Alpha Pro Tech (APT): A Vital Building-block in biotech and pharmaceutical industry.

FOR IMMEDIATE RELEASE
(Free-Press-Release.com) April 19, 2010 -- While some refer to it as a natural disaster or pandemic relief play, at TimelessWealth.net we are of the opinion that Alpha Pro Tech Ltd. (AMEX: APT) is a value play when trading at a 5.7X trailing earnings multiple and price to sales ratio of just 0.82. Add 67% sales growth year-over-year in 2009 and an impressive 1099% jump in earnings for the fourth quarter 2009 compared to the same period in 2008.

The company's products are classified into three business segments. Source: http://www.alphaprotech.com/about/about.aspx

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Alpha Pro Tech (APT): A Vital Building-block in biotech and pharmaceutical industry.

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(i)Protective Apparel featuring a complete head to toe protective apparel line, consisting of shoe covers, coveralls, bouffant caps, gowns, frocks and lab coats;
(ii)Infection Control consisting of a full line of face masks, eye shields and medical bed pads as well as a line of pet beds, and
(iii)Building Products consisting of house wrap and synthetic roof underlayment.

When H1N1 (Swine Flu) fears arose, Alpha Pro Tech experienced an increasing demand for their line of face masks and other infection control products. While global fears of this recent pandemic have fallen, history shows that another, more sophisticated pandemic will inevitably follow. While at times we would like to ignore these cruel thoughts, the reality of the situation is that Alpha Pro Tech will again report a spike in demand for their line of infection control products. (see attached)

Considering the company's Protective Apparel line, Alpha Pro Tech distributes a necessity to the biotechnology and pharmaceutical industries. Whether investors realize it or not, a great deal of research and development takes place prior to a novel drug or product being submitted to the Federal Drug Administration (FDA) for 'approval'. Collectively, long years of trials comprise a great expenditure in protective apparel such as shoe covers, coveralls, bouffant caps, gowns, frocks and lab coats. In other words, the multi-billion dollar biotech and pharmaceutical industries rely upon manufacturers of protective apparel products, presently, Alpha Pro Tech Limited.

But what rationale can offer an explanation as to why the stock price is trading at 70% discount to its 52-week high ($7.60)?

On March 29th, 2010, Alpha Pro Tech reported:

"VWR International, LLC ("VWR") has historically been the Company's largest distributor of disposable protective apparel. [...] On or about March 18, 2010, the Company received confirmation that VWR had decided to launch its own, potentially competing, private label line of disposable protective apparel and to transition away from selling the Company's products. As a result of this decision, effective March 26, 2010, the Company is no longer supplying VWR with Critical Cover proprietary shoe and boot apparel. The Company is now making its Critical Cover proprietary shoe and boot apparel available through a broader distribution network. The Company anticipates that the balance of its Critical Cover product line will be available through both this broader distribution network and VWR. It is unclear what effect the Company's changed relationship with VWR will have on the Company's ability to sell its Critical Cover product line, including its Critical Cover disposable protective apparel."

Three weeks since these news were released, the price has retraced to an April 2009 supporting level (see attached weekly chart or open the following link: http://timelesswealth.net/tempo/apt-chart.png)

A long position in this equity can be justified by the continued demand for their line of medical products, encouraging growth in working capital ($29M) in 2009, no outstanding debt and an unused $3.5 million credit facility. Source: http://finance.yahoo.com/news/Alpha-Pro-Tech-Ltd-Announces-bw-1108127399.html?x=0&.v=1

It may be redundant to speculate whether or not Alpha Pro Tech will find another distributor to take VWR's place. Perhaps it is a matter of when one or more distributors will 'fill' VWR's previous role. Some investors may speculate that the market will react favorably and adjust to a higher price per share as we await further news from the company. Meanwhile, Alpha Pro Tech's Board of Directors "authorized an additional $2.0 million of stock repurchases under [their] stock repurchase program." So while investors may be hesitant to retire a few shares of Alpha Pro Tech Limited, the Company is actively buying up their own common shares at a considerable discount.

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