Company: APT
Filing Date: 2025-05-08
Form Type: 10-Q
Source: 0001437749-25-015457
Chunk: 28

Company: ALPHA PRO TECH LTD
Filing Date: 2025-05-08
Form: 10-Q
Item: Part I, Item 2
Chunk 28
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, medical device manufacturing, lab animal research, and high technology electronics manufacturing (which includes the semi-conductor market); and medical and dental distributors.

Our products are used primarily in cleanrooms, industrial safety manufacturing environments, health care facilities, such as hospitals, laboratories and dental offices, and building and re-roofing sites. Our products are distributed principally in the United States through a network consisting of purchasing groups, national distributors, local distributors, independent sales representatives and our own sales and marketing force.

15

Alpha Pro Tech, Ltd.

Recent developments in U. S. trade policy have introduced uncertainty regarding the future of global trade relations. Following the inauguration of the second Trump administration, there have been numerous announcements made and actions taken related to tariff increases and other trade restrictions regarding imports into the U. S. President Trump has indicated that his administration is likely to impose significant tariffs on imported goods, including a 145% tariff on Chinese imports, a tariff on goods from Mexico and up to 10% or 20% on all other U. S. imports, including tariffs of 10% on products we import from India. Given that we currently source very little from China, this may be a benefit in regards to our competition that does import from China, but any new or increased tariffs, quotas, embargoes, or other trade barriers affecting other countries from which we do source supplies or our global network of third-party suppliers could impact our supply chain and cost structure. Additionally, retaliatory measures by affected countries could further disrupt our operations or reduce our competitiveness in international markets. An escalation in trade tensions or the implementation of broader tariffs, trade restrictions or retaliatory measures on our products or components originating from countries outside the U. S. could adversely impact our ability to source necessary components, manufacture products at competitive cost, or sell our products at prices customers are willing to pay. Any such developments could materially and adversely affect our business operations, results of operations and cash flows. We continue to monitor these changing tariffs and trade restrictions. If new tariffs or trade restrictions are imposed, we may need to adjust our pricing, increase inventory levels, or seek alternative suppliers, any of which could materially affect our revenue, gross margins, and overall financial performance.

RESULTS OF OPERATIONS

The following table sets forth certain operational data as a percentage of net sales for the periods indicated:

                                                    For the Three Months             
                                                                                     
                                                         Ended March 31,             
                                                                    2025             
 ─────────────────────────────────────────────────────────────────────────────────────
  Net sales