Financial Performance - Net sales for the three months ended March 31, 2024, were $13,482,000, a decrease of 2.3% compared to $13,800,000 for the same period in 2023[11] - Gross profit increased to $5,417,000 for the three months ended March 31, 2024, compared to $4,982,000 in the same period of 2023, reflecting a gross margin improvement[11] - Net income for the three months ended March 31, 2024, was $576,000, up from $552,000 in the same period of 2023, indicating a growth of 4.4%[11] - Basic earnings per share remained stable at $0.05 for both the three months ended March 31, 2024, and 2023[11] - Operating expenses rose to $5,091,000 for the three months ended March 31, 2024, compared to $4,556,000 in the same period of 2023, an increase of 11.7%[11] - Consolidated net sales for the three months ended March 31, 2024, were $13,482,000, a decrease of 2.3% from $13,800,000 in the same period of 2023[59] - Net income for Q1 2024 was $576,000, an increase of $24,000, or 4.3%, compared to $552,000 in Q1 2023, with net income as a percentage of net sales at 4.3%[112] Assets and Liabilities - Total assets increased to $72,712,000 as of March 31, 2024, up from $68,763,000 at December 31, 2023, representing a growth of 2.8%[7] - Total current liabilities decreased to $2,065,000 as of March 31, 2024, from $2,566,000 at December 31, 2023, a reduction of 19.6%[8] - Shareholders' equity increased to $61,643,000 as of March 31, 2024, compared to $61,568,000 at December 31, 2023, reflecting a slight increase of 0.1%[9] - Total current assets decreased slightly to $52,389,000 as of March 31, 2024, from $53,064,000 as of December 31, 2023[6] - Total accrued liabilities decreased to $449,000 as of March 31, 2024, from $1,103,000 on December 31, 2023, a reduction of 59.3%[50] Cash Flow and Investments - The company reported a net cash used in operating activities of $(1,169,000) for Q1 2024, an improvement from $(1,697,000) in Q1 2023, reflecting a decrease of 31%[21] - Cash and cash equivalents decreased to $18,510,000 as of March 31, 2024, down from $20,378,000 at December 31, 2023, a decline of 9.2%[6] - Cash and cash equivalents at the end of Q1 2024 were $18,510,000, up from $13,821,000 at the end of Q1 2023, marking an increase of 34.5%[21] - The company had $777,000 available for share repurchase under its program as of March 31, 2024[28] - The company repurchased 270,000 shares of common stock for $1,417,000 during Q1 2024, compared to 200,000 shares for $833,000 in Q1 2023, representing a 70% increase in repurchase value[28] Segment Performance - The Building Supply segment generated sales of $8,240,000 for the three months ended March 31, 2024, down from $8,631,000 in 2023, reflecting a decline of 4.5%[59] - The Disposable Protective Apparel segment reported sales of $5,242,000 for the three months ended March 31, 2024, an increase of 1.4% from $5,169,000 in 2023[59] - Core Building Supply products achieved 7.6% growth in sales in Q1 2024 compared to the same period in 2023[96] - Housewrap sales increased by 24.3% in Q1 2024 compared to the prior year, significantly outperforming the market[96] - Disposable Protective Apparel segment sales increased by $73,000, or 1.4%, to $5,242,000 in Q1 2024, driven by a 6.3% increase in face mask sales and a 7.6% increase in face shield sales[102] Compensation and Expenses - Stock-based compensation increased significantly to $109,000 in Q1 2024 from $22,000 in Q1 2023, indicating a rise of 395.5%[21] - The company recognized $94,000 in compensation expense for restricted stock awards in Q1 2024, up from $18,000 in Q1 2023, which is an increase of 422.2%[34] - Selling, general and administrative expenses increased to 36.0% of net sales in 2024 from 31.3% in 2023[92] - Selling, general and administrative expenses increased by $534,000, or 12.4%, to $4,847,000 in Q1 2024, representing 36.0% of net sales compared to 31.3% in Q1 2023[106] Inventory and Receivables - As of March 31, 2024, total inventories amounted to $20,769,000, an increase of 3.2% from $20,131,000 on December 31, 2023[41] - Accounts receivable increased by $938,000, or 14.3%, to $7,483,000 as of March 31, 2024, with days sales outstanding rising to 47 days from 40 days[115] - Inventory increased by $638,000, or 3.2%, to $20,769,000 as of March 31, 2024, primarily due to a 20.6% increase in the Building Supply segment[115] Legal and Regulatory - The Company is pursuing a lawsuit for $490,000 in compensatory damages related to undelivered equipment, which has been written off pending recovery[77] - The Company does not anticipate that pending litigation will materially affect its financial condition or results of operations[78] - The Company has filed income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions, accounting for income taxes using the asset and liability method[73] - The Company is exposed to various risks, including foreign currency exchange risks and reliance on suppliers, which could impact financial performance[81] - The Company’s growth objectives depend on the successful market acceptance of new product offerings and the ability to renew its product pipeline[81] Accounting Policies - The Company is classified as a "smaller reporting company," allowing it to omit certain information from its Management's Discussion and Analysis[84] - There have been no material changes to the Company's critical accounting policies and estimates since December 31, 2023[86] - The company is currently evaluating the impact of ASU 2023-07 on its consolidated financial statements, which will enhance segment reporting disclosures starting in fiscal years after December 31, 2023[1]
Alpha Pro Tech(APT) - 2024 Q1 - Quarterly Report