Alpha Pro Tech (NYSE:APT) has experienced extraordinary revenue growth and price appreciation as a result of COVID-19. The stock price has appreciated over 500% YTD! The main growth catalysts are its N95 Particulate Respirator face mask and face shields. There appears room for further stock appreciation given the strong backlog and potential 2020 earnings.
APT is a unique company as its two operating segments are Building Supply and Disposable Protective Apparel.
Per the 2019 10-K:
The Building Supply segment consists of a line of construction supply weatherization products, namely housewrap and synthetic roof underlayment, as well as other woven material. This line of products is a natural extension of our core capabilities: creating proprietary products designed to protect people and environments.
The Disposable Protective Apparel segment consists of a complete line of disposable protective garments (shoecovers, bouffant caps, coveralls, gowns, frocks and lab coats), as well as face masks and face shields.
The historical financial performance has been boring. It's a steady company that generates high-single-digit EBITDA margin and has no debt. How the tables have turned. The novel COVID-19 has caused a spike in demand for N95 masks and face shields. Sales have skyrocketed and so has the stock price. The opening bullet points from the 1Q20 press release say it all:
EPS increases over 300% to $0.39 per diluted share for the quarter.
Revenue for the first quarter of 2020 increased 47.5% to $18.2 million, compared to $12.3 million for the first quarter of 2019.
Net income for the first quarter of 2020 increased 338.6% to $5.3 million, compared to $1.2 million for the first quarter of 2019.
In the release, it is noted that the company has booked $47MM in orders for the N95 mask and $13MM for face shields. The orders are expected to be fulfilled in 2020. A
