Company: APT
Filing Date: 2025-08-07
Form Type: 10-Q
Source: 0001437749-25-025400
Chunk: 39

Company: ALPHA PRO TECH LTD
Filing Date: 2025-08-07
Form: 10-Q
Item: Part I, Item 2
Chunk 39
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. Gross profit margin in the Disposable Protective Apparel segment in 2025 was lower compared to the 2024 margin, which was higher than historical margins. In addition, gross profit margin has been negatively affected in 2025, primarily by higher sales rebates, ocean freight rates and to a lesser degree US tariffs. Management will be increasing selling prices starting in July 2025 to partially mitigate the impact of the new 2025 US tariffs, but it is expected that tariffs will have a negative effect on gross profit.

20

Alpha Pro Tech, Ltd.

Selling, General and Administrative Expenses. Selling, general and administrative expenses decreased by $328,000, or 6.7%, to $4,556,000 for the three months ended June 30, 2025, from $4,884,000 for the three months ended June 30, 2024. As a percentage of net sales, selling, general and administrative expenses decreased to 27.3% for the three months ended June 30, 2025, from 30.0% for the same period of 2024.

The change in expenses by segment for the three months ended June 30, 2025, was as follows: Building Supply expenses were down by $21,000, or 1.2%; Disposable Protective Apparel expenses were down by $85,000, or 6.1%; and corporate unallocated expenses were down by $222,000, or 12.9%.

The decrease in the Building Supply segment expenses was primarily related to decreased employee compensation and marketing expenses, partially offset by increased sales travel expenses. The increase in the Disposable Protective Apparel segment expenses was primarily related to increased employee compensation, marketing and sales travel expenses. The decrease in corporate unallocated expenses was primarily due to decreased professional fees, insurance expenses, general office expenses, and reorganization costs in the three months ended June 30, 2025 compared to the same period of 2024. The reorganization costs in 2024 were incurred in connection with moving our face mask manufacturing facility from Utah to Arizona.

Selling, general and administrative expenses decreased by $482,000, or 5.0%, to $9,250,000 for the six months ended June 30, 2025, from $9,732,000 for the six months ended June 30, 2024. As a percentage of net sales, selling, general and administrative expenses decreased to 30.3% for the six months ended