December a new field of health care equipment and

December 9, 2017

James Hugh, CEO of Western Structures

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Julia
Distefano, Chief Financial Officer of Western Structures

80 Saramia Crescent, Unit #1

Concord, Ontario

L4K 3Z8

 

 Dear Mr. Hugh,

 

 

Expanding
Western Structures is extremely important in order to achieve ultimate success
for the oncoming future for the company. In our recent discussions regards to
expanding our business through potentially acquiring another company, through
recent research I have found a new candidate to acquire that will allow us to
expand our current business and also diversify into the exciting new field of
healthcare.

 

Western
Structures is currently a building materials company that manufactures and
sells building material products to the construction industry. With acquiring
this candidate company Alpha Pro Tech which
specializes in selling building protection material, disposable protective
apparel, and infection control which includes the sale of face masks and eye
shields. This gives our company the opportunity to not only sell building
material products but to expand and diversify into a new field of health care
equipment and have a new business you can tap into and inquire a greater
profit.

 

 

Full Description of Alpha Pro Tech

 

ALPHA PRO TECH,
LTD. (Alpha Pro Tech), incorporated on June 15, 1994, is in the business of
protecting people, products and environments. The Company is engaged in
developing, manufacturing and marketing a line of disposable protective apparel
and infection control products for the cleanroom, industrial, pharmaceutical,
medical and dental markets through its subsidiary, Alpha Pro Tech, Inc. The
Company’s products are grouped into three segments: Building Supply segment,
Disposable Protective Apparel segment and Infection Control segment. Its
products are sold under the Alpha Pro Tech brand name, as well as under private
label. Its products are used primarily in cleanrooms, industrial safety
manufacturing environments and healthcare facilities, such as hospitals,
laboratories and dental offices, as well as building and re-roofing sites. Its
products are distributed in the United States through a network consisting of
purchasing groups, national distributors, local distributors, independent sales
representatives, and its own sales and marketing force. It also manufactures a
line of building supply construction weatherization products through its
subsidiary, Alpha ProTech Engineered Products, Inc.

 

Building Supply

 

The Building
Supply segment consists of a line of construction supply weatherization
products, such as housewrap and synthetic roof underlayment, as well as other
woven material. The housewrap, under the trademark REX, offers a weather
resistant barrier. REX Wrap and REX Wrap Plus are woven and coated
polypropylene micro perforated weather resistant barriers, and REX Wrap Fortis
is an engineered composite made up of a woven fabric, a monolithic breather
film and a non-woven sheet, offering a non-perforated membrane. The Company’s
synthetic roof underlayment, REX SynFelt, has the ability to resist the
environment. The Company also manufactures and distributes TECHNOply and TECHNO
SB.

 

Disposable Protective Apparel

 

The Disposable
Protective Apparel segment includes different styles of disposable products,
such as shoecovers, bouffant caps, gowns, coveralls, lab coats and frocks. The
Disposable Protective Apparel segment also offers other miscellaneous products.

 

 

 

Infection Control

 

The Infection
Control segment includes face masks and eye shields. The Company’s face masks
are available in various filtration efficiencies and styles. Its Positive
Facial Lock feature provides a custom fit to the face to prevent blow-by for
protection. The term blow-by is used to describe the potential for infectious
material to enter or escape a facemask without going through the filter as a
result of gaps or openings in the face mask. The Company’s Magic Arch feature
holds the mask away from the nose and mouth, creating a breathing chamber. Its
N-95 Particulate Respirator face mask incorporates both the Positive Facial
Lock feature and the Magic Arch feature. The face masks are primarily
manufactured in the Company’s facility in Salt Lake City, Utah. Its eye shields
are produced in the Company’s facility in Nogales, Arizona, and assembled by a
subcontractor in Mexico.

The Company
competes with Kimberly-Clark Corporation, 3M Company, Johnson & Johnson,
White Knight Engineered Products, Cardinal Health, Inc., Medline Industries
Inc., VWR International, LLC, Kappler, Inc., Allegiance Healthcare Corporation,
DuPont and Interwrap Inc.

 

 

Alpha Pro Tech, Ltd. Financial Results
For The Third Quarter Summary

GlobalNewswire Nov.8,2017

 

Revenue for the third quarter of 2017
increased 2.3% to $12.0 million, compared to $11.8 million in the third quarter
of 2016  Gross margin for the third quarter of 2017
increased to 39.1%, up from 38.3% in the third quarter of 2016  Net income for the third quarter of 2017
increased 8.2% to $1.1 million, or $0.07 per diluted share, compared to $1.0
million, or $0.06 per diluted share, for the same period of 2016  Signed exclusive contract with JX Nippon
ANCI, Inc. to launch a new product line, REX™ Wrap Fortis House Wraps with JX
ALTA 360° Drainage Technology™There is zero debt, accompanied by about
$9-million in cash. Cash flow is regularly positive. Currently, Mr. Hoffman says the major
opportunity for the enterprise’s potential growth is a “breathable” house wrap
membrane the weather-resistant barrier that sits between the siding and the
wood of a house. The breathable-type membrane is the only kind used in Canada.
In the United States, non-breathable is used, but Alpha’s goal is to make
breathable more the norm. The potential market is huge and largely untapped. Alpha has doubled its sales force to six to
expand in this realm. The company is also exploring sales of protective apparel
products in India, where it employs more than 1,000 people in four factories.
That compares with 120 staff in North America. If the $36,000 feasibility study
is positive, this country could prove to be another market.

One strategy
that Alpha regularly deploys on a major scale is a share buyback. Since 2012,
the share count is down from 22 million to about 15 million. The share price
has increased from January 1st 2013 from a $1.56 US to $4.05 US today.                      After obtaining these facts about
this company it is in Western Structures best interest to acquire Alpha Pro
Tech. This company’s building supply segment 
is compatible with our current field of expertise and will be able to
add new products to our current product line.Not only would we be acquiring a
business in an area of our expertise but we but it gives Western Structures the
chance to diversify into the field of healthcare products.             Acquiring this company is also in our
best interest because this company is very profitable with sales increasing
every year as well as net profit margin. Alpha Pro Tech is also debt free and
has almost $9 million in cash available as per most recent financial report.
The share price of the company has been increasing every year since 2012. The
company has also been buying back shares thus decreasing its shares outstanding
by 7 million shares. Which is another good sign of the business’ profitability.            Alpha Pro Tech is a great opportunity
for Western Structures and its shareholders to acquire for future success for
growing as well as diversifying its business Please review my recommendation
and let me know if you are in agreement or if you need any further information
so that we may proceed with the acquisition.               References  APT : Summary for Alpha Pro
Tech, Ltd. (2017, December 10). Retrieved December 10, 2017, from https://ca.finance.yahoo.com/quote/APT?p=APT This is one special stock we’re not giving up
on. (2017, July 11). Retrieved December 10, 2017, from https://www.theglobeandmail.com/globe-investor/inside-the-market/contra-guys-catching-the-upside-on-alpha-pro-tech/article35645686/ G. (2017, November 08). Alpha Pro Tech, Ltd.
Announces Financial Results For The Third Quarter. Retrieved December 10, 2017,
from https://www.thestreet.com/story/14382331/1/alpha-pro-tech-ltd-announces-financial-results-for-the-third-quarter.html Alpha Pro Tech Ltd (APT) Company Profile.
(n.d.). Retrieved December 10, 2017, from https://www.reuters.com/finance/stocks/companyProfile/APT