What changed in this filing

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Item 1. Financial Statements

2025-11-06 compared with 2025-08-07 · 114 added, 83 removed, 305 unchanged (39% of the section changed)

1 unchanged sentence

Condensed Consolidated Balance Sheets (Unaudited)

September 30,

Current assets:

2 unchanged sentences

Accounts receivable, related party

Inventories, net

Inventory, net

Prepaid expenses

16 unchanged sentences

50,000,000 shares authorized;

10,414,365 and 10,816,878 shares outstanding as of June 30, 2025 and December 31, 2024, respectively

10,284,565 and 10,816,878 shares outstanding as of September 30, 2025 and December 31, 2024, respectively

Additional paid-in capital

8 unchanged sentences

For the Three Months Ended

For the Six Months Ended

For the Nine Months Ended

September 30,

Cost of goods sold, excluding depreciation and amortization

6 unchanged sentences

Equity in income of unconsolidated affiliate

Gain on sale of asset

Interest income, net

10 unchanged sentences

For the Three Months Ended

For the Six Months Ended

Other comprehensive income - foreign currency translation loss

For the Nine Months Ended

September 30,

Other comprehensive income - foreign currency translation gain (loss)

Comprehensive income

2 unchanged sentences

Condensed Consolidated Statements of Shareholders ’ Equity (Unaudited)

For the Six Months Ended June 30, 2025

For the Nine Months Ended September 30, 2025

Comprehensive

11 unchanged sentences

Balance as of June 30, 2025

For the Six Months Ended June 30, 2024

Common stock repurchased and retired

Treasury stock excise tax

Stock-based compensation expense

Other comprehensive loss

Balance as of September 30, 2025

For the Nine Months Ended September 30, 2024

Comprehensive

12 unchanged sentences

Balance as of June 30, 2024

Common stock repurchased and retired

Treasury stock excise tax

Stock-based compensation expense

Options exercised

Other comprehensive income

Balance as of September 30, 2024

See accompanying Notes to Condensed Consolidated Financial Statements (Unaudited).

1 unchanged sentence

Condensed Consolidated Statements of Cash Flows (Unaudited)

For the Six Months Ended June 30,

For the Nine Months Ended

September 30,

Cash Flows From Operating Activities:

3 unchanged sentences

Equity in income of unconsolidated affiliate

Gain on sale of asset

Non-cash lease expense

2 unchanged sentences

Accounts receivable, related party

Inventories, net

Inventory, net

Prepaid expenses

1 unchanged sentence

Lease liabilities

Net cash and cash equivalents used in operating activities

Net cash and cash equivalents provided by operating activities

Cash Flows From Investing Activities:

Purchases of property and equipment

Proceeds from sale of asset

Net cash and cash equivalents used in investing activities

Cash Flows From Financing Activities:

24 unchanged sentences

The interim condensed consolidated financial statements should be read in conjunction with the Company’s current year SEC filings, as well as the Company’s consolidated financial statements for the year ended December 31, 2024, which are included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 (the “2024 Form 10-K”), filed with the SEC on March 12, 2025.

The results of operations for the three and six months ended June 30, 2025, in this Quarterly Report on Form 10-Q are not necessarily indicative of the results to be expected for the full year.

The results of operations for the three and nine months ended September 30, 2025, in this Quarterly Report on Form 10-Q are not necessarily indicative of the results to be expected for the full year.

The condensed consolidated balance sheet as of December 31, 2024 was prepared using information from the audited consolidated balance sheet contained in the 2024 Form 10-K;

14 unchanged sentences

The Company manufactures certain private label goods for customers and has determined that control does not pass to the customer at the time of manufacture, based upon the nature of the private labeling.

The Company has determined as of June 30, 2025, that it had no material contract assets, and concluded that its contract liabilities (primarily rebates) had the right of offset against customer receivables.

The Company has determined as of September 30, 2025, that it had no material contract assets, and concluded that its contract liabilities (primarily rebates) had the right of offset against customer receivables.

See Note 10 and Note 11 of these Notes to Condensed Consolidated Financial Statements (Unaudited) for information on revenue disaggregated by type and by geographic region.

3 unchanged sentences

Repurchase Program

During the three months ended June 30, 2025, the Company repurchased and retired 181,100 shares of its common stock for $ 830,000 .

During the three months ended June 30, 2024, the Company repurchased and retired 245,000 shares of its common stock for $ 1,284,000 .

During the six months ended June 30, 2025, the Company repurchased and retired 402,513 shares of its common stock for $ 2,008,000 .

During the six months ended June 30, 2024, the Company repurchased and retired 515,000 shares of its common stock for $ 2,701,000 .

As of June 30, 2025, the Company had $ 2,735,000 available to repurchase common shares under the repurchase program.

During the three months ended September 30, 2025, the Company repurchased and retired 129,800 shares of its common stock for $ 624,000 .

During the three months ended September 30, 2024, the Company repurchased and retired 180,000 shares of its common stock for $ 1,030,000 .

During the nine months ended September 30, 2025, the Company repurchased and retired 532,313 shares of its common stock for $ 2,632,000 .

During the nine months ended September 30, 2024, the Company repurchased and retired 695,000 shares of its common stock for $ 3,731,000 .

As of September 30, 2025, the Company had $ 2,111,000 available to repurchase common shares under the repurchase program.

The excess of repurchase price over par value is allocated between additional paid-in capital and retained earnings.

Option Activity

The Company previously granted stock options to employees and non-employee directors under the 2004 Stock Option Plan (the “2004 Plan”).

Options vest and expire according to terms established at the grant date.

The 2004 Plan provided for a total of 5,000,000 common shares eligible for issuance.

Under the 2004 Plan, approximately 5,009,750 options (taking into account cancelled, forfeited, and expired options that were added back to the plan reserve) had been granted as of December 31, 2020.

At the Company’s 2020 Annual Meeting of Shareholders held on June 9, 2020, the Company’s shareholders approved the Alpha Pro Tech, Ltd.

1 unchanged sentence

The 2020 Incentive Plan provides for the grant of incentive and nonqualified stock options, stock appreciation rights, awards of restricted stock and restricted stock units, performance share awards, cash awards and other equity-based awards to employees (including officers), consultants and non-employee directors of the Company and its affiliates.

A total of 1,800,000 shares of the Company’s common stock are reserved for issuance under the 2020 Incentive Plan, plus the number of shares underlying any award granted under the 2004 Option Plan that expires or is cancelled or forfeited under the terms of the 2004 Option Plan.

As a result of the approval of the 2020 Incentive Plan, no future equity awards will be made pursuant to the 2004 Option Plan.

Although no new awards may be granted under the 2004 Option Plan, all previously granted awards under the 2004 Option Plan will continue to be governed by the terms of the 2004 Option Plan.

A total of 1,800,000 shares of the Company’s common stock are reserved for issuance under the 2020 Incentive Plan.

The Company records compensation expense for the fair value of stock-based awards determined as of the grant date, including employee stock options, restricted stock, and restricted stock units (“RSUs”), over the determined requisite service period, which is generally ratably over the vesting term.

The following table summarizes RSUs awards activity for the six months ended June 30, 2025:

The following table summarizes RSUs awards activity for the nine months ended September 30, 2025:

Weighted Average

2 unchanged sentences

Granted to employees and non-employee directors

Outstanding, June 30, 2025

Outstanding, September 30, 2025

Alpha Pro Tech, Ltd.

Notes to Condensed Consolidated Financial Statements (Unaudited)

During the six months ended June 30, 2025 and 2024, 9,870 and 10,715 RSUs were granted under the 2020 Incentive Plan, respectively.

The Company recognized $ 243,000 and $ 189,000 in stock-based compensation expense associated with outstanding RSUs for the six months ended June 30, 2025 and 2024, respectively.

As of June 30, 2025, $ 453,000 of total unrecognized compensation cost related to the RSU grants was expected to be recognized over a weighted average remainder period of 1.13 years.

During the nine months ended September 30, 2025 and 2024, 32,330 and 29,675 RSUs were granted under the 2020 Incentive Plan, respectively.

The Company recognized $ 364,000 and $ 283,000 in stock-based compensation expense associated with outstanding RSUs for the nine months ended September 30, 2025 and 2024, respectively.

As of September 30, 2025, $ 332,000 of total unrecognized compensation cost related to the RSU grants was expected to be recognized over a weighted average remainder period of 0.98 years.

The Company uses the Black-Scholes option-pricing model to value the options.

4 unchanged sentences

The Company accounts for option forfeitures as they occur.

The following table summarizes option activity for the six months ended June 30, 2025:

The following table summarizes option activity for the nine months ended September 30, 2025:

Weighted Average

1 unchanged sentence

Options outstanding, December 31, 2024

Options outstanding, June 30, 2025

Options exercisable, June 30, 2025

As of June 30, 2025, $ 59,000 of total unrecognized compensation cost related to the stock option grants was expected to be recognized over a weighted average remainder period of 1.17 years.

Options outstanding, September 30, 2025

Options exercisable, September 30, 2025

As of September 30, 2025, $ 45,000 of total unrecognized compensation cost related to the stock option grants was expected to be recognized over a weighted average remainder period of 0.99 years.

Recent Accounting Pronouncements

10 unchanged sentences

Management has not identified any other new standards that it believes merit further discussion at this time.

Alpha Pro Tech, Ltd.

Notes to Condensed Consolidated Financial Statements (Unaudited)

As of June 30, 2025 and December 31, 2024, inventories net of reserves consisted of the following:

As of September 30, 2025 and December 31, 2024, inventory net of reserves consisted of the following:

September 30,

Raw materials

1 unchanged sentence

Finished goods

Alpha Pro Tech, Ltd.

Notes to Condensed Consolidated Financial Statements (Unaudited)

Equity Investment in Unconsolidated Affiliate

19 unchanged sentences

The Company periodically reviews its investment in Harmony for impairment.

Management has determined that no impairment was required as of June 30, 2025, or December 31, 2024.

Management has determined that no impairment was required as of September 30, 2025, or December 31, 2024.

Under the equity method, since the Company’s reporting currency is different from of Harmony’s reporting currency, the Company is required to translate our proportionate share of equity for effects of translations in foreign currency and adjust the investment accordingly and accrue the adjustment as a component of Accumulated other comprehensive loss (“AOCL”).

For the three months ended June 30, 2025 and 2024, the Company purchased $ 5,159,000 and $ 5,849,000 of inventories, respectively, from Harmony.

For the six months ended June 30, 2025 and 2024, the Company purchased $ 9,914,000 and $ 11,179,000 of inventories, respectively, from Harmony.

For the three months ended June 30, 2025 and 2024, the Company sold $ 415,000 and $ 240,000 of inventories, respectively, to Harmony.

For the six months ended June 30, 2025 and 2024, the Company sold $ 415,000 and $ 240,000 of inventories, respectively, to Harmony.

For the three months ended June 30, 2025 and 2024, the Company recorded equity in income of unconsolidated affiliate of $ 137,000 and $ 200,000 , respectively, related to Harmony.

For the six months ended June 30, 2025 and 2024, the Company recorded equity in income of unconsolidated affiliate of $ 278,000 and $ 338,000 , respectively, related to Harmony.

For the three months ended September 30, 2025 and 2024, the Company purchased $ 5,723,000 and $ 5,465,000 of inventory, respectively, from Harmony.

For the nine months ended September 30, 2025 and 2024, the Company purchased $ 15,637,000 and $ 16,644,000 of inventory, respectively, from Harmony.

For the three months ended September 30, 2025 and 2024, the Company sold $ 213,000 and $ 61,000 of inventory, respectively, to Harmony.

For the nine months ended September 30, 2025 and 2024, the Company sold $ 628,000 and $ 301,000 of inventory, respectively, to Harmony.

For the three months ended September 30, 2025 and 2024, the Company recorded equity in income of unconsolidated affiliate of $ 27,000 and $ 97,000 , respectively, related to Harmony.

For the nine months ended September 30, 2025 and 2024, the Company recorded equity in income of unconsolidated affiliate of $ 305,000 and $ 435,000 , respectively, related to Harmony.

As of September 30, 2025, the Company’s investment in Harmony was $ 5,842,000 , which consisted of its original $ 1,450,000 investment and cumulative equity in income of unconsolidated affiliate of $ 7,186,000 , less $ 942,000 in repayments of an advance, $ 77,000 in payments of dividends, and $ 1,775,000 in AOCL on foreign currency translations.

Alpha Pro Tech, Ltd.

Notes to Condensed Consolidated Financial Statements (Unaudited)

As of June 30, 2025, the Company’s investment in Harmony was $ 6,005,000 , which consisted of its original $ 1,450,000 investment and cumulative equity in income of unconsolidated affiliate of $ 7,160,000 , less $ 942,000 in repayments of an advance, $ 77,000 in payments of dividends, and $ 1,586,000 in AOCL on foreign currency translations.

Accrued Liabilities

As of June 30, 2025 and December 31, 2024, accrued liabilities consisted of the following:

As of September 30, 2025 and December 31, 2024, accrued liabilities consisted of the following:

September 30,

Payroll expenses and taxes payable

2 unchanged sentences

Basic and Diluted Earnings Per Common Share

The following table provides a reconciliation of both net income and the number of shares used in the computation of “basic” earnings per common share (“EPS”), which utilizes the weighted average number of common shares outstanding without regard to dilutive shares, and “diluted” EPS, which includes all such dilutive shares, for the three and six months ended June 30, 2025 and 2024:

For the Three Months Ended

For the Six Months Ended

For the Nine Months Ended

September 30,

Net income (numerator)

7 unchanged sentences

The resulting foreign currency translation gains or losses are deferred as AOCL and reclassified to earnings only upon sale or liquidation of that business.

The AOCL on equity in unconsolidated affiliate was $ 1,586,000 and $ 1,499,000 as of June 30, 2025 and December 31, 2024, respectively.

Alpha Pro Tech, Ltd.

Notes to Condensed Consolidated Financial Statements (Unaudited)

The AOCL on equity in unconsolidated affiliate was $ 1,775,000 and $ 1,499,000 as of September 30, 2025 and December 31, 2024, respectively.

Segments Reporting

6 unchanged sentences

A portion of the Company’s equity in income of unconsolidated affiliate (Harmony) is included in the total segment income for the Disposable Protective Apparel segment.

Alpha Pro Tech, Ltd.

Notes to Condensed Consolidated Financial Statements (Unaudited)

The chief operating decision maker (“CODM”) of the Company is the Company’s chief executive officer .

5 unchanged sentences

For the Three Months Ended

For the Six Months Ended

June 30, 2025

For the Nine Months Ended

September 30, 2025

Building Supply

7 unchanged sentences

Segment net income

Alpha Pro Tech, Ltd.

Notes to Condensed Consolidated Financial Statements (Unaudited)

For the Three Months Ended

For the Six Months Ended

June 30, 2024

For the Nine Months Ended

September 30, 2024

Building Supply

7 unchanged sentences

Segment net income

Alpha Pro Tech, Ltd.

Notes to Condensed Consolidated Financial Statements (Unaudited)

The following table presents consolidated net sales for each segment for the three and six months ended June 30, 2025 and 2024:

The following table presents consolidated net sales for each segment for the three and nine months ended September 30, 2025 and 2024:

For the Three Months Ended

For the Six Months Ended

For the Nine Months Ended

September 30,

Building Supply

1 unchanged sentence

Consolidated net sales

The following table presents the reconciliation of consolidated segment net income to consolidated net income for the three and six months ended June 30, 2025 and 2024:

The following table presents the reconciliation of consolidated segment net income to consolidated net income for the three and nine months ended September 30, 2025 and 2024:

For the Three Months Ended

For the Six Months Ended

For the Nine Months Ended

September 30,

Building Supply

4 unchanged sentences

Consolidated net income

The following table presents the consolidated net property and equipment, goodwill and definite-lived intangible assets (“consolidated assets”) by segment as of June 30, 2025 and December 31, 2024:

Alpha Pro Tech, Ltd.

Notes to Condensed Consolidated Financial Statements (Unaudited)

The following table presents the consolidated net property and equipment, goodwill and definite-lived intangible assets (“consolidated assets”) by segment as of September 30, 2025 and December 31, 2024:

September 30,

Building Supply

3 unchanged sentences

Total consolidated assets

Alpha Pro Tech, Ltd.

Notes to Condensed Consolidated Financial Statements (Unaudited)

Financial Information about Geographic Areas

The following table summarizes the Company’s net sales by geographic region for the three and six months ended June 30, 2025 and 2024:

The following table summarizes the Company’s net sales by geographic region for the three and nine months ended September 30, 2025 and 2024:

For the Three Months Ended

For the Six Months Ended

For the Nine Months Ended

September 30,

Net sales by geographic region

3 unchanged sentences

Net sales by geographic region are based on the countries in which our customers are located.

For the three and six months ended June 30, 2025 and 2024, the Company did not generate sales from any single country, other than the United States, that were significant to the Company’s consolidated net sales.

The following table summarizes the locations of the Company’s long-lived assets by geographic region as of June 30, 2025 and December 31, 2024:

For the three and nine months ended September 30, 2025 and 2024, the Company did not generate sales from any single country, other than the United States, that were significant to the Company’s consolidated net sales.

The following table summarizes the locations of the Company’s long-lived assets by geographic region as of September 30, 2025 and December 31, 2024:

September 30,

Long-lived assets by geographic region

2 unchanged sentences

Consolidated total long-lived assets

Alpha Pro Tech, Ltd.

Notes to Condensed Consolidated Financial Statements (Unaudited)

Related Party Transactions

As of June 30, 2025, the Company had no related party transactions, other than the Company’s transactions with its unconsolidated affiliate, Harmony.

As of September 30, 2025, the Company had no related party transactions, other than the Company’s transactions with its unconsolidated affiliate, Harmony.

See Note 6 of these Notes to Condensed Consolidated Financial Statements (Unaudited).

The Company has operating leases for the Company’s corporate office and manufacturing facilities, which expire at various dates through 2034.

The Company’s primary operating lease commitments as of June 30, 2025, related to the Company’s manufacturing facilities in Valdosta, Georgia and Nogales, Arizona, as well as the Company’s corporate headquarters in Aurora, Ontario, Canada.

As of June 30, 2025, the Company had operating lease right-of-use assets of $ 8,252,000 and operating lease liabilities of $ 8,340,000 .

As of June 30, 2025, we did not have any finance leases recorded on the Company’s consolidated balance sheet.

Operating lease expense was approximately $ 760,000 during the six months ended June 30, 2025.

The aggregate future minimum lease payments and reconciliation to lease liabilities as of June 30, 2025 were as follows:

Remaining six months of 2025

The Company’s primary operating lease commitments as of September 30, 2025, related to the Company’s manufacturing facilities in Valdosta, Georgia and Nogales, Arizona, as well as the Company’s corporate headquarters in Aurora, Ontario, Canada.

Alpha Pro Tech, Ltd.

Notes to Condensed Consolidated Financial Statements (Unaudited)

As of September 30, 2025, the Company had operating lease right-of-use assets of $ 8,016,000 and operating lease liabilities of $ 8,105,000 .

As of September 30, 2025, we did not have any finance leases recorded on the Company’s consolidated balance sheet.

Operating lease expense was approximately $ 1,132,000 during the nine months ended September 30, 2025.

The aggregate future minimum lease payments and reconciliation to lease liabilities as of September 30, 2025 were as follows:

September 30,

Remaining three months of 2025

Total future minimum lease payments

1 unchanged sentence

Total lease liabilities

As of June 30, 2025, the weighted average remaining lease term of the Company’s operating leases was 9.72 years.

During the six months ended June 30, 2025, the weighted average discount rate with respect to these leases was 7.0 %.

Alpha Pro Tech, Ltd.

Notes to Condensed Consolidated Financial Statements (Unaudited)

As of September 30, 2025, the weighted average remaining lease term of the Company’s operating leases was 9.57 years.

During the nine months ended September 30, 2025, the weighted average discount rate with respect to these leases was 7.0 %.

The Company accounts for income taxes using the asset and liability method.

5 unchanged sentences

federal jurisdiction, and in various state and foreign jurisdictions.

On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) was enacted.

Key income tax-related provisions of the OBBBA include the repeal of mandatory capitalization of domestic research and development expenditures under Internal Revenue Code (IRC) Section 174 (reinstating full expensing beginning in 2025), extension of bonus depreciation, and revisions to international tax regimes.

The company recognized the income tax effects of the OBBBA in its third quarter 2025 financial statements.

An employer generally does not claim a corporate income tax deduction (which would be in an amount equal to the amount of income recognized by the employee) upon the exercise of its employee's incentive stock options (“ISOs”) unless the employee does not meet the holding period requirements and sells early, making a disqualifying disposition, or if the options otherwise do not qualify as ISOs under applicable tax laws.

3 unchanged sentences

Although it is not possible to determine with certainty at this point in time what liability, if any, the Company will have as a result of such litigation, based on consultation with legal counsel, management does not anticipate that the ultimate liability, if any, resulting from such litigation will have a material effect on the Company’s financial condition and results of operations.

Alpha Pro Tech, Ltd.

Notes to Condensed Consolidated Financial Statements (Unaudited)

Subsequent Events

The Company has reviewed and evaluated whether subsequent events have occurred from the condensed consolidated balance sheet date of June 30, 2025 through the filing date of this Quarterly Report on Form 10-Q that would require recognition or disclosure and has concluded that there are no such subsequent events.

The Company has reviewed and evaluated whether subsequent events have occurred from the condensed consolidated balance sheet date of September 30, 2025 through the filing date of this Quarterly Report on Form 10-Q that would require recognition or disclosure and has concluded that there are no such subsequent events.

Alpha Pro Tech, Ltd.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements