share (based on 25.2 and 25.6 million shares, respectively) compared to net income of $2.7 million, or $0.11 per basic and fully diluted share (based on 24.1 and 25.1 million shares, respectively) for the same period last year. The balance sheet continued to remain strong with a current ratio of 13.3 to 1 on September 30, 2007. The Company completed the quarter with cash and cash equivalents of $4.2 million and working capital of $23.0 million. Inventories during the quarter totaled $13.9 million, up 9.1% compared to inventories as of December 31, 2006. Inventory for the Engineered Product segment is up for the year but is relatively flat since the end of the first quarter 2007. The Company currently has no outstanding debt and maintains an unused $3.5 million credit facility. About Alpha Pro Tech, Ltd. 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. In addition, Alpha ProTech Engineered Products, Inc. manufactures and markets a line of construction weatherization products, including building wrap, roof underlayment and mold mold, name for certain multicellular organisms of the various classes of the kingdom Fungi, characteristically having bodies composed of a cottony mycelium. The colors of molds are caused by the spores, which are borne on the mycelium. resistant framing sealant Sealant A thin plastic substance that is painted over teeth as an anti-cavity measure to seal out food particles and acids produced by bacteria. Mentioned in: Tooth Decay sealant see bone sealant. . The Company has manufacturing facilities in Salt Lake City, Utah For ships of the United States Navy of the same name, see . Salt Lake City is the capital and the most populous city of the U.S. state of Utah. The name of the city is often shortened to Salt Lake, or its initials, S.L.C. ; Nogales, Arizona Nogales is a city in Santa Cruz County, Arizona, United States. The population was 20,878 at the 2000 census. According to 2005 Census Bureau estimates, the population of the city is 20,833.[1] The city is the county seat of Santa Cruz County. ; Janesville, Wisconsin Janesville is a city in southern Wisconsin. It is the county seat of Rock CountyGR6 and the principal municipality of the Janesville, Wisconsin Metropolitan Statistical Area. As of the 2000 census, the city had a population of 59,498. ; Valdosta, Georgia The city of Valdosta is the county seat of Lowndes County, Georgia, United States. It is the principal city of the Valdosta, Georgia Metropolitan Statistical Area. As of the 2000 census, the city had a total population of 43,724. ; 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. The Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995 ("Act") provides a safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. for forward-looking information made on behalf of the Company. Forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. involve risks, uncertainties and assumptions as described from time to time in registration statements, annual reports and other periodic reports and filings of the Company filed with the Securities and Exchange Commission. All statements, other than statements of historical facts which address the Company's expectations of sources of capital or which express the Company's expectations for the future with respect to financial performance or operating strategies, can be identified as forward-looking statements. As a result, there can be no assurance that the Company's future results will not be materially different from those described herein as "believed," "anticipated," "estimated" or "expected," which reflect the current views of the Company with respect to future events. We caution readers that these forward-looking statements speak only as the date hereof here·of adv. Of this. hereof Adverb Formal or law of or concerning this Adv. 1. hereof - of or concerning this; "the twigs hereof are physic" . The Company hereby expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any such statements to reflect any change in the Company's expectations or any change in events, conditions or circumstances on which such statement is based.
[TABLE OMITTED]
BALANCE SHEET HIGHLIGHTS > >
> >
> > September 30-
December 31st
> > 2007
2006
Cash > > $4,187,000
$1,837,000
Total Current Assets > > $24,907,000
$22,297,000
Net Property and Equipment > > $3,365,000
$3,355,000
Total Assets > > $29,685,000
$26,852,000
Total Current Liabilities > > $1,876,000
$2,679,000
Total Liabilities > > $2,634,000
$3,372,000
Shareholder's Equity > > $27,051,000
$23,480,000
Total Liabilities and Equity > > $29,685,000
$26,852,000
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