Company: APT
Filing Date: 2025-08-07
Form Type: 10-Q
Source: 0001437749-25-025400
Chunk: 16

Company: ALPHA PRO TECH LTD
Filing Date: 2025-08-07
Form: 10-Q
Item: Part I, Item 1
Chunk 16
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 be applied to certain products from Mexico, Vietnam, India, Canada, Sri Lanka, and China, among other countries. The current tariffs, especially those imposed on imports from India and Sri Lanka, have increased the costs of certain products sourced from non-U. S. countries. Sales of certain of our products, for example, disposable protective garments, have experienced volatility in demand related to customers securing high order rates in prior periods, only to enter a period of destocking in more recent periods. This significant level of volatility in demand levels, input and transportation costs, and material and labor availability, have pressured our ability to operate efficiently in recent periods. We will continue to take actions to mitigate such impacts, including implementing commercial pricing adjustments, holding extra inventories, resourcing to alternate suppliers and insourcing of previously sourced products. Although we believe we generally may be able to mitigate the impact of higher commodity costs over time, we may experience additional material costs and disruptions in supply in the future and may not be able to pass along higher costs to our customers in the form of price increases or otherwise mitigate the impacts to our operating results.

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                 For the Six Months             
                                                                                                                              
                                                                      June 30,                     Ended June 30,             
                                                                          2025                               2025             
 ──────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────
  Net sales                                                              100.0      100