Alpha Pro Tech's Compelling Breakout Quarter

On August 6, 2009, the GeoTeam coded Alpha Pro Tech (APT) as a GeoSpecial at $3.57 after the company reported strong 2009 second quarter financial results. Although we never established a large investment position in Alpha Pro Tech, we had been monitoring the company for several years. Over the past three years the Company's revenues were relatively stagnant and its earnings per share growth was far from spectacular.

	Full Year 2008 Reported	Full Year 2007 Reported	Full Year 2006 Reported
GAAP Revenue	$35.8 million	$35.5 million	$37.3
GAAP EPS	$0.07	$0.10	$0.15

When the company reported that second quarter revenues increased 63% to $14.5 million and earnings per share increased 400% $0.10 vs. $0.07 for all of 2008, the APT story became more compelling, prompting us to dig a bit deeper.

	Second Quarter 2009 Reported	Second Quarter 2008 Reported	Percent Change
GAAP Revenue	$14.5 million	$8.9 million	62.9%
GAAP EPS	$0.10	$0.02	400.0%

Major topics to be addressed:

1. Was this quarter an aberration? Will the company revert back to reporting earnings per share figures between $0.02 to $0.05 as it has over the past three years.

2. The Company has seen a significant contribution to its revenues from its N-95 respirator masks. It has been able to take advantage of public concern over the swine influenza A (H1N1 Influenza A) virus infection pandemic. How long will this trend last? What happens when influenza concerns are alleviated?

3. Alpha ProTech manufactures and markets a line of construction weatherization products, including building wrap and roof underlaymen. What are the prospects of this product line in the midst of the current economic environment? As the housing market has suffered, how has the company been able to experience robust growth in this product line?

As we listened to a replay of the company's second quarter conference call, we heard the company portray a sense of bullishness and confidence in the continuation of its current growth trend, possibly alleviating our concerns that this quarter's financial results were an anomaly.

We will have more details soon.

Source: GeoInvesting.com

Disclosure: Long APT

Comments

[WWA4:]

WWA4 has been following apt for 4 years. Its products are substantially better than its competition's entries. As for the masks
the World Health Organization and the CDC here in Atlanta predict a huge increas in the Swine Flu pandemic, which translates to an overwhelming need for APT masks and medical products.

APT has also be run very well with no debt and great management.
And they are buying in and retiring their stock.
We own shares and will continue buying. We predict a spike close to $9.00 per share

Aug 11 03:10 PM

[WhiteTiger:]

Looks like your patience is paying off. This story is just heating up.

Maj, The GeoTeam

Nov 12 09:02 PM