Alpha Pro Tech (APT) Q2 2024 earnings summary

Executive summary

• Net sales for Q2 2024 increased 1.1% year-over-year to $16.3M, driven by growth in Disposable Protective Apparel, partially offset by a decline in Building Supply sales.

• Net income for Q2 2024 rose 43.5% year-over-year to $1.64M ($0.15 per share), with EPS up from $0.10 in Q2 2023.

• Gross profit margin improved to 42.0% in Q2 2024 from 37.9% in Q2 2023, reflecting margin gains in both segments.

• Cash and cash equivalents as of June 30, 2024: $16.2M; working capital: $50.7M.

• Management expects the remainder of 2024 to be challenging due to continued weakness in the housing market and excess inventory in face masks and shields.

Financial highlights

• Q2 2024 net sales: $16.3M (up 1.1% year-over-year); six-month sales: $29.8M (down 0.5% year-over-year).

• Q2 2024 net income: $1.64M (up 43.5% year-over-year); six-month net income: $2.22M (up 30.7% year-over-year).

• Q2 2024 gross profit: $6.84M (up 12.0% year-over-year); gross margin: 42.0%.

• Q2 2024 operating income: $1.71M (up 30.5% year-over-year); operating margin: 10.5%.

• Inventory increased 3.2% to $20.8M, mainly due to higher Building Supply segment inventory.

Outlook and guidance

• Management anticipates continued sales headwinds in 2024 due to lower housing starts and ongoing market uncertainty.

• Growth in the Building Supply segment is expected when housing market uncertainty abates; disposable protective garments are projected to continue growing.

• Gross margin may be negatively impacted by recent increases in ocean freight rates.