**SECURITIES AND EXCHANGE COMMISSION**

 

**WASHINGTON, D.C.20549**

 

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**FORM 10-Q**

 

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**Quarterly Report pursuant to section 13 or 15(d)of the Securities Exchange Act of 1934**

 

| **For the Quarter Ended June 30, 2003** |   | **Commission File No. 0-19893** |
|-----------------------------------------|--------|---------------------------------|

 

**Alpha Pro Tech, Ltd.**

(exact name of registrant as specified in its charter)

 

| **Delaware, U.S.A.**                                                                |   | **63-1009183**                       |
|-------------------------------------------------------------------------------------|--------|--------------------------------------|
| (State or other jurisdiction of incorporation)                                      |   | (I.R.S. Employer Identification No.) |
|                                                                                |   |                                 |
| **Suite 112, 60 Centurian Drive  Markham, Ontario, Canada**                         |   | **L3R 9R2**                          |
| (Address of principal executive offices)                                            |   | (Zip Code)                           |
|                                                                                |   |                                 |
| Registrant’s  telephone number, including area code:   **(905) 479-0654** |

 

Indicate by check mark whetherthe registrant (1) has filed all reports required to be filed by section 13 or15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (orfor such shorter period that the registrant was required to file such reports)and (2) has been subject to such filing requirements for the past 90 days.

 

Yes  ý  No  o

 

Indicate the number of sharesoutstanding of each of the issuer’s classes of common stock, as of July29,2003.

 

| Common  stock, $.01 par value |   | 22,436,907 |
|-------------------------------|--------|------------|

 

 

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**Alpha Pro Tech, Ltd.**

 

Table of Contents

 
| PART I.  FINANCIAL INFORMATION                                                                       |
|-----------------------------------------------------------------------------------------------------------|
|                                                                                                      |
| ITEM 1  Consolidated Financial Statements  (Unaudited)                                               |
|                                                                                                      |
|                                                                                                      | a) | Consolidated Balance Sheets -  June 30, 2003 (unaudited) and December 31, 2002 |
|                                                                                                      |   |   |
|                                                                                                      | b) | Consolidated Statements of Operations  for the three and six months ended June 30, 2003 (unaudited)  and June 30, 2002 (unaudited) |
|                                                                                                      |   |   |
|                                                                                                      | c) | Consolidated Statement of Shareholder’s  Equity  for the six months ended June 30, 2003 (unaudited) |
|                                                                                                      |   |   |
|                                                                                                      | d) | Consolidated Statements of Cash Flows  for the six months ended June 30, 2003 (unaudited)  and June 30, 2002 (unaudited) |
|                                                                                                      |   |   |
|                                                                                                      | e) | Notes to Consolidated Financial Statements  (unaudited) |
|                                                                                                      |   |
| Cautionary Statements Regarding  Forward-Looking Information                                              |
|                                                                                                      |   |
| Additional Information                                                                                    |
|                                                                                                      |   |
| ITEM 2   Management’s Discussion and Analysis of Financial Condition and  Results of Operations |
|                                                                                                      |   |
| ITEM 3   Quantitative and Qualitative Disclosures About Market Risk                                  |
|                                                                                                      |   |
| ITEM 4  Controls and  Procedures                                                                     |
|                                                                                                      |   |
|                                                                                                      |   |
| PART II.  OTHER INFORMATION                                                                          |
|                                                                                                      |
| ITEM 5   Submission of Matters to a Vote Security Holders                                            |
|                                                                                                      |   |
| ITEM 6   Exhibits and Reports on Form 8-K                                                            |
|                                                                                                      |   |
| SIGNATURES                                                                                                |
|                                                                                                      |   |
| CERTIFICATIONS                                                                                            |
|                                                                                                      |   |
| EXHIBITS                                                                                                  |
|                                                                                                      |   |
|                                                                                                      | Exhibit  32.1:  Certification by CEO (filed  herewith) |
|                                                                                                      |   |
|                                                                                                      | Exhibit  32.2:  Certification by CFO (filed  herewith) |

 

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**AlphaPro Tech, Ltd.**

 

**ConsolidatedBalance Sheets**

** **
|                                                                                                                                                  |   | **June 30,  2003** |       | **December  31,  2002** |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------|------------|-------------------------|--------|
|                                                                                                                                                  |   | **(Unaudited)**    |       |                    |   |
| **Assets**                                                                                                                                            |   |               |       |                    |   |
| Current assets:                                                                                                                                       |   |               |       |                    |   |
| Cash                                                                                                                                                  |   | $                  | 2,216,000  |                    | $      | 2,879,000 |   |
| Accounts receivable, net of allowance for  doubtful accounts of $55,000 and $37,000 at June 30, 2003 and  December 31, 2002            |   | 4,819,000          |       | 2,286,000               |   |
| Inventories, net                                                                                                                                      |   | 4,588,000          |       | 3,358,000               |   |
| Prepaid expenses and other current assets                                                                                                             |   | 374,000            |       | 334,000                 |   |
| Deferred income taxes                                                                                                                                 |   | 365,000            |       | 365,000                 |   |
| Total current assets                                                                                                                                  |   | 12,362,000         |       | 9,222,000               |   |
|                                                                                                                                                  |   |               |       |                    |   |
| Property and equipment, net                                                                                                                           |   | 3,296,000          |       | 3,283,000               |   |
| Intangible assets, net                                                                                                                                |   | 176,000            |       | 179,000                 |   |
| Notes receivable and other assets                                                                                                                     |   | —             |       | 91,000                  |   |
|                                                                                                                                                  |   | $                  | 15,834,000 |                    | $      | 12,775,000 |   |
|                                                                                                                                                  |   |               |       |                    |   |
| **Liabilities and Shareholders’ Equity**                                                                                                         |   |               |       |                    |   |
| Current liabilities:                                                                                                                                  |   |               |       |                    |   |
| Accounts payable                                                                                                                                      |   | $                  | 2,112,000  |                    | $      | 453,000 |   |
| Accrued liabilities                                                                                                                                   |   | 1,758,000          |       | 1,592,000               |   |
| Notes payable, current portion                                                                                                                        |   | —             |       | 127,000                 |   |
| Total current liabilities                                                                                                                             |   | 3,870,000          |       | 2,172,000               |   |
|                                                                                                                                                  |   |               |       |                    |   |
| Notes payable, less current portion                                                                                                                   |   | —             |       | 288,000                 |   |
| Deferred income taxes                                                                                                                                 |   | 541,000            |       | 541,000                 |   |
| Total liabilities                                                                                                                                     |   | 4,411,000          |       | 3,001,000               |   |
|                                                                                                                                                  |   |               |       |                    |   |
| Shareholders’ Equity                                                                                                                             |   |               |       |                    |   |
| Common stock, $.01 par value, 50,000,000  shares authorized, 22,436,907 and 22,625,907 issued and outstanding at June  30, 2003 and December 31, 2002 |   | 224,000            |       | 226,000                 |   |
| Additional paid-in capital                                                                                                                            |   | 22,956,000         |       | 23,134,000              |   |
| Accumulated deficit                                                                                                                                   |   | (11,757,000        | )          | (13,586,000             | )      |
| Total shareholders’ equity                                                                                                                       |   | 11,423,000         |       | 9,774,000               |   |
|                                                                                                                                                  |   | $                  | 15,834,000 |                    | $      | 12,775,000 |   |

 

The accompanying notes are anintegral part of these consolidated financial statements.

 

1

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**AlphaPro Tech, Ltd.**

 

**ConsolidatedStatements of Operations (Unaudited)**

 
|                                                        |   | **For the  Three Months Ended  June 30,** |      | **For the Six  Months Ended  June 30,** |   |
|-------------------------------------------------------------|--------|-------------------------------------------|-----------|-----------------------------------------|--------|
|                                                        |   | **2003**                                  |      | **2002**                                |   | **2003** |   | **2002** |   |
|                                                        |   |                                      |      |                                    |   |   |   |   |   |
| Sales                                                       |   | $                                         | 8,707,000 |                                    | $      | 5,805,000 |   | $ | 13,951,000 |   | $ | 11,008,000 |   |
|                                                        |   |                                      |      |                                    |   |   |   |   |   |
| Cost of goods sold, excluding depreciation and amortization |   | 3,931,000                                 |      | 2,734,000                               |   | 6,449,000 |   | 5,512,000 |   |
|                                                        |   |                                      |      |                                    |   |   |   |   |   |
| Gross margin                                                |   | 4,776,000                                 |      | 3,071,000                               |   | 7,502,000 |   | 5,496,000 |   |
|                                                        |   |                                      |      |                                    |   |   |   |   |   |
| Expenses:                                                   |   |                                      |      |                                    |   |   |   |   |   |
| Selling, general and administrative                         |   | 2,418,000                                 |      | 1,951,000                               |   | 4,285,000 |   | 3,609,000 |   |
| Depreciation and amortization                               |   | 123,000                                   |      | 110,000                                 |   | 243,000 |   | 218,000 |   |
|                                                        |   |                                      |      |                                    |   |   |   |   |   |
| Income from operations                                      |   | 2,235,000                                 |      | 1,010,000                               |   | 2,974,000 |   | 1,669,000 |   |
|                                                        |   |                                      |      |                                    |   |   |   |   |   |
| Interest, net                                               |   | 17,000                                    |      | 9,000                                   |   | 16,000 |   | 19,000 |   |
|                                                        |   |                                      |      |                                    |   |   |   |   |   |
| Income before provision for income taxes                    |   | 2,218,000                                 |      | 1,001,000                               |   | 2,958,000 |   | 1,650,000 |   |
|                                                        |   |                                      |      |                                    |   |   |   |   |   |
| Provision for income taxes                                  |   | 854,000                                   |      | 333,000                                 |   | 1,129,000 |   | 561,000 |   |
|                                                        |   |                                      |      |                                    |   |   |   |   |   |
| Net income                                                  |   | $                                         | 1,364,000 |                                    | $      | 668,000 |   | $ | 1,829,000 |   | $ | 1,089,000 |   |
|                                                        |   |                                      |      |                                    |   |   |   |   |   |
| Basic net income per share                                  |   | $                                         | 0.06      |                                    | $      | 0.03 |   | $ | 0.08 |   | $ | 0.05 |   |
|                                                        |   |                                      |      |                                    |   |   |   |   |   |
| Diluted net income per share                                |   | $                                         | 0.06      |                                    | $      | 0.03 |   | $ | 0.08 |   | $ | 0.05 |   |
|                                                        |   |                                      |      |                                    |   |   |   |   |   |
| Basic weighted average shares outstanding                   |   | 22,398,063                                |      | 23,495,569                              |   | 22,430,679 |   | 23,521,047 |   |
|                                                        |   |                                      |      |                                    |   |   |   |   |   |
| Diluted weighted average shares outstanding                 |   | 24,557,002                                |      | 24,216,059                              |   | 23,766,151 |   | 24,197,643 |   |

 

The accompanying notes are anintegral part of these consolidated financial statements.

 

2

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**AlphaPro Tech, Ltd.**

 

**ConsolidatedStatement of Shareholders’ Equity (Unaudited)**

** **
|                                   |   | **Shares** |   | **Common  Stock** |    | **Additional  Paid-in Capital** |   | **Accumulated  Deficit** |   | **Total** |        |
|----------------------------------------|--------|------------|--------|-------------------|---------|---------------------------------|--------|--------------------------|--------|-----------|-------------|
|                                   |   |       |   |              |    |                            |   |                     |   |      |        |
| Balance at December 31, 2002 |   | 22,625,907 |   | $                 | 226,000 |                            | $      | 23,134,000               |   | $         | (13,586,000 | ) | $ | 9,774,000 |   |
|                                   |   |       |   |              |    |                            |   |                     |   |      |        |
| Issuance of common stock               |   | 101,000    |   | 1,000             |    | 93,000                          |   |                     |   | 94,000    |        |
|                                   |   |       |   |              |    |                            |   |                     |   |      |        |
| Repurchase of common stock             |   | (290,000   | )      | (3,000            | )       | (271,000                        | )      |                     |   | (274,000  | )           |
|                                   |   |       |   |              |    |                            |   |                     |   |      |        |
| Net income                             |   |       |   |              |    |                            |   | 1,829,000                |   | 1,829,000 |        |
|                                   |   |       |   |              |    |                            |   |                     |   |      |        |
| Balance at June 30, 2003     |   | 22,436,907 |   | $                 | 224,000 |                            | $      | 22,956,000               |   | $         | (11,757,000 | ) | $ | 11,423,000 |   |

 

The accompanying notes are anintegral part of these consolidated financial statements

 

3

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**AlphaPro Tech, Ltd.**

 

**ConsolidatedStatements of Cash Flows (Unaudited)**

 
|                                                                               |   | **For the  Six Months Ended  June 30,** |      |
|------------------------------------------------------------------------------------|--------|-----------------------------------------|-----------|
|                                                                               |   | **2003**                                |      | **2002** |   |
| **Cash Flows From Operating Activities:**                                          |   |                                    |      |   |   |
| Net income                                                                         |   | $                                       | 1,829,000 |   | $ | 1,089,000 |   |
| Adjustments to reconcile net income to net  cash provided by operating activities: |   |                                    |      |   |   |
| Depreciation and amortization                                                      |   | 243,000                                 |      | 218,000 |   |
|                                                                               |   |                                    |      |   |   |
| Changes in assets and liabilities:                                                 |   |                                    |      |   |   |
| Accounts receivable, net                                                           |   | (2,533,000                              | )         | (510,000 | ) |
| Inventories, net                                                                   |   | (1,230,000                              | )         | (676,000 | ) |
| Prepaid expenses and other assets                                                  |   | (19,000                                 | )         | (178,000 | ) |
| Accounts payable and accrued liabilities                                           |   | 1,825,000                               |      | 567,000 |   |
|                                                                               |   |                                    |      |   |   |
| Net cash provided by operating activities:                                         |   | 115,000                                 |      | 510,000 |   |
|                                                                               |   |                                    |      |   |   |
| **Cash Flows From Investing Activities:**                                          |   |                                    |      |   |   |
| Purchase of property and equipment                                                 |   | (245,000                                | )         | (100,000 | ) |
| Purchase of intangible assets                                                      |   | (8,000                                  | )         | (8,000 | ) |
|                                                                               |   |                                    |      |   |   |
| Net cash used in investing activities                                              |   | (253,000                                | )         | (108,000 | ) |
|                                                                               |   |                                    |      |   |   |
| **Cash Flows From Financing Activities:**                                          |   |                                    |      |   |   |
| Payments from notes payable                                                        |   | —                                  |      | 219,000 |   |
| Payments on notes payable                                                          |   | (415,000                                | )         | (536,000 | ) |
| Proceeds from notes receivable                                                     |   | 70,000                                  |      | — |   |
| Principal payments on capital leases                                               |   | —                                  |      | (6,000 | ) |
| Proceeds from issuance of common stock                                             |   | 94,000                                  |      | — |   |
| Repurchase of common stock                                                         |   | (274,000                                | )         | (215,000 | ) |
| Net cash used in financing activities                                              |   | (525,000                                | )         | (538,000 | ) |
|                                                                               |   |                                    |      |   |   |
| Decrease in cash during the period                                                 |   | (663,000                                | )         | (136,000 | ) |
|                                                                               |   |                                    |      |   |   |
| Cash, beginning of period                                                          |   | 2,879,000                               |      | 1,372,000 |   |
| Cash, end of period                                                                |   | $                                       | 2,216,000 |   | $ | 1,236,000 |   |

 

The accompanying notes are an integral part of these consolidatedfinancial statements.

 

4

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**AlphaPro Tech, Ltd.**

 

**Notesto Consolidated Financial Statements (Unaudited)**

 

**1.****                                      TheCompany**

 

Alpha Pro Tech, Ltd. (the “Company”) manufactures and distributes avariety of disposable mask, shield, shoe cover, apparel and wound careproducts.  Most of the Company’sdisposable apparel, mask and shield products, and wound care products aredistributed to medical, dental, industrial safety and clean room markets,predominantly in the United States of America.

 

**2.****                                      Basisof Presentation**

 

The accompanying consolidated financialstatements are unaudited but, in the opinion of management, contain all theadjustments (consisting of those of a normal recurring nature) considerednecessary to present fairly the financial position, results of operations andcash flows for the periods presented in conformity with accounting principlesgenerally accepted in the United States of America.  The accompanying consolidated financial statements should be readin conjunction with the Company’s Form 10-K for the year ended December 31,2002.

 

There havebeen no significant changes since December 31, 2002 in accounting principlesand practices utilized in the preparation of these consolidated financialstatements.

 

Certain 2002balances have been reclassified to conform to the current periodpresentation.  These reclassificationshad no effect on net income, total assets or liabilities.

 

**3.****                                      StockBased Compensation**

 

Accounting for Stock-based Compensation.  The Company maintains a stock option planunder which the Company may grant incentive stock options and non-qualifiedstock options to employees and non-employee directors.  Stock options have been granted withexercise prices at or above the fair market value on the date of grant.  Options vest and expire according to termsestablished at the grant date.

 

SFAS No. 123,Accounting for Stock-Based Compensation, encourages, but does not require,companies to record compensation cost for stock-based employee compensationplans based on the fair market value of options granted.  The Company has chosen to account forstock-based compensation using the intrinsic value method prescribed inAccounting Principles Board (“APB”) Opinion No. 25, Accounting for Stock Issuedto Employees, and related interpretations. Accordingly, because the grant price equals the market price on the dateof grant for options issued by the Company, no compensation expense isrecognized for stock options issued to employees.

 

On December31, 2002, the Financial Accounting Standards Board (“FASB”) issued SFASNo. 148, Accounting for Stock-Based Compensation Transition andDisclosure, which amends SFAS No. 123. SFAS No. 148 requires more prominent and frequent disclosures about theeffects of stock-based compensation, which the Company has elected toadopt.  The Company will continue toaccount for its stock-based compensation according to the provisions of APBOpinion No. 25.

 

5

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Hadcompensation cost for the Company’s stock options been recognized based uponthe estimated fair value on the grant date under the fair value methodologyprescribed by SFAS No. 123, as amended by SFAS No. 148, the Company’s netearnings and earnings per share would have been as follows :

 
|                                                                                                                                               |   | **For the  Three Months Ended  June 30,** |      | **For the  Six Months Ended  June 30,** |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------|-----------|-----------------------------------------|--------|
|                                                                                                                                               |   | **2003**                                  |      | **2002**                                |   | **2003** |   | **2002** |   |
| Net income as reported                                                                                                                             |   | $                                         | 1,364,000 |                                    | $      | 668,000 |   | $ | 1,829,000 |   | $ | 1,089,000 |   |
| Add:   Stock based employee compensation expense included in reported net  income, net of related tax effects                                 |   | —                                    |      | —                                  |   | — |   | — |   |
|                                                                                                                                               |   |                                      |      |                                    |   |   |   |   |   |
| Deduct:   Total stock-based employee compensation expense determined using the  fair value method for all rewards, net of related tax effects |   | —                                    |      | —                                  |   | — |   | (95,000 | ) |
|                                                                                                                                               |   |                                      |      |                                    |   |   |   |   |   |
| Pro forma net income                                                                                                                               |   | $                                         | 1,364,000 |                                    | $      | 668,000 |   | $ | 1,829,000 |   | $ | 994,000 |   |
|                                                                                                                                               |   |                                      |      |                                    |   |   |   |   |   |
| Net income per share:                                                                                                                              |   |                                      |      |                                    |   |   |   |   |   |
| Basic - as reported                                                                                                                                |   | $                                         | 0.06      |                                    | $      | 0.03 |   | $ | 0.08 |   | $ | 0.05 |   |
| Basic - pro forma                                                                                                                                  |   | 0.06                                      |      | 0.03                                    |   | 0.08 |   | 0.04 |   |
| Diluted - as reported                                                                                                                              |   | 0.06                                      |      | 0.03                                    |   | 0.08 |   | 0.05 |   |
| Diluted - pro forma                                                                                                                                |   | 0.06                                      |      | 0.03                                    |   | 0.08 |   | 0.04 |   |

 

**4.****                                     ****New Accounting Standards**

 

Based on theCompany’s review of new accounting standards released during the three monthsended June 30, 2003, the Company did not identify any standards requiringadoption that would have a significant impact on its financial statements forthe periods reported.

 

**5.****                                      Inventories**

** **
|                          |   | **June 30,  2003** |      | **December  31,  2002** |   |
|-------------------------------|--------|--------------------|-----------|-------------------------|--------|
|                          |   |               |      |                    |   |
| Raw materials                 |   | $                  | 2,752,000 |                    | $      | 1,751,000 |   |
| Work in process               |   | 140,000            |      | 85,000                  |   |
| Finished goods                |   | 2,071,000          |      | 1,854,000               |   |
|                          |   | 4,963,000          |      | 3,690,000               |   |
| Less reserve for obsolescence |   | (375,000           | )         | (332,000                | )      |
|                          |   | $                  | 4,588,000 |                    | $      | 3,358,000 |   |

 

6

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**6.****                                      AccruedLiabilities**

 
|                      |   | **June 30,  2003** |      | **December  31,  2002** |   |
|---------------------------|--------|--------------------|-----------|-------------------------|--------|
|                      |   |               |      |                    |   |
| Income taxes payable      |   | $                  | 817,000   |                    | $      | 745,000 |   |
| Commission payable        |   | 411,000            |      | 444,000                 |   |
| Payroll and payroll taxes |   | 179,000            |      | 135,000                 |   |
| Accrued rebates and other |   | 351,000            |      | 268,000                 |   |
|                      |   | $                  | 1,758,000 |                    | $      | 1,592,000 |   |

 

**7.****                                      Basicand Diluted Net Income Per Share**

 

The followingtable provides a reconciliation of both the net income and the number of sharesused in the computation of “basic” EPS, which utilizes the weighted averagenumber of shares outstanding without regard to potential shares, and “diluted”EPS, which includes all such shares.

 
|                                                |   | **For the  Three Months Ended  June 30,** |      | **For the  Six Months Ended  June 30,** |   |
|-----------------------------------------------------|--------|-------------------------------------------|-----------|-----------------------------------------|--------|
|                                                |   | **2003**                                  |      | **2002**                                |   | **2003** |   | **2002** |   |
|                                                |   |                                      |      |                                    |   |   |   |   |   |
| Net income   (Numerator)                       |   | $                                         | 1,364,000 |                                    | $      | 668,000 |   | $ | 1,829,000 |   | $ | 1,089,000 |   |
|                                                |   |                                      |      |                                    |   |   |   |   |   |
| Shares (Denominator):                               |   |                                      |      |                                    |   |   |   |   |   |
|                                                |   |                                      |      |                                    |   |   |   |   |   |
| Basic weighted average shares outstanding           |   | 22,398,063                                |      | 23,495,569                              |   | 22,430,679 |   | 23,521,047 |   |
|                                                |   |                                      |      |                                    |   |   |   |   |   |
| Add: Dilutive effect of stock options and  warrants |   | 21,182,181                                |      | 720,490                                 |   | 1,347,093 |   | 676,596 |   |
|                                                |   |                                      |      |                                    |   |   |   |   |   |
| Diluted weighted average shares outstanding         |   | 24,580,244                                |      | 24,216,059                              |   | 23,777,772 |   | 24,197,643 |   |
|                                                |   |                                      |      |                                    |   |   |   |   |   |
| Net income   per share:                        |   |                                      |      |                                    |   |   |   |   |   |
|                                                |   |                                      |      |                                    |   |   |   |   |   |
| Basic                                               |   | $                                         | 0.06      |                                    | $      | 0.03 |   | $ | 0.08 |   | $ | 0.05 |   |
|                                                |   |                                      |      |                                    |   |   |   |   |   |
| Diluted                                             |   | $                                         | 0.06      |                                    | $      | 0.03 |   | $ | 0.08 |   | $ | 0.05 |   |

 

7

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**8.****                                      Activityof Business Segments**

 

The Companyclassifies its businesses into three fundamental segments:  Apparel, consisting of a complete line ofdisposable clothing such as coveralls, frocks, lab coats, hoods, bouffant capsand shoe covers; Mask and eye shields, consisting principally of medical,dental and industrial masks and eye shields; and Extended Care UnrealLambskin®, consisting principally of fleece and other related products whichincludes a line of pet beds.

 

The accountingpolicies of the segments are the same as those described in the “Summary ofSignificant Accounting Policies in the Company’s Form 10-K for the year endedDecember 31, 2002.”  Segment dataexcludes charges allocated to head office and corporate sales/marketingdepartments.  The Company evaluates theperformance of its segments and allocates resources to them based primarily onnet sales.

 

The following table shows net sales for eachsegment for the three and six months ended June 30, 2003 and 2002:

 
|                         |   | **For the  Three Months Ended  June 30,** |       | **For the  Six Months Ended  June 30,** |       |
|------------------------------|--------|-------------------------------------------|------------|-----------------------------------------|------------|
|                         |   | **2003**                                  |       | **2002**                                |       | **2003** |   | **2002** |   |
|                         |   |                                      | ** ** |                                    | ** ** |   | ** ** |   | ** ** |
| Apparel                      |   | $                                         | 3,920,000  |                                    | $          | 4,180,000 |   | $ | 7,345,000 |   | $ | 7,566,000 |   |
| Mask and eye shield          |   | 4,462,000                                 |       | 1,260,000                               |       | 5,769,000 |   | 2,481,000 |   |
| Extended care                |   | 325,000                                   |       | 365,000                                 |       | 837,000 |   | 961,000 |   |
|                         |   |                                      |       |                                    |       |   |   |   |   |
| Consolidated total net sales |   | $                                         | 8,707,000  |                                    | $          | 5,805,000 |   | $ | 13,951,000 |   | $ | 11,008,000 |   |

 

A reconciliation of total segment income tototal consolidated net income for the three and six months ended June 30, 2003and 2002 is presented below:

 
|                                    |   | **For the  Three Months Ended  June 30,** |       | **For the  Six Months Ended  June 30,** |       |
|-----------------------------------------|--------|-------------------------------------------|------------|-----------------------------------------|------------|
|                                    |   | **2003**                                  |       | **2002**                                |       | **2003** |   | **2002** |   |
|                                    |   |                                      | ** ** |                                    | ** ** |   | ** ** |   | ** ** |
| Apparel                                 |   | $                                         | 1,252,000  |                                    | $          | 1,475,000 |   | $ | 2,261,000 |   | $ | 2,453,000 |   |
| Mask and Shield                         |   | 2,482,000                                 |       | 484,000                                 |       | 3,027,000 |   | 845,000 |   |
| Fleece                                  |   | 30,000                                    |       | 47,000                                  |       | 135,000 |   | 196,000 |   |
|                                    |   |                                      |       |                                    |       |   |   |   |   |
| Total segment income                    |   | 3,764,000                                 |       | 2,006,000                               |       | 5,423,000 |   | 3,494,000 |   |
| Unallocated corporate overhead expenses |   | (1,546,000                                | )          | (1,005,000                              | )          | (2,465,000 | ) | (1,844,000 | ) |
| Provision for income taxes              |   | (854,000                                  | )          | (333,000                                | )          | (1,129,000 | ) | (561,000 | ) |
|                                    |   |                                      |       |                                    |       |   |   |   |   |
| Consolidated net income                 |   | $                                         | 1,364,000  |                                    | $          | 668,000 |   | $ | 1,829,000 |   | $ | 1,089,000 |   |

 

8

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**CAUTIONARYSTATEMENTS REGARDING FORWARD-LOOKING INFORMATION**

 

This Quarterly Report on Form10-Q contains forward-looking statements that are made pursuant to the SafeHarbor provisions of the Private Securities Litigation Reform Act of 1995.Forward-looking statements involve risks, uncertainties and assumptions asdescribed from time to time in registration statements, annual reports andother periodic reports and filings of the Company filed with the Securities andExchange Commission. All statements, other than statements of  historical facts, which address theCompany’s expectations of sources of capital or which express the Company’sexpectation for the future with respect to financial performance or operatingstrategies, can be identified as forward-looking statements. As a result, therecan be no assurance that the Company’s future results will not be materiallydifferent from those described herein as “believed,” “anticipated,” “estimated”or “expected,” which reflect the current views of the Company with respect tofuture events. We caution readers that these forward-looking statements speakonly as of the date hereof. The Company hereby expressly disclaims anyobligation or undertaking to release publicly any updates or revisions to anysuch statements to reflect any change in the Company’s expectations or anychange in events, conditions or circumstances on which such statement is based.

 

**ADDITIONAL INFORMATION**

 

We make available free ofcharge on or through our Internet website our annual reports on Form 10-K,quarterly reports on Form 10-Q, current reports on Form 8-K and amendments tothose reports filed or furnished pursuant to Section 13(a) or 15(d) of theExchange Act as soon as reasonably practicable after we electronically filesuch material with, or furnish it to, the Securities and Exchange Commission

 

9

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**ITEM2.****                                                     MANAGEMENT’SDISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS**

 

You should read the followingdiscussion and analysis together with our consolidated financial statements andthe notes to our consolidated financial statements, which appear elsewhere inthis report.

 

**OVERVIEW**

 

Alpha Pro Tech is in thebusiness of protecting people, products and environments. We accomplish this bydeveloping, manufacturing and marketing a line of disposable protective appareland consumer products for the cleanroom, industrial, medical, dental andconsumer markets.  Our products areprimarily sold under the “Alpha Pro Tech” brand name, but are also sold for useunder private label.

 

Our products are classifiedinto four groups:  Disposable protectiveapparel, consisting of a complete line of shoecovers, headcovers, gowns,coveralls and labcoats; infection control products consisting of a line of facemasks and face shields; extended care products consisting of a line of mattressoverlays, wheelchair covers, geriatric chair surfaces, operating room tablesurfaces and pediatric surfaces; and consumer products consisting of a line ofpet bedding and pet toys.  Ourproducts  are sold through threesegments.  The Apparel segment,consisting of disposable protective apparel; the Mask and /Shield segment,consisting of infection control products; and the Extended Care segment,consisting of extended care products and consumer products.

 

As part of our currentstrategy, emphasis is being placed on developing innovative products and wehave recently implemented an initiative in conjunction with our distributors tocommunicate directly with the end customers, a move which we believe will notonly increase brand loyalty, but will allow the Company to properly allocatevaluable research and development dollars for products the end user trulywants.

 

Our target markets arepharmaceutical manufacturing, bio-pharmaceutical manufacturing and medicaldevice manufacturing, lab animal research, high technology electronicsmanufacturing which includes the semi-conductor market, as well as medical anddental distributors. Our products are used primarily in cleanrooms, industrialsafety manufacturing environments, health care facilities such as hospitals,laboratories and dental offices. Our products are distributed principally inthe United States through a network consisting of purchasing groups, nationaldistributors, local distributors, independent sales representatives and our ownsales and marketing force.

 

Our results of operations forthe three months and six months ended June 30, 2003 were significantlyinfluenced by the recent outbreak of Severe Acute Respiratory Syndrome(“SARS”).

 

On April 9, 2003 we announcedthat the demand for our N-95 Particulate Respirator face mask had dramaticallyincreased in response to the SARS outbreak. The N-95 mask is the mask recommended by the Center for Disease Controland Prevention.  Subsequently, theCenter for Disease Control recommended an N-95 respirator mask be used togetherwith an eye shield to protect healthcare workers in the fight against thespread of the SARS virus.

 

In the second quarter of 2003,we dramatically increased production of the N-95 mask to help meet theincreased demand.  In addition, newproduction lines were on target to be operational by July 1st, whichwill double N-95 production capacity and additional production lines will beadded if required., While it’s important to understand that we are not acompany focused on SARS, we have significantly increased our manufacturingcapacity with minimal capital expenditures in the event that future outbreaksoccur.

 

10

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During the second quarter of2003, we had approximately $3 million of SARS related N-95 Mask and eye shieldsales, which accounted for approximately one-third of our revenue base duringthe quarter. While mask sales in China have decreased significantly since June30, 2003, sales have continued in the Toronto area as the utilization of thesemasks is increasingly become standard practice in hospitals and otherhealthcare facilities.  We anticipatethat an estimated $1.0 million in revenues will be derived from SARS relatedsales in the third quarter of 2003.  Todate, an additional $0.9 million of orders has been put on hold and the balanceof the SARS related orders have been cancelled. While we cannot predict theoutcome of the SARS virus in the future, the World Health Organization (WHO)has stated that they are uncertain if the virus is seasonal and whether it may,or may not resurface later this year.

 

**RESULTSOF OPERATIONS**

 

**Three months and sixmonths ended June 30, 2003, compared to the three months and six months endedJune 30, 2002**

 

Alpha Pro Tech, Ltd. (“Alpha”or the “Company”) reported net income for the quarter ended June 30, 2003 of$1,364,000 as compared to $668,000 for the quarter ended June 30, 2002,representing an increase of $696,000 or 104.2%.  The increase is attributable to an increase in income beforeprovision for income taxes of $1,217,000, partially offset by an increase inincome taxes of $521,000.

 

**Sales.**   Consolidated sales for the quarter endedJune 30, 2003 increased to a record $8,707,000 from $5,805,000 for the quarterended June 30, 2002, representing an increase of $2,902,000 or 50.0%.  The Company attributes the record sales toan approximate $3 million increase in sales for the N-95 Particulate Respiratormask, as well as an increase in eye shield products in response to the outbreakof SARS.  While SARS related sales have decreased significantly since June30, 2003, especially in China, sales of N-95 masks are expected to be strongerthan normal throughout the rest of 2003. In addition to SARS related business, sales of disposable protectiveapparel to the Pharmaceutical industry and sales of masks to the Dentalmarket improved in the second quarter of 2003 as compared to the same quarterlast year.  Weak economic conditions,primarily in the Semiconductor clean room market, continue to adversely impactsales.

 

Sales for the Apparel Divisionfor the quarter ended June 30, 2003 were $3,920,000 as compared to $4,180,000for the same period of 2002.  TheApparel Division sales decrease of $260,000 or 6.2% was due to decreased salesin the Industrial Safety and Clean Room industry which includes theSemiconductor market, partially offset by improved sales to the Pharmaceuticalindustry.  The Company began servicingthe Pharmaceutical industry in 2002, and management expects continued growth inthis market segment.  Apparel sales arestill being negatively impacted by the continued weakness in the Semiconductorclean room market.  The Company does notexpect a recovery in the Semiconductor clean room market until at least 2004.

 

Mask and eye shield salesincreased by $3,202,000 or 254.1% to $4,462,000 in 2003 from $1,260,000 in2002.  The increase is primarily theresult of an increase in N-95 mask and eye shield sales in relation to SARS aswell as an increase in dental mask sales. While SARS related sales have decreased significantly since the end ofthe second quarter, the Company anticipates stronger than normal demand for theN-95 Particulate Respirator mask for the remainder of 2003 due to an increasedawareness of infection control precautions.

 

Sales from the Company’sExtended Care Unreal Lambskin and other related products, which includes a lineof pet beds, decreased by $40,000 or 11.0% to $325,000 for the quarter endedJune 30, 2003 from $365,000 for the quarter ended June 30, 2002.  The decrease of $40,000 in sales isprimarily the result of a decrease in medical bed pad sales.

 

11

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Consolidated sales were$13,951,000 and $11,008,000 for the six months ended June 30, 2003 and 2002respectively, representing an increase of $2,943,000 or 26.7%.

 

Apparel sales for the sixmonths ended June 30, 2003 were $7,345,000 as compared to $7,566,000 for thesame period of 2002, a decrease of $221,000 or 2.9%. The decrease is due tolower sales in the Industrial Safety/Clean-Room industry and Semiconductormarket, partially offset by improved sales to the Pharmaceutical industry

 

Mask and eye shield salesincreased by $3,288,000 or 132.5% to $5,769,000 for the six months ended June30, 2003 from $2,481,000 in the same period of 2002.  The increase is primarily the result of an increase in N-95 maskand eye shield sales in relation to SARS, as well as an increase in dental masksales.

 

Sales from the Company’sExtended Care Unreal Lambskinâand other related products decreased by $124,000 or 12.9% to $837,000 for thesix months ended June 30, 2003 compared to $961,000 in the same period in2002.  The decrease in sales isprimarily the result of a decrease in pet bed products.

 

**Cost of Goods Sold.**   Cost of goods sold, excluding depreciationand amortization, increased to $3,931,000 for the quarter ended June 30, 2003from $2,734,000 for the same period in 2002. Gross profit margin increased to 54.9% for the quarter ended June 30,2003 from 52.9% for the same period in 2002. For the six months ended June, 2003 as compared to 2002, cost of goodssold increased to $6,449,000 from $5,512,000. Gross profit margin increased to 53.8% from 49.9% for the six monthsended June 30, 2003 and 2002,

 

The increase in gross profitmargin for the three and six months ended June 30, 2003 as compared to the sameperiod in 2002 is due to an increase in the amount of products beingmanufactured in China and a greater percentage of mask and eye shield saleswhich yield higher gross profit margins.

 

Management expects that grossprofit margin should continue to be strong for the balance of 2003.

 

**Selling,General and Administrative Expenses.**   Selling,general and administrative expenses increased by $467,000 or 23.9% to$2,418,000 for the quarter ended June 30, 2003 from $1,951,000 for the quarterended June 30, 2002.  As a percentage ofnet sales, selling, general and administrative expenses decreased to 27.8% inthe quarter ended June 30, 2003 from 33.6% for the same period in 2002.  The increase in selling, general andadministrative expenses primarily consists of increased payroll related costsof $333,000, increased travel, marketing and commission expenses of $84,000,increased foreign exchange expense of $43,000, increased credit card processingexpense of $13,000, increased telecommunication and insurance expense of$15,000 and increased miscellaneous expenses of $8,000, partially offset bydecreased professional fees and public company expenses of $15,000 anddecreased rent and utilities expense of $15,000.

 

Selling, general andadministrative expenses increased by $676,000 or 18.7%, to $4,285,000 for thesix months ended June 30, 2003 from $3,609,000 for the six months ended June30, 2002. As a percentage of net sales, selling, general and administrativeexpenses decreased to 30.7% for the six months ended June 30, 2003 from 32.8%in the same period of 2002.  Theincrease in selling, general and administrative expenses primarily consists of increasedpayroll related costs of $480,000, increased travel, marketing and commissionexpenses of $128,000, increased professional fees and public company expensesof $31,000, increased foreign exchange expense of $45,000, increased creditcard processing expense of $16,000 and increased telecommunication andinsurance expense of $16,000, partially offset by decreased rent and utilitiesof $38,000 and decreased miscellaneous expenses of $2,000

 

12

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The increase in both payrolland travel related costs are largely due to the addition of sales and marketingpersonnel.  The Company has increasedthe sales and marketing and customer service team by 5 people to 22 people atJune 30, 2003 as compared to 17 people at June 30, 2002.  Management anticipates that the addition ofthese personnel will yield improved sales results in the coming quarters.  The increase in payroll related costs isalso due to an increase in the accrual for the executive bonus program which isequal to 10% of the pre-tax profits of the company.

 

**Depreciation and Amortization.**   Depreciation and amortization expenseincreased by $13,000 to $123,000 for the quarter ended June 30, 2003 from$110,000 for the same period in 2002 and increased by $25,000 to $243,000 from$218,000 for the six months ended June 30, 2003 compared to the same period in2002.  The increase is primarilyattributable to mask machine and shoecover machine additions in the first quarterof 2003 and the purchase of computer equipment.

 

**Income from Operations.**   Income from operations increased by$1,225,000 or 121.3%, to $2,235,000 for the quarter ended June 30, 2003 ascompared to income from operations of $1,010,000 for the quarter ended June 30,2002.  The increase in income fromoperations is due to an increase in gross profit of $1,705,000, partiallyoffset by an increase in selling, general and administrative expenses of$467,000, and an increase in depreciation and amortization of $13,000.  The increase in income from operations isprimarily attributable to the SARS related N-95 mask and eye shield sales.

 

Income from operations increased by $1,305,000 or 78.2% to $2,974,000for the six months ended June 30, 2003 as compared to income from operations of$1,669,000 for the six months ended June 30, 2002.  The increase in income from operations is due to an increase ingross profit of $2,006,000, partially offset by an increase in selling, generaland administrative expenses of $676,000, and an increase in depreciation and amortizationof $25,000.

 

**Net Interest.**   Net interest expense increased by $8,000 to$17,000 for the quarter ended June 30, 2003 from net interest expense of $9,000for the quarter ended June 30, 2002. The increase in net interest expense is primarily due to additionalinterest charges for paying off all our notes payable during the secondquarter.  The Company is debt free as ofJune 30, 2003.  Interest incomedecreased by $3,000, to $1,000 for the quarter ended June 30, 2003 from $4,000in the same period of 2002.

 

Net interest expense decreased by $3,000 to $16,000 for the six monthsended June 30, 2003 from $19,000 for the six months ended June 30, 2002.  The decrease in net interest expense isprimarily due to increased interest income. Interest income increased by $4,000to $12,000 for the six months ended June 30, 2003 from $8,000 in the sameperiod of 2002 due to higher invested balances.

 

**Income Before Provision for Income Taxes.**   Income before provision for income taxesfor the quarter ended June 30, 2003 was $2,218,000 as compared to $1,001,000for the quarter ended June 30, 2002, representing an increase of $1,217,000 or121.6%.  This increase is attributableprimarily to an increase in gross profit of $1,705,000 partially offset by anincrease in selling, general and administrative expenses of $467,000 anincrease in depreciation and amortization of $13,000 and an increase in netinterest expense of $8,000.

 

Income before provision for income taxes for the six months ended June30, 2003 was $2,958,000 as compared to $1,650,000 for the six months ended June30, 2002, representing an increase of $1,308,000 or 79.3%.  This increase is attributable primarily toan increase in gross profit of $2,006,000 and a decrease in net interestexpense of $3,000, partially offset by an increase in selling, general andadministrative expenses of $676,000 and an increase in depreciation andamortization of $25,000.

 

13

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**Provision for Income Taxes **The provision forincome taxes for the three and six months June 30, 2003 was $854,000 and$1,129,000, as compared to $333,000 and $561,000 for the three and six monthsended June 30, 2002.  The increase inincome taxes is due to higher income before provision for income taxes in2003.  The effective tax rate isapproximately 38% in 2003 compared to 34% in 2002.  The increase in effective tax rate is due primarily to theinclusion of state tax accruals.

 

**Net Income.**  Net income for the quarter ended June 30,2003 was $1,364,000 compared to net income of $668,000 for the quarter endedJune 30, 2002, an increase of $696,000 or 104.2%.  The net income increase of $696,000 is comprised of an increasein income from operations of $1,225,000, partially offset by an increase in netinterest expense of $8,000 and an increase in income taxes of $521,000.

 

Net income for the six months ended June 30, 2002 was $1,829,000compared to net income of $1,089,000 for the six months ended June 30, 2002, anincrease of $740,000 or 68.0%.  The net incomeincrease of $740,000 is comprised of an increase in income from operations of$1,305,000 and a decrease in net interest expense of $3,000 partially offset byan increase in the provision for income taxes of $568,000.

 

14

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**LIQUIDITY AND CAPITALRESOURCES**

 

As of June 30, 2003, theCompany had cash of $2,216,000 and working capital of $8,492,000, an increaseof $1,442,000 since December 31, 2002. During the quarter ended June 30, 2003, cash decreased by $663,000.  The decrease in the Company’s cash isprimarily due to the purchase of property and equipment, payments on notespayable and the repurchase of common stock,, partially offset by cash providedby operating activities and cash proceeds from the exercise of stock options.

 

The Company has a $3,500,000credit facility with a bank, consisting of a line of credit with interest atprime plus 0.5%.  At June 30, 2003, theprime interest rate was 4.00%.  The lineof credit expires in May 2004.  At June30, 2003, the Company’s borrowing capacity on the line of credit was $3,187,000which is based on a formula of accounts receivable and inventory.  At June 30, 2003, the Company had notborrowed on its line of credit.  Inaddition, during the quarter ended June 30, 2003 the Company paid off  the $370,000 balance remaining on itsequipment loans.  As of June 30, 2003,the Company does not have any debt.

 

As shown below, at June 30,2003, our contractual cash obligations totaled approximately $961,000.

 

**Contractual Obligations**

 
|                               |   | **Payments Due by Period** |    |
|------------------------------------|--------|----------------------------|---------|
|                               |   | **Total**                  |    | **Less than 1  Year** |   | **1-3 Years** |   | **4-5 Years** |   | **After 5 years** |   |
|                               |   |                       |    |   |   |   |   |   |   |   |   |
| Operating leases                   |   | $                          | 961,000 |   | $ | 293,000 |   | $ | 663,000 |   | $ | 5,000 |   | $ | — |   |
| Line of credit (1)                 |   | —                     |    | — |   | — |   | — |   | — |   |
|                               |   |                       |    |   |   |   |   |   |   |   |   |
| Total contractual cash obligations |   | $                          | 961,000 |   | $ | 293,000 |   | $ | 663,000 |   | $ | 5,000 |   | $ | — |   |

 

15

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Net cash provided by operatingactivities was $115,000 for the six months ended June 30, 2003.   The Company’s net cash provided byoperating activities of $115,000 for the six months ended June 30, 2003 isprimarily due to net income and an increase in accounts payable and accruedliabilities, partially offset by an increase in accounts receivable andinventories.  The net cash provided byoperating activities for the six months ended June 30, 2003 as compared to thesame period of 2002 decreased by $395,000 to $115,000 for the six months endedJune 30, 2003 as compared to the six months ended June 30, 2002.  The net change of $395,000 is primarily dueto a net increase in accounts receivable of $2,023,000 and a net increase ininventories of $554,000, partially offset by increased net income of $740,000and a net increase in accounts payable and accrued liabilities of $1,258,000and a net decrease in prepaid expenses and other assets of $159,000.

 

The Company’s investingactivities have consisted primarily of expenditures for property and equipmentof $245,000 for the six months ended June 30, 2003 compared to $100,000 for thesix months ended June 30, 2002.

 

The Company expects to purchase$100,000 of additional equipment in 2003.

 

In March 2003, the Companyannounced that its Board of Directors had approved the buy-back of up to anadditional $500,000 of the Company’s outstanding common stock.  This new share repurchase program is thefifth $500,000 buyback authorized by the Board of Directors.  In allinstances, the Company is retiring the shares. In the first quarter of 2003, the Company bought back a total of 290,000common shares at a cost of $274,000.  Noshares were repurchased during the second quarter of 2003.  As of June 30, 2003, the Company has boughtback a total of 2,098,800 common shares at a cost of $2,112,000 since the endof 1999.

 

During the six months endedJune 30, 2003, the Company’s cash used in financing activities resultedprimarily from payments on the Company’s notes payable of $415,000 and frompayments of $274,000 for the repurchase of common stock, partially offset bycash proceeds of $94,000 from the exercise of stock options.

 

The Company believes that cashgenerated from operations, its current cash balance and the funds availableunder its credit facility, will be sufficient to satisfy the Company’sprojected working capital and planned capital expenditures for the foreseeablefuture.

 

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**NEW ACCOUNTING STANDARDS**

 

Based on the Company’s reviewof new accounting standards released during the three months ended June 30,2003, the Company did not identify any standards requiring adoption that wouldhave a significant impact on its financial statements for the periods reported.

 

**ITEM3.                  QUANTITATIVE ANDQUALITATIVE DISCLOSURES ABOUT MARKET RISK**

 

We manufacture some products inMexico and subcontract the manufacture of some products in China.  The Company’s results of operations could benegatively effected by factors such as changes in foreign currency exchangerates due to stronger economic conditions in those countries.

 

The Company doesn’t expect anysignificant effect on its results of operations from inflationary or interestand currency rate fluctuations.  TheCompany does not hedge its interest rate or foreign exchange risks.

 

**ITEM 4****                                                        CONTROLS AND PROCEDURES**

 

Evaluation of Disclosure Controls andProcedures.

 

The Company’s chief executive officer and itschief financial officer, after evaluating the effectiveness of the Company’sdisclosure controls and procedures (as defined in Exchange Act Rules 13a-14(c)and 15d-14(c)) as of a date within 90 days of the filing date of the quarterlyreport (the “Evaluation Date”), have concluded that, as of the Evaluation Date,the Company’s disclosure controls and procedures were effective to ensure thatmaterial information related to the Company and its consolidated subsidiarieswould be made known to them by others within those entities. In designing andevaluating the disclosure controls and procedures, management recognized thatany controls and procedures, no matter how well designed and operated, canprovide only reasonable assurance of achieving the desired control objectives,and management necessarily was required to apply its judgment in evaluating andimplementing possible controls and procedures.

 

Changes in Internal Controls.

 

There have been no significant changes in theCompany’s internal controls or in other factors that could significantly affectthe Company’s internal controls subsequent to the Evaluation Date.

 

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**PARTII - OTHER INFORMATION**

 

Item 5   Submission of Mattersto a Vote of Security Holders

 

(a)                                  Registrant held its Annual Meeting ofShareholders May 30, 2003.

 

(b)                                 The following persons were elected Directorspursuant to the votes indicated:

 
| **Name**            |   | **For**    |   | **Withheld** |
|---------------------|--------|------------|--------|--------------|
|                |   |       |   |         |
| Sheldon Hoffman     |   | 18,624,987 |   | 48,936       |
|                |   |       |   |         |
| Alexander Millar    |   | 18,624,987 |   | 48,936       |
|                |   |       |   |         |
| Donald Bennett, Jr. |   | 18,624,787 |   | 49,136       |
|                |   |       |   |         |
| Robert Isaly        |   | 18,624,987 |   | 48,936       |
|                |   |       |   |         |
| John Ritota         |   | 18,624,987 |   | 48,936       |
|                |   |       |   |         |
| Russell Manock      |   | 18,624,987 |   | 48,936       |

 

(c)                                  The only other matter to be voted upon wasthe ratification of the appointment of PricewaterhouseCoopers LLP as theRegistrant’s independent accountants as follows:

 
| **For**    |   | **Against** |   | **Abstain** |
|------------|--------|-------------|--------|-------------|
|       |   |        |   |        |
| 18,623,102 |   | 39,800      |   | 11,021      |

 

**ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K**

 

(a)Exhibits

 

32.1Certification Pursuant to 18 U.S.C Section 1350, as Adopted Pursuant to Section906 of the Sarbanes-Oxley Act of 2002, Signed by Chief Executive Officer (filedherewith)

 

32.2Certification Pursuant to 18 U.S.C Section 1350, as Adopted Pursuant to Section906 of the Sarbanes-Oxley Act of 2002, Signed by Chief Financial Officer (filedherewith)

 

(b)Reports on Form 8-K

 

Noreports were filed on Form 8-K during the second quarter of 2003

 

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**SIGNATURES**

 

Pursuant to the requirements ofSection 13 or 15 (d) of the Securities Exchange Act of 1934, the Registrant hasduly caused this report to be signed on its behalf by the undersigned,thereunto duly authorized.

 
|   |          | Alpha Pro Tech, Ltd. |
|--------|---------------|----------------------|
|   |          |                 |   |
|   |          |                 |   |
| DATE:  | July 30, 2003 |                 | BY: | /S/Sheldon Hoffman |   |
|   |          |                 | SHELDON  HOFFMAN |
|   |          |                 | CHIEF  EXECUTIVE OFFICER |
|   |          |                 |   |
|   |          |                 |   |
|   |          | Alpha Pro Tech, Ltd. |
|   |          |                 |   |
|   |          |                 |   |
| DATE:  | July 30, 2003 |                 | BY: | /S/Lloyd Hoffman |   |
|   |          |                 | LLOYD  HOFFMAN |
|   |          |                 | CHIEF  FINANCIAL OFFICER |

 

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**CertificationUnder Exchange Act Rules 13a – 14 and 15d - 14**

 

I, Sheldon Hoffman, certifythat:

 

1.                                       I have reviewedthis quarterly report on Form 10-Q of Alpha Pro Tech, Ltd;

 

2.                                       Based on myknowledge, this quarterly report does not contain any untrue statement of amaterial fact or omit to state a material fact necessary to make the statementsmade, in light of the circumstances under which such statements were made, notmisleading with respect to the period covered by this quarterly report;

 

3.                                       Based on myknowledge, the financial statements, and other financial information includedin this quarterly report, fairly present in all material respects the financialcondition, results of operations and cash flows of the registrant as of, andfor, the periods presented in this quarterly report;

 

4.                                       The registrant’sother certifying officer and I are responsible for establishing and maintainingdisclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and15d-14) for the registrant and we have:

 

a)                                      designed suchdisclosure controls and procedures to ensure that material information relatingto the registrant, including its consolidated subsidiaries, is made known to usby others within those entities, particularly during the period in which thisquarterly report is being prepared;

 

b)                                     evaluated theeffectiveness of the registrant’s disclosure controls and procedures as of adate within 90 days prior to  the filingdate of this quarterly report (the “Evaluation Date”); and

 

c)                                      presented in thisquarterly report our conclusions about the effectiveness of the disclosurecontrols and procedures based on our evaluation as of the Evaluation Date;

 

5.                                       The registrant’sother certifying officer and I have disclosed, based on our most recentevaluation, to the registrant’s auditors and the audit committee ofregistrant’s board of directors (or persons performing the equivalentfunction):

 

a)                                      allsignificant deficiencies in the design or operation of internal controls whichcould adversely affect the registrant’s ability to record, process, summarizeand report financial data and have identified for the registrant’s auditors anymaterial weaknesses in internal controls; and

 

b)                                     anyfraud, whether or not material, that involves management or other employees whohave a significant role in the registrant’s internal controls; and

 

6.                                       The registrant’sother certifying officer and I have indicated in this quarterly report whetheror not there were significant changes in internal controls or in other factorsthat could significantly affect internal controls subsequent to the date of ourmost recent evaluation, including any corrective actions with regard tosignificant deficiencies and material weaknesses.

 

 
| DATE:  | July 30, 2003 |   | BY:                      | /S/Sheldon Hoffman |   |
|--------|---------------|--------|--------------------------|--------------------|--------|
|   |          |   | SHELDON  HOFFMAN         |
|   |          |   | CHIEF  EXECUTIVE OFFICER |

 

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**CertificationUnder Exchange Act Rules 13a – 14 and 15d - 14**

 

I, Lloyd Hoffman, certify that:

 

1.                                       I have reviewedthis quarterly report on Form 10-Q of Alpha Pro Tech, Ltd;

 

2.                                       Based on myknowledge, this quarterly report does not contain any untrue statement of amaterial fact or omit to state a material fact necessary to make the statementsmade, in light of the circumstances under which such statements were made, notmisleading with respect to the period covered by this quarterly report;

 

3.                                       Based on myknowledge, the financial statements, and other financial information includedin this quarterly report, fairly present in all material respects the financialcondition, results of operations and cash flows of the registrant as of, andfor, the periods presented in this quarterly report;

 

4.                                       The registrant’sother certifying officer and I are responsible for establishing and maintainingdisclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and15d-14) for the registrant and we have:

 

a)                                      designed suchdisclosure controls and procedures to ensure that material information relatingto the registrant, including its consolidated subsidiaries, is made known to usby others within those entities, particularly during the period in which thisquarterly report is being prepared;

 

b)                                     evaluated theeffectiveness of the registrant’s disclosure controls and procedures as of adate within  90 days prior to  the filing date of this quarterly report(the “Evaluation Date”); and

 

c)                                      presented in thisquarterly report our conclusions about the effectiveness of the disclosurecontrols and procedures based on our evaluation as of the Evaluation Date;

 

5.                                       The registrant’sother certifying officer and I have disclosed, based on our most recentevaluation, to the registrant’s auditors and the audit committee ofregistrant’s board of directors (or persons performing the equivalentfunction):

 

a)                                      all significantdeficiencies in the design or operation of internal controls which couldadversely affect the registrant’s ability to record, process, summarize andreport financial data and have identified for the registrant’s auditors anymaterial weaknesses in internal controls; and

 

b)                                     any fraud, whetheror not material, that involves management or other employees who have asignificant role in the registrant’s internal controls; and

 

6.                                       The registrant’sother certifying officer and I have indicated in this quarterly report whetheror not there were significant changes in internal controls or in other factorsthat could significantly affect internal controls subsequent to the date of ourmost recent evaluation, including any corrective actions with regard to significantdeficiencies and material weaknesses.

 

 
| DATE:  | July 30, 2003 |   | BY:                      | /S/Lloyd Hoffman |   |
|--------|---------------|--------|--------------------------|------------------|--------|
|   |          |   | LLOYD  HOFFMAN           |
|   |          |   | CHIEF  FINANCIAL OFFICER |

 

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