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ANNUAL REPORT 2021

CORPORATE PROFILE

Alpha Pro Tech, Ltd. (the Company) is in the business of protecting people, products and environments. The Company accomplishes this by being a leading designer, developer, manufacturer and marketer of high-value disposable protective apparel, building supply, infection control and other products for the medical, dental, cleanroom, pharmaceutical, industrial safety, construction supply and consumer markets.

The Company’s growth strategy is to provide innovative solutions to its customers and create meaningful value for its shareholders. Alpha Pro Tech has a reputation of combining extensive research and development with the highest levels of responsiveness, quality, safety and reliability.

Alpha Pro Tech’s manufacturing facilities and offices are located in Arizona, Georgia and Utah in the United States, as well as in Canada and India.

FINANCIAL HIGHLIGHTS

1 ANNUAL REPORT 2021
Lloyd Hoffman
President and
Chief Executive Officer

TO OUR SHAREHOLDERS

Alpha Pro Tech began 2021 with a material transformation from the record setting pandemic driven sales in 2020. This shift returned the Company to our historical product mix, where building supply and disposable protective garments drive the majority of revenue. Over the past two years, our team has done a remarkable job of rapidly re‑positioning resources to enable the Company to execute in real time to execute on opportunities that drove shareholder value. Our talented and resilient team came together time and time again to position Alpha Pro Tech for future growth opportunities, optimizing the leverage in our operations through these material shifts.

Despite the overall reduction in revenue compared to 2020, our Building Supply segment sales were a record for the year ended December 31, 2021, with continued significant growth due to strong demand for both our synthetic roof underlayment and housewrap products. Sales increased 20.6% for the year to $36.9 million and we are encouraged by the current demand for our Building Supply products and anticipate strong continued growth in 2022.

The Company has committed to increasing production capacity in our Building Supply segment by investing approximately $4.0 million in new equipment, a part of which became operational in the latter part of the third quarter of 2021. The remaining equipment is expected in the latter part of the second quarter of 2022 and is expected to be operational in the third quarter of 2022, driving further capacity. Our marketing efforts to broaden acceptance of the Company’s bundled system of selling housewrap, with associated accessories, is becoming increasingly accepted in the market and driving incremental sales. In addition, our growth has been augmented by utilizing a strategic approach to adding additional dealers through aggressive sales strategies, vertical
2 ANNUAL REPORT 2021
integration and having control of our manufacturing unlike most of our competitors. By adding the additional dealers, distribution channels and additional products in the roofing sector, we remain confident in maintaining our sales growth.

The decrease in Disposable Protective Apparel segment sales in 2021 was driven by reduced demand in our face masks, primarily our N-95 Particulate Respirator face mask, face shields and to a lesser extent, reduced COVID-19 associated usage of our disposable protective garments. Even with the reduction of COVID-19 associated garment sales, for the full year the Company grew disposable protective garment sales by 3.5%. The Company did see an increase in mask and shield sales in the first quarter of 2022, compared to the latter part of 2021, due to the COVID-19 variant Omicron, but it is uncertain how long this will continue.

Our consolidated net sales in 2021 decreased to $68.6 million, from $102.7 million in 2020, representing a decrease of $34.1 million, or 33.2%. This decrease consisted of decreased sales in the Disposable Protective Apparel segment of $40.4 million, partially offset by a $6.3 million increase in sales for the Building Supply segment.

Our balance sheet remains debt free with cash over $16 million despite $2.5 million utilized to increase our production capacity in the building supply segment, $4.4 million utilized in our stock buy-back program and increasing our inventory levels by over $8 million. The Company is well positioned to execute on the growth opportunities in 2022 and beyond.

As we progress through 2022, we believe that sales will remain strong as compared to historical levels and the Company has made significant investments to increase our manufacturing capacity. We have increased our inventory levels in both of our business segments to offset supply chain disruptions and are well prepared to execute on the increased demand in these channels. Finally, our inventory and production capacity for masks remain to enable the Company to quickly respond to any future demand spikes.

On behalf of our management team and the Board of Directors, thank you for your continued support.
Sincerely, Lloyd Hoffman President and
Chief Executive Officer
3 ANNUAL REPORT 2021
  • AlphaProTech not only distributes products; it engineers, develops, manufactures and distributes multiple building products. All of our products serve a distinct purpose in the construction process but at the same time work in concert with one another. Each product serves a role in the weatherization of the building structure. Starting on the roof, we currently manufacture five different nail based synthetic roof underlayments starting with our crown jewel underlayment, REX SynFelt, and going all the way down to our most economical product, TECHNO SB25. Our success in the continual growth of these products is our ability to deliver a quality product in a timely manner on each and every order. AlphwarraProTech is recognized as the go to company when quality and service count the most and that has been proven time and time again. As we continue to expand our roofing products, we are looking at developing additional product offerings to compliment the nail based underlayments. Regardless of the size of the roof or budget, AlphaProTech has a product to offer. But AlphaProTech not only has expanded its reach in the underlayment market, we have also expanded our reach in the housewrap market as well. Again, our ability to manufacture quality products as well as our ability to deliver finished products to the market have made us the leader in the side wall envelope market. By expanding our lineup of products, AlphaProTech now has a complete wall weatherization system. Not only does the new lineup consist of wrap, since we have now launched a window and door flashing, REXTREME, to the product mix. Our strength now lies in the warranty systems we offer by purchasing and installing our wrap, flashing and tape during the construction process. This warranty is now beginning to become the gold standard in the industry. With our industry leading “Lifetime Warranty”, by installing our premium REX Wrap® Fortis along with the new flashing and our REXTM Premium Seam Tape, we give peace of mind to the builder as well as the structure owner. Also, another one of our most sought after strengths in the distribution market is our ability to custom print all of our products to meet the demands of the dealer and the builder. Again, we pride ourselves in our service levels as well as our quality of product and delivery. Today, AlphaProTech offers a solution for every type of build and budget along with peace of mind with our industry leading warranties on all of our product offerings. Anyone can import products, but it takes a great company and great people to manufacture quality products. AlphaProTech has you covered in every direction!
4 ANNUAL REPORT 2021
From single family
to multi-family
developments,
we cover from
the roofs to the
walls. Our system
has you covered
in every direction.
Combine our
product offerings to
give you peace of mind
in the weatherization
of any structure. WE
HAVE YOU COVERED!
5 ANNUAL REPORT 2021
  • AlphaProTech has been in the Disposable Protective Apparel and Face Mask / Face Shield Manufacturing business for over 30 years. We endeavor to design, enhance and manufacture better products in an effort to keep up with the latest technologies and changing needs of our customers. It has never been more apparent these past two years during a global pandemic.

    Enhancements, investments and upgrades to our mask manufacturing facility here in the United States as well as refinements to our logistics overseas have allowed us to support the increased demand for our products and limit our challenges in a supply chain crunch. Our efforts have put us in a better position to compete and win new business going forward!

    Building better Face Masks and Protective Shields is for the express purpose of protecting the healthcare worker and their peers as well as the people they treat. Our Face Masks and Shields have also gained traction in the public / personal sector – as people have become accustomed to using our products in their everyday life.

    Commercially, we work closely with AlphaProTech authorized medical & dental distributors worldwide, along with other healthcare consortiums, to demonstrate and promote the unique physical properties of our products. To that end, many of our Face Masks made in the USA feature an innovative and patented design called the Positive Facial Lock or PFL® and Magic Arch®. The PFL® feature utilizes our exclusive Twist-Seal technology that allows the wearer to create a custom fit. The seal that the PFL® technology creates to the individual’s unique facial features can prevent airborne contaminants from entering the wearer's breathing zone. The Magic Arch® feature facilitates comfort and breathability and upholds the structure and design of the Face Mask to prevent the Face Mask from coming in contact with the wearer’s nose and mouth.
6 ANNUAL REPORT 2021
When you need
the highest level of
protection from
particles and/or
fluids, our NIOSH
Approved N95 or
our Combo
Mask/Shield
Product are built to
meet your needs.
Our line of
CoolOne® Face
Masks are
designed and built
with features to
accommodate for
the wearer’s
breathability and
comfort - as well
as for those with
sensitive skin.
7 ANNUAL REPORT 2021
  • AlphaProTech’s Disposable Protective Apparel segment comprises a product offering of high quality Disposable Garments that are designed and built for the express purpose of protecting wearers from the environment they work in and/or for protecting the product they are manufacturing.

    This segment’s primary objective is to work closely with all of our authorized channel partners, global and regional, to meet the protective requirements of our mutual end-customers employees. By working together, we identify, validate and support the requirements and operating procedures for clean rooms and controlled environments in the pharmaceutical, medical device, and electronics manufacturing space. AlphaProTech also manufactures Disposable Protective Garments designed for use in the general industrial / manufacturing marketplace; i.e. light industrial, warehousing, and non-hazardous environments.

    To that end, the AlphaProTech Critical Cover® portfolio of Disposable Protective Apparel Products includes a comprehensive selection of garment materials and designs to meet a wide range of applications and environments. Additionally, in an effort to protect the Critical Cover® brand name, we endeavor to build lasting rapport and strong sales, marketing and customer support for our customers - in an effort to achieve our mutual goals. It is our agility, flexibility and creativity in this space that separates AlphaProTech from our competition!
8 ANNUAL REPORT 2021
Our disposable Coveralls & Lab Coats
are essential garments in the life sciences
marketplace. AlphaProTech manufactures a
wide selection of materials and configurations
to protect the wearer as needed.
AlphaProTech Shoe & Boot Covers
come in a variety of material
and sole options to meet our
customers’ diverse applications.
9 ANNUAL REPORT 2021

FINANCIAL
INFORMATION

Download Financial Information

CORPORATE
INFORMATION

MARKET FOR SHARES

The Company’s common shares are quoted on the NYSE American Exchange under the trading symbol “APT.”

SHARE PRICE INFORMATION

Set forth below are the ranges of daily high and low prices for the Company’s common shares on the NYSE American Exchange for the periods indicated.

Quarters Ended 2021 3/31 6/30 9/30 12/31
High $20.54 $10.49 $12.35 $8.29
Low $9.13 $7.57 $6.66 $4.91
Quarters Ended 2020 3/31 6/30 9/30 12/31
High $41.59 $20.60 $25.55 $17.08
Low $3.40 $9.05 $11.88 $10.54

As of April 11, 2022 we had 12,969,391 shares outstanding; 107 shareholders of record and 17,735 beneficial shareholders.

DIVIDEND POLICY

The holders of the Company’s common stock are entitled to receive such dividends as may be declared by the Board of Directors of the Company from time to time to the extent that funds are legally available for payment thereof. The Company has never declared or paid any dividends on any of its outstanding shares of common stock. It is the current policy of the Board of Directors to retain any earnings to provide for the development and growth of the Company. Consequently, the Company has no current intention to pay cash dividends in the foreseeable future.

TRANSFER AGENT AND REGISTRAR

Shareholders should refer specific questions concerning their stock certificates, in writing, directly to the Transfer Agent and Registrar at:
American Stock Transfer & Trust Company
6201 15 Avenue
Brooklyn, NY 11219

INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM

Tanner LLC
3300 N. Triumph Blvd., Suite 410
Lehi, UT 84043

LEGAL COUNSEL

Maynard Cooper & Gate
1901 6th Avenue N, Suite 1700
Birmingham, AL 35203

FORM 10-K

A copy of the Annual Report on Form 10-K filed by the Company with the Securities and Exchange Commission for the fiscal year ended December 31, 2021 is available upon request without charge to persons who are beneficial shareholders as of the record date for the 2022 Annual Meeting. Such written requests should be directed to:
Alpha Pro Tech, Ltd.
60 Centurian Drive, Suite 112
Markham, Ontario L3R 9R2 Canada

OFFICERS AND DIRECTORS

Lloyd Hoffman

President and Chief Executive Officer and Director

Colleen McDonald

Chief Financial Officer

Danny Montgomery

Sr. V.P. Manufacturing and Director

Donna Millar

Investor Relations and Director

David Garcia

Director
Retired Independent Businessman

Russ Manock

Director
Russ Manock Chartered Professional Accountant

Dr. John Ritota

Director
Dentist – Ritota & Ritota P.A.

James W.A. Buchan

Director
Management – Bell Canada

ANNUAL MEETING

The Annual Meeting of Shareholders will be held:
Wednesday June 8, 2022 at 9:30 am
Courtyard by Marriott Markham
65 Minthorn Blvd.
Markham, Ontario L3T 7Y9
905 707-6533
Corporate Head Office
60 Centurian Drive
Suite 112
Markham, Ontario
L3R 9R2
Phone: 800 847-9725
Fax: 905 479-9732
Email: ir@alphaprotech.com