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Building Supply
Disposable Protective Apparel
Infection Control

BUILDING ON PROFITABILITY

Annual Report 2016

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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 for 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
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Financial Highlights

2015 BUSINESS SEGMENT SALES
IN $ MILLIONS

  • Infection Control
  • Disposable Protective Apparel
  • Building Supply

2016 BUSINESS SEGMENT SALES
IN $ MILLIONS

TOTAL SALES

EPS (DILUTED)

NET INCOME

SHARES OUTSTANDING (DILUTED)
AT YEAR END

APT STOCK PRICE
AT YEAR END

1 Annual Report 2016

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Alexander W. Millar
President and Chairman
Lloyd Hoffman
Chief Executive Officer

To Our Shareholders

Alpha Pro Tech made significant strides in 2016 to improve profitability and our competitive positioning. Consolidated sales for 2016 of $46.2 million were up compared to 2015 sales due to growth in our Building Supply and Infection Control segments. Net income tripled in 2016, which was the direct result of operational improvements, decreasing overall expenses and our continued focus on reducing product costs, which all had a resoundingly positive impact. We successfully navigated industry-wide, competitive pricing pressures, particularly in our Building Supply segment, to increase our sales volumes while driving down costs.

2 Annual Report 2016

To Our Shareholders

Our balance sheet remained strong, with cash on hand of approximately $9.5 million,
a current ratio of 12:1 and zero debt at December 31, 2016. Strong cash flow generation, combined with the strength of our balance sheet, provided us with financial flexibility and the resources to continue our open market repurchases of our common stock. In 2016, we repurchased 2,453,900 shares at a cost of $6.8 million, bringing the repurchase program total to 14,971,531 shares since its inception. All stock is retired upon repurchase. With approximately $2.5 million available for additional stock repurchases at the end of 2016 under our current authorization, we plan to remain active in the repurchase market during 2017.
We enter 2017 in a strong financial position and with expectations for improved profitability as we continue to execute our strategic objectives, launch new products and optimize our balance sheet. All of our capital allocation decisions are made with an eye towards future growth potential and long-term value creation for our shareholders. We look forward to a successful 2017 and communicating our accomplishments as we build on the Alpha Pro Tech brand and continue to develop, manufacture and market innovative, high-value products for the protection of people, products and environments. We thank you for your continued support.

Sincerely,

Alexander W. Millar
President and Chairman

Lloyd Hoffman
Chief Executive Officer

3 Annual Report 2016

Disposable Protective Apparel

Building on Profitability

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Critical Cover® UltraGrip™ Boot Cover

ComforTech™ Coveralls — Provide Superior Protection without Sacrificing Comfort

Critical Cover® GenPro® Bouffant — Basic Head Protection for Non-Hazardous Environments

4 Annual Report 2016

Critical Cover® UltraGrip™ Shoe Covers — the Ultimate in Slip and Fall Protection

ComforTech™ Coveralls — Provide Superior Protection without Sacrificing Comfort

Critical Cover® ComforTech® Lab Coats — Keep Wearers Cool, Comfortable and Protected

Disposable Protective Apparel

The goal in the design and manufacture of all Critical Cover® garments is to keep the wearer cool, clean and comfortable and to provide the right level of protection for the wearer, as well as to protect the environment from possible contamination. To achieve this, we offer a comprehensive selection of materials and garment designs to meet a wide range of applications and environments.
Head-to-toe protective garments highlight Alpha Pro Tech’s limited-use apparel portfolio. From the pharmaceutical production to medical device to electronics markets, we manufacture a variety of configurations and performance characteristics so that our materials exceed the expectations of our customers and the demands of the critical environments in which they operate.
Alpha Pro Tech is a leader in the disposable protective apparel market and is committed to supplying high value and superior performance. Our Critical Cover® apparel is designed to protect people, products and manufacturing environments.

5 Annual Report 2016

Infection Control

Building on Profitability

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PFL® N95 NIOSH Approved Particulate Respirator — Meets Centers for Disease Control (CDC) and World Health Organization (WHO) Recommended Protection Levels Where Applicable

Critical Cover® Coverall® Face Shields — Protection Against Light Splash and Particles

Critical Cover® CoolOne™ Facemasks — Hypoallergenic, Fluid Resistant Sensitive Skin Facemask

6 Annual Report 2016

Infection Control

The innovative and patented Positive Facial Lock (PFL®) feature utilizes our exclusive Twist-Seal technology that allows the user to create a custom fit. Our integrated Magic Arch® prevents the mask from coming in contact with the user’s nose and mouth, thereby making it easier to breathe and enhancing filtration efficiency.
Alpha Pro Tech designs and manufactures a wide range of facemasks and face shields for the medical, dental, laboratory and light industrial marketplaces.
Our facemasks incorporate Alpha Pro Tech’s patented and integrated Magic Arch® and PFL® (Positive Facial Lock®) features that enhance user comfort and product performance.

Critical Cover® ShieldMate® Facemask with Integrated Eye Shield

7 Annual Report 2016

Building Supply

Building on Profitability

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REX™ SynFelt Synthetic Roof Underlayment, our Premium Brand

8 Annual Report 2016

Synthetic Roof Underlayment

Alpha Pro Tech is recognized in the industry as a leading manufacturer, innovator and creator of premium synthetic underlayments, as evidenced by our numerous private label manufacturing agreements outside of our proprietary brands. Products that go unseen, protection that gets noticed – that is what Alpha Pro Tech is recognized for.
Alpha Pro Tech has developed three distinct synthetic underlayments, broadening
our market reach into all areas of the
 roofing industry.
The REX Brand is sought after in the building products distribution market. We currently manage our brand sales through our extensive list of two-step distributors, buying groups and one-step roofing dealers. As the brand grows, so does our list of stocking dealers and distributors. All of this culminates in the demand from home builders and roofers installing our products on a daily basis.

REX™ SynFelt Synthetic Roof Underlayment, our Premium Brand

REX TECHNOply™ Synthetic Roof Underlayment

REX TECHNO SB™ Synthetic Roof Underlayment

9 Annual Report 2016

Housewrap

Along with protecting roofs, Alpha Pro Tech
also has a flagship line of weather resistant housewrap barriers for walls. From the most economically priced product up to systems that offer newer performance standards in the ever changing building industry, we have
you covered.
In keeping our brand consistent, all of our weather resistant barriers fly under the REX brand. There isn’t a wall system that we don’t have a product to cover, as we start with everyday wraps and end with drainage systems that are used in complete wall systems. The REX Wrap family of products makes it simple for customers to choose from one brand, one company and one manufacturer.

REX™ Wrap Weather Resistive Barrier

REX™ Wrap FORTIS Breathable Weather Barrier

10 Annual Report 2016


Download Financial Information

Corporate
Information

MARKET FOR SHARES The Company’s common shares are quoted on the NYSE MKT 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 MKT Exchange for the periods indicated.

Quarters Ended 2016 3/31 6/30 9/30 12/31
High $1.95 $2.55 $3.68 $3.80
Low $1.55 $1.85 $2.20 $2.85
Quarters Ended 2015 3/31 6/30 9/30 12/31
High $2.91 $2.93 $2.30 $2.25
Low $2.20 $2.11 $1.94 $1.55

As of April 10, 2017, there were 15,048,854 shares outstanding, 149 shareholders of record and approximately 5,075 beneficial owners.

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 15th 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 Bradley Arant Boult Cummings LLP
One Federal Place, 1819 Fifth Avenue North
Birmingham, AL 35203-2119

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, 2016 is available upon request without charge to persons who are beneficial shareholders as of the record date for the 2017 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 Chief Executive Officer and Director Alexander W. Millar President and Chairman Colleen McDonald Chief Financial Officer Danny Montgomery Sr. V.P. Manufacturing and Director
David Garcia Director
Retired Independent Businessman Russ Manock Director
Chartered Accountant and Partner – Snow & Manock 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:
Tuesday, June 13, 2017 at 9:30 am
Edward Village Hotel
50 East Valhalla Drive
Markham, Ontario L3R 0A3 Canada
905-477-2010

Corporate Head Office

60 Centurian Drive
Suite 112
Markham, Ontario
L3R 9R2
Phone: 800 847-9725
Fax: 905 479-9732
Email: ir@alphaprotech.com
www.alphaprotech.com