Sales Performance - Consolidated sales for the three months ended September 30, 2024, decreased to $14,251,000, down from $16,053,000 for the same period in 2023, representing a decrease of $1,802,000, or 11.2%[78] - Building Supply segment sales for the three months ended September 30, 2024, decreased by $2,651,000, or 23.2%, to $8,798,000 compared to $11,449,000 for the same period in 2023[79] - Disposable Protective Apparel segment sales for the three months ended September 30, 2024, increased by $849,000, or 18.4%, to $5,453,000 compared to $4,604,000 for the same period in 2023[85] - Consolidated sales for the nine months ended September 30, 2024, decreased to $44,023,000 from $45,967,000 for the same period in 2023, representing a decrease of $1,944,000, or 4.2%[88] - Building Supply segment sales for the nine months ended September 30, 2024, decreased by $3,637,000, or 11.9%, to $26,979,000 compared to $30,616,000 for the same period in 2023[89] - Sales of disposable protective garments in the third quarter of 2024 were up by 6.9%, primarily due to increased sales to regional and national distributors[87] - Disposable Protective Apparel segment sales increased by $1,693,000, or 11.0%, to $17,044,000 for the nine months ended September 30, 2024, compared to $15,351,000 for the same period in 2023[94] Profitability and Expenses - Gross profit for the nine months ended September 30, 2024, increased by $620,000, or 3.6%, to $17,743,000, with a gross profit margin of 40.3%, compared to 37.3% for the same period in 2023[98] - Selling, general and administrative expenses increased by $959,000, or 7.2%, to $14,234,000 for the nine months ended September 30, 2024, representing 32.3% of net sales, up from 28.9% in 2023[102] - Income from operations decreased by $386,000, or 12.2%, to $2,775,000 for the nine months ended September 30, 2024, with an operating margin of 6.3%, down from 6.9% in 2023[109] - Net income for the nine months ended September 30, 2024, was $3,082,000, a decrease of $46,000, or 1.5%, with a net income margin of 7.0%, compared to 6.8% in 2023[118] Cash Flow and Liquidity - Cash and cash equivalents decreased by 9.7%, or $1,984,000, to $18,394,000 as of September 30, 2024, compared to $20,378,000 as of December 31, 2023[119] - Inventory increased by $946,000, or 4.7%, to $21,077,000 as of September 30, 2024, driven by a 33.6% increase in the Building Supply segment inventory[122] - The current ratio as of September 30, 2024, was 19:1, down from 21:1 as of December 31, 2023[119] - Other income for the nine months ended September 30, 2024, increased by $224,000 to $1,165,000, primarily due to increased interest income[111] - Net cash used in investing activities for the nine months ended September 30, 2024, was $2,333,000, compared to $487,000 for the same period in 2023, primarily for the purchase of property and equipment[126] - Net cash used in financing activities for the nine months ended September 30, 2024, was $2,936,000, compared to $2,569,000 for the same period in 2023, with $3,731,000 spent on common stock repurchase[128] - As of September 30, 2024, the company had $1,463,000 available for stock purchases under its stock repurchase program, having repurchased 695,000 shares at a cost of $3,731,000 during the nine months[129] - The company believes its current cash balance and expected cash flow from operations will be sufficient to meet projected working capital and planned capital expenditures for the foreseeable future[130] Management Outlook - Management expects growth in the Building Supply segment as uncertainty in the housing market abates, with a surge in synthetic roof underlayment orders following hurricanes Helene and Milton[83] - Management expects growth in the Building Supply segment in the coming year, contingent on housing starts[93] Accounting Standards and Compliance - The FASB issued ASU 2023-09 in December 2023, which will enhance income tax disclosures, effective for fiscal years beginning after December 15, 2024, and the company is evaluating its impact[131] - ASU 2023-07 was issued in November 2023 to improve reportable segment disclosures, effective for fiscal years beginning after December 31, 2023, and the company is currently assessing its implications[132] - Management has not identified any new accounting standards that merit further discussion at this time[133] - As a smaller reporting company, the company is not required to provide additional market risk disclosures[134] Market Conditions - The synthetic roof underlayment market has been affected by uncertain economic conditions and increased offshore competition, but new self-adhered roofing products launched in late 2023 are expected to drive revenue growth[91] - Other woven material sales decreased by 27.2% in the third quarter of 2024 compared to the same period in 2023, primarily due to decreased sales to a customer that was acquired by another company[82]
Alpha Pro Tech(APT) - 2024 Q3 - Quarterly Report