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AP

ALPHA PRO TECH LTD (APT)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 net sales increased 2.4% year over year to $16.7 million; Building Supply segment delivered a quarterly record for core products (+13.2% YoY), while Disposable Protective Apparel declined (-12.0% YoY). Gross margin compressed to 36.8% due to higher rebates, ocean freight, and tariffs; diluted EPS was $0.12 vs. $0.15 a year ago .
  • Management expects further growth in Building Supply in H2 2025 and initiated selling price increases starting July 2025 to partially offset new U.S. tariffs (no formal numerical guidance provided) .
  • Balance sheet remains strong with $14.5 million cash, working capital of $47.5 million, and no debt; active buybacks continued in Q2 (181,100 shares, $0.8 million) with $2.7 million authorization available as of quarter-end .
  • Stock reaction catalysts: record core building products performance despite weak housing starts (-9% YoY), tariff mitigation via pricing actions, and normalization of face mask channel inventories beginning late Q2 .

What Went Well and What Went Wrong

What Went Well

  • Quarterly record in core building products: “sales of our core building products (housewrap and synthetic roof underlayment) were a quarterly record, up 13.2% from the second quarter of 2024” (CEO) .
  • Strong distribution partnerships and new channels: “distribution partnerships… are strong… we are pleased to bring on a few select, strategic regional players this past quarter” .
  • Early signs of demand normalization in masks: “Demand from this channel partner started to improve at the end of the second quarter, which will potentially continue through the rest of 2025” .

What Went Wrong

  • Gross margin compression: 36.8% vs. 42.0% last year, pressured by higher sales rebates, ocean freight, and U.S. tariffs; management expects tariffs will negatively affect gross profit despite price increases from July 2025 .
  • Disposable Protective Apparel weakness: -12.0% YoY to $5.6 million, with disposable protective garments (-11.3%) and face masks (-28.3%) offset partly by face shields (+4.9%) .
  • EPS and net income down: diluted EPS $0.12 vs. $0.15; net income fell 24.3% YoY to $1.2 million as operating income and other income eased relative to prior year .

Financial Results

Consolidated P&L and EPS vs. Prior Periods

MetricQ4 2024Q1 2025Q2 2025
Net Sales ($)$13,817,000 $13,822,000 $16,672,000
Gross Profit ($)$5,190,000 $5,392,000 $6,131,000
Gross Margin (%)37.6% 39.0% 36.8%
Operating Expenses ($)$4,516,000 $4,937,000 $4,796,000
Income from Operations ($)$674,000 $455,000 $1,335,000
Net Income ($)$847,000 $613,000 $1,244,000
Diluted EPS ($)$0.08 $0.06 $0.12
EBITDA ($)$813,000*$698,000*$1,575,000*

Values with asterisk retrieved from S&P Global.

Segment Sales

SegmentQ4 2024Q1 2025Q2 2025
Building Supply ($)$9,000,000 $8,372,000 $11,100,000
Disposable Protective Apparel ($)$4,800,000 $5,450,000 $5,600,000

KPIs and Balance Sheet

KPIQ4 2024Q1 2025Q2 2025
Cash and Cash Equivalents ($)$18,636,000 $13,352,000 $14,464,000
Working Capital ($)$47,500,000 $47,000,000 $47,500,000
Current Ratio (x)16:1 21:1 17:1
Share Repurchases (Period)2024: 831,000 shares, $4.5M 221,413 shares, $1.2M 181,100 shares, $0.8M
Authorization Available ($)$2.7M (Dec-2024) $1.6M (Mar-31-2025) $2.7M (Jun-30-2025)

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Building Supply segment outlookH2 2025Not providedManagement “expects further growth in the Building Supply segment in the second half of 2025” Raised (qualitative)
Pricing actions (tariff mitigation)Starting July 2025Not provided“Management will be increasing selling prices starting in July 2025 to partially mitigate the impact of the new 2025 US tariffs” New action
Revenue, margins, OpEx, tax rateFY/Q2No prior numeric guidanceNo formal numeric guidance providedMaintained (no formal guidance)
Share repurchase authorizationMid-2025~$0.7M remaining (pre-expansion)+$2.0M expansion (total ~$2.7M available) Raised

Earnings Call Themes & Trends

Note: No Q2 2025 earnings call transcript found; themes tracked via press releases.

TopicPrevious Mentions (Q4 2024 and Q1 2025)Current Period (Q2 2025)Trend
Housing starts / macro2024 housing starts down 4.4%; cautious outlook Single-family housing starts down 9.0% YoY; APT outperformed with record core building products Mixed: macro weaker, APT outperforming
Synthetic roof underlaymentDown earlier but Q4 helped by hurricane rebuild; expected growth in 2025 Up 10.6% YoY; part of quarterly record in core building products Improving
HousewrapQ4: decline due to distributor issues; Q1: -20.9% YoY (private-label headwinds) Up 17.0% YoY in Q2 Rebound
Ocean freight ratesVolatile in 2024; expected to negatively affect 2025 Contributing to margin pressure in Q2 Ongoing headwind
TariffsExpected 2025 margin pressure; relative cost advantage vs. China; potential India tariffs risk New U.S. tariffs negatively affecting margins; price increases enacted Headwind; mitigation underway
Masks / channel inventoryQ1: weak due to late-2024 over-purchasing Below expectations; demand from partner improving late Q2 Normalizing
Distribution/channel strategyNew agreements and elevated status (international) Strong partnerships; new regional players added Strengthening
Share repurchaseActive program; $2.7M available at 12/31/24 Authorization expanded by $2.0M (total ~$2.7M mid-2025) Increased capacity

Management Commentary

  • “Despite continued weakness in the housing market… we significantly outperformed the market as sales of our core building products… were a quarterly record, up 13.2% from the second quarter of 2024” – Lloyd Hoffman, CEO .
  • “Management expects further growth in the Building Supply segment in the second half of 2025… however… uncertainty in housing starts, volatility… and a stronger than normal hurricane season in the latter part of 2024 could affect this segment” .
  • “Gross profit margin has been negatively affected… by higher sales rebates, ocean freight rates and… US tariffs. Management will be increasing selling prices starting in July 2025 to partially mitigate… tariffs” .
  • “Demand from [the face mask] channel partner started to improve at the end of the second quarter, which will potentially continue through the rest of 2025” .
  • “As of June 30, 2025, we had $2.7 million available for additional stock purchases… During the three months ended June 30, 2025, we repurchased 181,100 shares at a cost of $0.8 million” – Colleen McDonald, CFO .

Q&A Highlights

No Q2 2025 earnings call transcript was found for APT; therefore, no Q&A content is available. Searches were conducted for “earnings-call-transcript” documents for APT in Q2 2025 and prior quarters; none were available [List: earnings-call-transcript 2025-08 to 2025-09; 2025-04 to 2025-06].

Estimates Context

  • S&P Global consensus coverage for APT appears limited; no published quarterly consensus for EPS or revenue was available for Q4 2024, Q1 2025, or Q2 2025. The data retrieved contained actuals only for revenue and EBITDA (shown below). Values marked with an asterisk were retrieved from S&P Global.
MetricQ4 2024Q1 2025Q2 2025
Revenue Consensus MeanNo published consensus*No published consensus*No published consensus*
Primary EPS Consensus MeanNo published consensus*No published consensus*No published consensus*
EBITDA (Actual)$813,000*$698,000*$1,575,000*

Values with asterisk retrieved from S&P Global.

Implication: With limited formal Street coverage, estimate beats/misses cannot be assessed; near-term revisions (if any) will likely hinge on margin trajectory (tariff pass-through, freight normalization) and sustained building products momentum.

Key Takeaways for Investors

  • Building Supply strength is the quarter’s anchor: core products delivered a record, driving total sales growth despite macro housing weakness; monitor sustainability of housewrap rebound and underlayment momentum into H2 .
  • Margin headwinds are real but partially mitigated: rebates, freight, and tariffs weighed on Q2 gross margin; price increases began in July to offset tariffs—watch gross margin recovery in Q3/Q4 .
  • Disposable Protective Apparel is mixed: garments down on a tough comp; masks below expectations but channel inventories improving—face shields an incremental positive; expect gradual normalization through 2025 .
  • Capital returns remain active: $0.8M repurchased in Q2 with $2.7M authorization available; cash-rich, no debt—supports downside protection and EPS accretion .
  • Operating leverage potential: Q2 operating income improved sequentially; if pricing actions stick and freight/tariffs stabilize, EBITDA uplift could accelerate with Building Supply volume .
  • Limited Street coverage reduces headline risk but increases price sensitivity to company disclosures; near-term trading likely driven by margin prints and any qualitative updates on tariffs/freight during H2 .
  • Watch macro/hurricane season dynamics and channel trends: housing starts remain a swing factor; severe weather can create episodic demand; mask demand normalization at the channel partner is a potential tailwind .
Note on sources: All figures and commentary are drawn from APT’s Q2 2025 8-K and press releases, Q1 2025 press release, and Q4 2024 8-K. Where S&P Global data was used, values are marked with an asterisk and accompanied by the disclaimer above.