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ANNUAL REPORT2020
STRENGTH IN OUR ... TEAM
STRENGTH IN OUR ... DETERMINATION
STRENGTH IN OUR ... TEAM
STRENGTH IN OUR ... DETERMINATION

CORPORATE
PROFILE

Alpha Pro Tech, Ltd. 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.
TABLE OF CONTENTS
1 Financial Highlights
2 To Our Shareholders
4 Face Masks, Face Shields & Disposable Protective Garments
8 Building Products
Financials
Corporate Information

FINANCIAL
HIGHLIGHTS

1 ANNUAL REPORT 2020

TO OUR SHAREHOLDERS

STRENGTH IN OUR ... NUMBERS

The year 2020 will forever be known as one of the most challenging time periods in our collective history, felt around the globe, throughout all demographics, and the COVID-19 pandemic has taken an unimaginable human and economic toll. And yet, we remain encouraged by the relentless human spirit to overcome this pandemic, through advancements in science, unprecedented manufacturing expansions to meet personal protective equipment (“PPE”) needs to protect our citizens, and the relentless hours our first responders and healthcare workers gave, and continue to give, to help others.

At Alpha Pro Tech, our entire team had an opportunity to demonstrate that our corporate motto was more than just a tagline: Protecting people, products and environments with a diverse portfolio of high-value disposable protective apparel and construction weatherization building products. We worked countless double shifts to dramatically increase our face mask and face shield manufacturing. We secured raw materials across the globe for our disposable protective garments manufacturing. We dealt with supply chain delays and shutdowns, and labor shortages, due to COVID-19. Through all of this, we remained focused on our primary responsibility of delivering inventory to our customers. Our ability to handle our changing world and successfully navigate industry bottlenecks culminated in record operational performances, including sales, net income and cash from operations, while positioning the company at the strongest level ever to begin a new year and to meet the new challenges we face in this rapidly changing environment.

Our Company’s Performance in 2020

In order to provide additional context to our record operational performance in 2020, our milestones included surpassing $100 million in revenue, over $27 million in net income and achieving $1.94 diluted earnings per share, as well as ending the year with over $23 million in cash on hand and no debt.
2 ANNUAL REPORT 2020
Our consolidated net sales in 2020 were driven by face mask sales of $41.8 million, primarily attributable to increased sales of our proprietary N-95 Particulate Respirator face mask, manufactured in Salt Lake City, Utah, which surpassed the prior sales record set in 2009 during the H1N1 pandemic by a multiple of 2.4 times. Face shield sales also had a record year in 2020, surpassing the prior record from 2009 by a multiple of 2.9 times, and sales of our disposable protective garments in 2020 also increased by an impressive 24% from 2019. Our Building Supply segment experienced a record year with growth across all product lines, including synthetic roof underlayment, housewrap and other woven material.

We materially improved our balance sheet throughout 2020. The Company had cash on hand of $23.3 million as of December 31, 2020, which was up over 250% or approximately $17.0 million from December 31, 2019. This substantial increase was driven by increased operating cash flow, even after repurchasing $2.7 million of our common stock and spending $1.2 million on deposits for new equipment for our Building Supply segment.

Looking Ahead to 2021

As we turn the page on a record 2020 and look ahead to 2021, we expect the market for our products to normalize in some respects, although we believe that sales should remain strong as compared to historical levels. Due to open orders remaining at historically high levels, the Company has committed to investing approximately $4 million in new equipment to increase production capacity of the Building Supply segment. Additionally, the Company’s joint venture has ramped up production capacity of our disposable protective garments.

For 2021, we are optimistic about the outlook in the Building Supply segment. We have strong demand for synthetic roof underlayment, in particular, the TECHNO SB® family, as we continue to gain traction and market share. In addition, the outlook for our housewrap product lines, which include REX Wrap®, REX Wrap Plus® and REX Wrap Fortis®, remains positive and we anticipate continued growth in light of continued strong demand. The Company, therefore, has committed to investing in new equipment to support the expected growth.

In the first quarter of 2021, we witnessed a softening in the demand for NIOSH-approved N-95 particulate respirator face masks manufactured by smaller companies like Alpha Pro Tech, creating some uncertainty in the market. As a result, we expect that face mask sales, primarily sales of our N-95 Particulate Respirator face mask, in the first quarter of 2021 will be materially lower than in the fourth quarter of 2020, although we expect to show top line revenue growth as compared to the first quarter of 2020. Going forward, with the improvement in outlook with respect to the pandemic and the growing number of individuals being vaccinated to protect against COVID-19, we expect face mask sales to continue to decline in future periods.

We remain optimistic regarding the outlook for our disposable protective garments. Orders remain at historically high levels, which prompted ramped up production capacity in response to the increased demand. As we continue through 2021, we believe we have strong product and supply chain partners, along with a team that is responsive to the market.

Our achievements and success in 2020 have enabled the Company to focus on the future growth drivers in our markets and expand capacity in order to take advantage of these opportunities. On behalf of our management team and the Board of Directors, thank you for your continued support.
Lloyd Hoffman President and
Chief Executive Officer
3 ANNUAL REPORT 2020

STRENGTH IN OUR ... FACE MASKS, FACE
SHIELDS & DISPOSABLE
PROTECTIVE GARMENTS

  • Alpha Pro Tech’s Disposable Protective Apparel segment comprises a product offering of disposable protective garments, single-use protective face masks to include a USA-made, NIOSH-approved N-95 Particulate Respirator, and face shields and other ancillary products. These products are manufactured and designed for the express purpose of protecting people, products and environments.

    In selling and distributing our disposable protective garments, the primary objective is to work closely with our authorized channel partners, large and small, global and local,
  • in their reach to meet the manufacturing needs of our mutual end‑customers. In this product line, collaboratively, we support the requirements and operating procedures within clean rooms and controlled environments of the pharmaceutical, medical device, and electronics manufacturing space as well as the protective apparel needed in the general industrial market. Our goal here is to provide end-customers with consistently high quality garments that protect both the wearer and the environment in which they work and to exceed the required service levels and other mutually established
  • business objectives of our channel partners. The Alpha Pro Tech Critical Cover® portfolio of apparel products is a comprehensive selection of garment materials and designs to meet a wide range of applications and environments for our customers.

    Outside of the clean room/controlled environment space, Alpha Pro Tech manufactures many products to be utilized exclusively in the medical and dental marketplace. We work with authorized channel partners to demonstrate the unique protective properties of our products. To that end, many of our face masks made in
4 ANNUAL REPORT 2020
Alpha Pro Tech Shoe & Boot Covers come in a variety of material, seam and sole options to meet our end-customers’ diverse applications.
  • USA, including our NIOSH-approved N-95 Particulate Respirator; feature an innovative and patented design called the Positive Facial Lock or PFL®. The PFL® advantage utilizes our exclusive Twist-Seal technology that allows the wearer to create a custom fit to their own facial features. The seal that the PFL® technology creates to the individual’s facial features can prevent many airborne contaminants from entering the wearers breathing zone and ultimately inflicting them with a contagious disease.
  • Additionally, to facilitate comfort and breathability, many of our face masks also contain a second patented and integrated feature called the Magic Arch®. The Magic Arch® upholds the structure and design of the face mask and prevents the face mask from coming in contact with the wearer’s nose and mouth.

    The PFL® and Magic Arch® features work in concert to provide the healthcare worker with a comfortable and effective device and
  • an intangible sense of confidence in their work. Other products in this category that Alpha Pro Tech manufactures and markets are protective face shields, combination face mask and shield (combo devices protect against both airborne and splash hazards), isolation gowns, shoe covers and other disposable apparel garments. These additional products are designed for use in a variety of healthcare environments to add into the protection of the healthcare worker and the people they treat.
5 ANNUAL REPORT 2020

STRENGTH IN OUR ... FACE MASKS, FACE SHIELDS & DISPOSABLE PROTECTIVE GARMENTS

When you need the highest level of protection from particles and/or fluids, our NIOSH-Approved N95 Particulate Respirator or our Laser Plume 638 Face Mask has you covered.
Complimenting Alpha Pro Tech’s line of face masks is our line of combination (combo) face masks with attached shields that provide both respiratory and eye protection.
  • Across all areas of the Disposable Protective Apparel segment, we enable a channel partner strategy with select regional, national and global distributors. Once vetted, we work together to build a lasting rapport and strong sales and marketing collaboration in an effort to
  • achieve our mutual goals. By working in concert, we are able to understand their business model and exceed all of their service-level and other business objectives. Similarly, Alpha Pro Tech’s field-based selling organization and marketing team engages directly at all points in the
  • customer’s supply-chain to achieve our goals. In fact, many of the products in the Alpha Pro Tech Critical Cover® portfolio today are a result of our interaction with end-customers and providing garment solutions for their specific manufacturing needs.
6 ANNUAL REPORT 2020
Two styles to choose from: serged seam and conductive to meet any/all market applications. Different thread colors around the opening provide convenient size identification.
Our ComforTech coveralls are available in three styles to choose from: attached AquaTrak® boots for added slip and fall protection, attached hood and boot version, and standard design with elastic wrist and ankle with a zipper closure for easy donning and doffing.
  • We feel strongly that our umbrella sales and marketing strategy differentiates and protects the Alpha Pro Tech Critical Cover® Brand and delivers high-quality products,
  • enhanced service levels and best-in-class customer support to both our authorized channel partners and mutual end-customers. We take great pride in what
  • we do as a team! At Alpha Pro Tech ‘We Have You Covered’ in so many ways!
7 ANNUAL REPORT 2020

STRENGTH IN OUR ... BUILDING PRODUCTS

  • Navigating the challenges of 2020 presented Alpha Pro Tech with unique opportunities to use our manufacturing processes to our advantage. Although we were not without challenges, we as a company stood up to those challenges and used our advantages to keep us heading in a positive direction called growth. Also, by being able to respond to market demands with control over our manufacturing put us at an advantage above the competition. The past year was all about inventory control,
  • managing costs and keeping quality. No one could have foreseen the rise in demand for our market segments products but rest assured Alpha Pro Tech was ready. With the wide spectrum of products we manufacture and sell in our synthetic roof underlayment, we were able to support customers’ demands as the market tightened in both supply and price. We continued to offer the flagship product, REX SynFelt® and our TECHNOply® product in the coated walking surface products. In the non-woven walking
  • surface, we have 3 distinct products starting with the TECHNO SB® Ultra along with TECHNO SB® 50 and TECHNO SB® 25. With these five products, customers were able to keep product supply moving to the field due to our US-based plant and inventory while the rest of the market was waiting on container shipments to arrive. Aided by our continual growth in the number of distribution points, we were able to react to all of the distributor's needs and maintain product awareness with Alpha Pro Tech
8 ANNUAL REPORT 2020
The flagship housewrap REX Wrap® is still our leading product that we started with from day one.
TECHNO SB® 25 is the market leader when it comes to budget-minded synthetic roof underlayments.
  • still being recognized as the go-to company. Having our US-based operations put us at a significant advantage over much of the industry. Not only did we expand our reach in the synthetic roof underlayment market, but we also expanded our footprint in the housewrap market. The strength of expanding product presence begins with the quality of the product and, with our own manufacturing capabilities, those are controlled processes from start to finish. What started in 2019 with our expanded lineup of sidewall products, continued into 2020 with our top of the line REX Wrap®
  • Fortis with its “Lifetime Warranty” program adding the value of our accessory items like REXTREME Window and Door Flashing and REXTM Premium Seam Tape. The fact that we feel so confident in the quality of our products to offer such a warranty puts us ahead of the competitive field. This also made our commodity driven wraps, REX Wrap® PLUS and REX Wrap®, more valuable to the growth in distribution as we became a single source manufacturer to the distributor as well as the end-point retailer. Also, by having two significant product portfolios in roofing protection and wall
  • protection, the end retailer has found value in keeping the REX brand front and center to the end user. As many know, single sourcing is key to inventory control and Alpha Pro Tech is just the company to cover all of the retailers' needs. We take great pride in the fact that Alpha Pro Tech is a company who lives by three primary principles and never sacrifices one to another - price, quality and service. These core principles are what we stand behind and are the sole reason why Alpha Pro Tech has you covered in every direction!
9 ANNUAL REPORT 2020

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 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
Quarters Ended 2019 3/31 6/30 9/30 12/31
High $4.44 $3.83 $4.07 $3.82
Low $3.60 $3.32 $3.30 $3.20

As of April 12, 2021 there were 13,500,251 shares outstanding, 113 shareholders of record and 27,458 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
Key Bank Tower at City Creek
36 South State Street, Suite 600
Salt Lake City, UT 84111-1400

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, 2020 is available upon request without charge to persons who are beneficial shareholders as of the record date for the 2021 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 9, 2021 at 9:30 am
Alpha Pro Tech - Corporate Head Office
60 Centurian Drive
Suite 112
Markham, Ontario L3R 9R2 Canada
800-847-9725
Corporate Head Office
60 Centurian Drive
Suite 112
Markham, Ontario
L3R 9R2
Phone: 800 847-9725
Fax: 905 479-9732
Email: ir@alphaprotech.com